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Bank of Jining Co., Ltd.

Notes to the Financial Statements for the Year 2017

(The following currency units are all in RMB unless they are stated)

ONE Basic situation of the company

Bank of Jining Co., Ltd. (hereinafter referred to as “the Bank”) was approved on Jan. 18, 2006 by the China Banking Regulatory Commission of Shandong Supervision Bureau, Yinjian Luzhun (2006) No.22, and was formed on the basis of the original Jining City Credit Cooperative. It was formally established on August 26, 2006. On Nov. 26, 2009, approved by China Banking Regulatory Commission Yin Jian Fu (2009) No. 463, “Approval of the renaming of Jining City Commercial Bank by China Banking Regulatory Commission”. The name of Bank was changed from Jining City Commercial Bank Co., Ltd. to Jining Bank Co., Ltd.

The Bank was approved by the Shandong Provincial Supervision Bureau of the China Banking Regulatory Commission to hold a financial license coded as B0175H237080001, and it was approved by the Economic and Trade Administration of Industry and Commerce to hold the business license of the corporate legal person with a unified social credit code of 91370800723876735L. The registered capital is RMB 1,226,870,305. The registered address is No. 6, Jinyu Road, Jining City.

As of Dec. 31, 2017, the Bank had a total of 76 branches. The Bank''''s main business includes: RMB business: absorbing public deposits; issuing short-term, medium-term and long-term loans; handling settlement; handling bill acceptance and discounting; agency issuance, agency redemption; buying and selling government bonds, financial bonds; engaging in inter-bank lending; Certificate services and guarantees; agency receipt and payment and agency insurance business; entrusted deposit and loan business; foreign exchange business; foreign exchange deposits, foreign exchange loans, foreign exchange remittance, foreign currency exchange, international settlement, inter-bank foreign exchange lending, foreign currency bill acceptance and discount, foreign exchange loans , foreign exchange guarantee, self-operated foreign exchange trading or valet foreign exchange trading; other business approved by the banking regulatory authority.

TWO The basis for the formulation of financial statements

I The basis of formulation

The financial statements of the Bank are prepared on the following important accounting policies and accounting estimates, based on continuing operations and based on the actual transactions and events, in accordance with the “Accounting Standards for Business Enterprises – Basic Standards” promulgated by the Ministry of Finance, the interpretation of the specific accounting standards and the subsequent guidance for the application of the accounting standards for enterprises and other relevant provisions (hereinafter referred to as “Enterprise Accounting Standards”).

II Continuing operations

The Bank has the ability to continue operating for at least 12 months from the end of the reporting period and has no significant events affecting its ability to continue operating.

THREE. Important accounting policies and accounting estimates

(I) Statement of compliance with the Accounting Standards for Business Enterprises

The financial statements, prepared by our Bank, are in compliance with the requirements of the “Accounting Standards for Business Enterprises” and truly and completely reflect the financial status of our Bank on Dec. 31, 2017, the operating results and cash flows and other relevant information in 2017.

(II) Accounting period

The fiscal year of the Bank is the Gregorian calendar year, that is, from Jan. 1 to Dec. 31 of each year.

(III) Bookkeeping base currency

The Bank uses RMB as the bookkeeping base currency.

(IV) Determination criteria for cash and cash equivalents

The cash determined by the Bank in preparing the cash flow statement refers to the Bank''''s cash on hand and the non-restricted deposits that can be used for payment at the central bank and the deposits with banks and other financial institutions with a maturity date of no more than three months.

The cash equivalents determined by the Bank in the preparation of the cash flow statement refer to the short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, including the withdrawal of funds and purchases. Repurchase sales, etc.

(V) Translation of foreign currency business and foreign currency statements

1. Foreign currency business translation

The Bank''''s foreign currency transactions are accounted for using the spot exchange rate on the transaction date.

On the balance sheet date, the Bank converts foreign currency monetary items using the spot exchange rate on the balance sheet date. The resulting exchange differences are included in the current profit and loss., except: ① it can be dealt with the principle of the exchange difference arising from the purchase and construction of foreign currency-specific borrowings related to assets eligible for capitalization ,which based on the principle of capitalization of borrowing costs.; ② other general imcome of the balance of exchange differences arising from changes in book balances other than amortized cost of available-for-sale foreign currency monetary items that are included in other comprehensive income, and other foreign currency monetary items available for sale, except for amortized cost.

Foreign currency non-monetary items, measured at historical cost, are still translated at the spot exchange rate on the transaction date, and the amount of the recording currency is not changed. Foreign currency non-monetary items, which are measured at fair value, are translated at the spot exchange rate on the date when the fair value is determined. The difference between the translated bookkeeping currency amount and the original bookkeeping base currency amount is treated as a change in fair value (including exchange rate changes). , is included in the current profit and loss or recognized as other comprehensive income.

2. Translation of financial statements in foreign currencies

The Bank''''s foreign currency financial statements will be accounted for after accounting.

The assets and liabilities in the foreign currency balance sheet are translated at the spot exchange rate on the balance sheet date. Except for the “undistributed profit” item, the other items are converted at the spot exchange rate at the time of occurrence. Income and expense items in the foreign currency income statement are translated at the spot exchange rate on the transaction date. The translation difference of the foreign currency financial statements generated by the conversion is shown below in the other comprehensive income of the owner''''s equity item in the balance sheet.

Foreign currency cash flows are determined according to a systematic and reasonable method and are translated at the spot exchange rate on the transaction date. The impact of exchange rate changes on cash is presented separately in the cash flow statement.

(VI) Financial instruments

Financial instruments refer to the contracts that form the financial assets of a company and form financial liabilities or equity instruments of other units. The Bank''''s financial instruments include financial assets, financial liabilities and equity instruments.

1. Classification of financial instruments

The financial assets of the Bank are classified into the following four categories at the time of initial recognition: financial assets measured at fair value through profit or loss, including transactional financial assets and financial assets designated at fair value through profit or loss. Assets; held-to-maturity investments; receivables; available-for-sale financial assets.

The financial liabilities of the Bank are classified into the following two categories at the time of initial recognition: financial liabilities measured at fair value through profit or loss, including transaction financial liabilities and financial assets designated at fair value through profit or loss, held-to-maturity investments; receivables; other financial liabilities.

2. Confirmation basis and measurement method of financial assets

① Financial assets measured at fair value through profit or loss

The financial assets that are measured at fair value through profit or loss, including financial assets and financial assets designated at fair value through profit or loss. The Bank classifies financial assets that meet one of the following conditions into transactional financial assets: (1) the purpose of obtaining the financial assets is mainly for the purpose of selling in the near future; (2) the identifiable financial instruments for centralized management when initially recognized Part of the portfolio, with objective evidence which the Bank has recently managed the portfolio using short-term profitability; (3) it belongs to derivatives, but derivatives that are designated as effective hedging instruments, and are financial guarantee contracts, and are not quoted in an active market and whose fair value cannot be reliably measured, and must be settled by delivery of the equity instrument except. The financial assets that meet the following conditions are designated as financial assets at fair value through profit or loss: (1) the designation can eliminate or significantly reduce the measurement basis of the financial assets. The inconsistency in the recognition or measurement of the relevant gains or losses caused by the difference; (2) The formal written documents of the Bank''''s risk management or investment strategy have stated that the financial assets portfolio or combination of financial assets and financial liabilities in which the financial assets are located management, evaluation and reporting to key management personnel on the basis of fair value; (3) “Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments”it allows for the designation of financial assets measured at fair value through profit or loss. A hybrid tool associated with embedded derivatives.

For the financial assets measured at fair value through profit or loss, the Bank obtains the fair value (after deducting cash dividends that have been declared but not yet paid or bond interest that has not yet been paid but not yet received) as the initial confirmation amount. The related transaction costs are included in the current profit and loss. Subsequent measurement using fair value, gains or losses arising from changes in fair value are included in profit or loss from changes in fair value; interest or cash dividends received during the period in which assets are held are recognised as investment income; The difference between the initial recorded amount and the initial recorded amount is recognized as investment income, and the gains and losses from changes in fair value are adjusted.

②held to maturity investment

The Bank''''s held-to-maturity investments are non-derivative financial assets with fixed maturities, fixed or determinable payments, and the Bank expresses intention and ability to hold to maturity. At the time of acquisition, the sum of the fair value (deducting the bond interest that has expired but not yet received) and the related transaction expenses is taken as the initial confirmation amount. During the holding period, the interest income is calculated based on the amortized cost and the actual interest rate (if the difference between the actual interest rate and the coupon rate is small, according to the coupon rate), and is included in the investment income. The effective interest rate is determined at the time of acquisition and remains unchanged during the expected duration or for a shorter period of time applicable. At the time of disposal, the Bank shall calculate the difference between the purchase price and the book value of the investment into the investment income

③receivables investment

Receivables investment refers to non-derivative financial assets held by the bank that are not quoted in an active market and have a fixed or determinable recovery amount. For such financial assets, the Bank adopts the effective interest rate method for subsequent measurement and presents it at amortized cost on the balance sheet date.

④ available-for-sale financial assets

The Bank''''s available-for-sale financial assets include: non-derivative financial assets that are designated as available for sale on initial recognition, and financial assets, loans and receivables that are measured at fair value through profit or loss. Financial assets other than maturity investments. The Bank''''s available-for-sale financial assets are subsequently measured using fair value. Gain or loss arising from changes in fair value, except for impairment losses and foreign currency monetary assets, are recognised in profit or loss. The consolidated income is transferred out when the financial asset is derecognised and recognised in profit or loss. The interest calculated by the effective interest method during the period in which the available-for-sale financial assets are held and the cash dividends declared by the investee are included in the investment income. At the time of disposal, the difference between the amount actually received and the book value minus the accumulated amount of fair value changes directly included in other comprehensive income, is recognized as investment income. The Bank''''s investment in equity instruments that are not quoted in an active market and whose fair value cannot be reliably measured, and derivative financial assets (or derivative financial liabilities) that are linked to the equity instrument and that are settled through the delivery of the equity instrument are measured at cost.

 3. Recognition basis and measurement method of financial liabilities

The financial liabilities of the Bank are classified as financial liabilities at fair value through profit or loss and other financial liabilities.

① Financial liabilities measured at fair value through profit or loss, including transaction financial liabilities and financial liabilities designated at fair value through profit or loss.

A financial liability that satisfies one of the following conditions is classified as a transactional financial liability: (1) the purpose of the financial liability is mainly for the repurchase in the near future; (2) the identifiable financial instrument combination for centralized management at the time of initial recognition part of it, and there is an objective evidence that the Bank has recently managed the portfolio using short-term profitability; (3) it belongs to derivatives, except for derivative instruments designated as valid hedging instruments, derivative instruments belonging to financial guarantee contracts, and derivative instruments linked to equity instruments that are not quoted in the active market and whose fair value cannot be reliably measured, and which must be settled through delivery of such equity instruments.

If the partial transfer of financial assets meets the conditions for derecognition, the book value of the transferred financial assets is apportioned between the derecognised portion and the non-recognised portion at their respective fair values.And the difference between the following two amounts is included in the current profit and loss.

(1)The book value of the derecognition portion;

(2)The consideration for the derecognition portion is the sum of the amount corresponding to the derecognition portion of the cumulative amount of changes in fair value that is directly recognised in owners'''' equitySituations involving the transfer of financial assets as available-for-sale financial assets).

If the transfer of financial assets does not meet the conditions for derecognition, the Bank continues to recognize the financial assets and the consideration received is recognized as a financial liability.

5.     Conditions for termination of financial liabilities

If all or part of the current obligations of financial liabilities have been discharged, the Bank will terminate the recognition of the financial liabilities or part of them; if the Bank signs an agreement with the creditors, it will replace the existing financial liabilities with new financial liabilities, and the new financial liabilities and existing financial liabilities If the contractual terms of the liabilities are substantially different, the existing financial liabilities are derecognised and the new financial liabilities are recognized.

If substantial changes are made to all or part of the contractual terms of existing financial liabilities, the Bank derecognises the existing financial liabilities or a part thereof, and recognizes the financial liabilities after the modification of the terms as a new financial liability.

When the financial liabilities are derecognised in whole or in part, the difference between the carrying amount of the financial liabilities derecognised and the payment consideration (including the transferred non-cash assets or the new financial liabilities) is recognised in profit or loss.

If the Bank repurchases part of the financial liabilities, the book value of the financial liabilities as a whole is allocated on the repurchase date based on the relative fair value of the continuing recognition portion and the derecognition portion. The difference between the book value assigned to the derecognised portion and the consideration paid (including the transferred non-cash assets or the new financial liabilities assumed) is recognised in profit or loss for the current period.

6. Method for determining the fair value of financial assets and financial liabilities

In the presence of financial instruments in an active market, the Bank determines its fair value by quoted prices in an active market. In the absence of financial instruments in an active market, the Bank uses valuation techniques to determine its fair value. At the time of valuation, the Bank adopts valuation techniques that are applicable under current circumstances and that are sufficient to support the use of data and other information, and are selected to be consistent with the characteristics of assets or liabilities considered by market participants in transactions in related assets or liabilities. Enter the value and prioritize the relevant observable input value. Unobservable inputs are used only if the relevant observable inputs are not available or are not practicable.

7. Test method and accounting treatment method for impairment of financial assets (excluding receivables)

On the balance sheet date, the Bank performs impairment test on the carrying amount of financial assets other than financial assets measured at fair value through profit or loss. When the objective evidence indicates that the financial assets are impaired, the financial assets should be Impairment test to make provision for impairment based on the test results.

Objective evidence of impairment of financial assets, including the following observable items:

1 The issuer or the debtor has serious financial difficulties;

2 The debtor violates the terms of the contract, such as default or overdue payment of interest or principal;

3 The Bank makes concessions to debtors with financial difficulties due to economic or legal considerations;

4 The debtor is likely to close down or carry out other financial restructuring;

5 Due to major financial difficulties of the issuer, the financial assets cannot continue to trade in the active market;

6 It is impossible to identify whether the cash flow of an asset in a group of financial assets has been reduced, but after an overall evaluation based on the public data, it is found that the estimated future cash flow of the group of financial assets since the initial confirmation has been reduced and Measurement, such as the debtor’s ability to pay for the group’s financial assets is gradually deteriorating, or the unemployment rate in the country or region where the debtor is located increases, the price of the collateral in the region where it is located is significantly reduced, and the industry in which it is located is sluggish;

7 The material, unfavorable changes in the technical, market, economic or legal environment in which the equity instrument is operated by the issuer may make it impossible for the equity instrument investor to recover the investment cost;

8 The fair value of the investment in equity instruments has experienced a serious or non-temporary decline;

9 Other objective evidence that the financial assets are impaired.

The Bank conducts impairment test on financial assets with significant single amount; financial assets that are not individually significant are individually tested for impairment or included in a combination of financial assets with similar credit risk characteristics. Financial assets that are not impaired (including financial assets that are individually significant and insignificant) are tested separately, including impairment testing in a portfolio of financial assets with similar credit risk characteristics. Financial assets that have been individually recognized for impairment losses are not included in the financial asset portfolio with similar credit risk characteristics for impairment testing.

When the Bank''''s held-to-maturity investments are impaired, their carrying amount is reduced to the present value of the estimated future cash flows determined by discounting the original effective interest rate of the financial assets, and the write-down amount is recognized as impairment loss. Current profit and loss. After the impairment loss is recognized in the financial assets measured at amortized cost, if there is objective evidence that the value of the financial asset has recovered and is objectively related to the events occurring after the recognition of the loss, the previously recognized impairment loss is reversed. However, the book value after the financial assets are transferred back to the impairment loss does not exceed the amortized cost of the financial assets on the reversal date, assuming no provision for impairment.

When the Bank''''s available-for-sale financial assets are impaired, the accumulated losses arising from the decline in fair value that are directly recognised in other comprehensive income are transferred out and recognised in profit or loss for the period. The cumulative loss transferred is the initial acquisition cost of the asset. The balance after deducting the recovered principal and amortized amount, the current fair value and the impairment loss previously recognised in profit or loss. After confirming the impairment loss of available-for-sale financial assets, if there is objective evidence after the period that the value of the financial assets has recovered, and objectively related to the events occurring after the recognition of the losses, the previously recognized impairment losses are reversed. The impairment loss of the investment in the equity instrument is recognised in other comprehensive income. The impairment loss of the available-for-sale debt instruments is transferred back to profit or loss.

The Bank''''s book value is derived from the cost instrumentation of an equity instrument investment that is not quoted in an active market and whose fair value cannot be reliably measured, or when the derivative financial assets linked to the equity instrument are required to be settled through the delivery of the equity instrument. The write-down to the current value determined by discounting the future cash flows of the financial assets at the time of the similar financial assets is recognised as an impairment loss, which is recognised in profit or loss. The impairment loss of the financial asset is not reversed.

For equity instrument investments, the Bank determines the specific quantitative criteria for the “serious” or “non-temporary” decline in fair value, the method for calculating the cost, the method for determining the fair value at the end of the period, and the basis for determining the period of continuous decline:

Specific quantitative criteria for “serious” declines in fair value The fair value at the end of the period has fallen by more than 50% relative to cost.

The specific quantitative criteria for the “non-temporary” decline in fair value have fallen for 12 consecutive months.

The method of calculating the cost is based on the payment consideration (deducting the cash dividends that have been declared but not yet paid or the bond interest that has not yet been paid but not yet received) and the related transaction costs as the investment cost.

Method for determining fair value at the end of the period Financial instruments in an active market have their fair value determined by quoted prices in an active market; if there is no financial instrument in an active market, valuation techniques are used to determine their fair value.

The basis for determining the period of continuous decline is continuous decline or rebound during the period of the downtrend is less than 20%, and the rebound duration is less than 6 months.

(7) Buying resale and selling repurchase financial assets

The purchase of resale financial assets refers to the funds from the financial assets that the Bank first buys and then resells at a fixed price as agreed in the resale agreement. Selling repurchased financial assets refers to the funds that the Bank has sold in accordance with the repurchase agreement and then purchased at a fixed price.

Buying resale and selling repurchase financial assets are accounted for as actually received or received at the time of business and are reflected in the balance sheet. The purchased target assets purchased for resale will not be confirmed, and the off-balance sheet will be checked for registration, and the underlying assets sold for repurchase will still be reflected in the balance sheet.

Transaction gains and losses on the purchase of resale and resale transactions are amortized using the effective interest method during the relevant transaction period and are recognised as interest income and interest expense, respectively.

(8) Debt assets

When the debtor of the Bank compensates for loans and advances and interest receivables, the debt-receiving assets are recorded at fair value, and the relevant expenses paid for the debt-receiving assets are included in the book value of the debt-receiving assets. When there is any indication that the net realizable value of the debt-receiving assets is lower than the book value, the Bank reduces the book value to the net realizable value, and deducts the impairment provision, which is included in the current profit and loss.

The amount actually received in the disposal of the foreclosed assets, net of the difference between the expenses incurred in the disposal and the carrying amount, is recognised in profit or loss for the current period, and the provision for impairment is carried forward.

(IX) Long-term equity investment

The long-term equity investment referred to in this section refers to the long-term equity investment that the Bank has control, joint control or significant influence on the invested entity. The Bank''''s long-term equity investments that do not have control, joint control or significant influence over the investee are considered as available-for-sale financial assets.

1. Initial investment cost determination

(1) For the long-term equity investment obtained by the Bank''''s merger, if it is a business combination under the same control, it shall be recognized as the initial cost according to the share of the book value of the owner''''s equity of the merged party; if it is a business combination not under the same control, It should be recognized as the initial cost based on the combination cost determined on the purchase date;

(2) For other equity investments other than the long-term equity investment formed by the merger, the initial investment cost is the actual purchase price; the initial investment cost is the long-term equity investment obtained by issuing equity securities. The fair value of the issuance of equity securities; the initial investment cost of long-term equity investment obtained through debt restructuring shall be determined in accordance with the relevant provisions of the Accounting Standards for Business Enterprises No. 12 - Debt Restructuring; the exchange of non-monetary assets, initial investment cost Determined according to the relevant provisions of the guidelines.

2. Subsequent measurement and profit and loss confirmation methods

1 cost method accounting

The long-term equity investment that the Bank can exercise control over the investee should be accounted for using the cost method. For long-term equity investments accounted for using the cost method, the book value is generally the same except for the addition or recovery of investment. For the profit or cash dividend declared to be distributed by the invested company, the Bank calculates the portion that should be distributed and recognizes it as investment income.

2 equity method accounting

The Bank''''s long-term equity investments in associates and joint ventures are accounted for using the equity method. When using the equity method, the initial investment cost of long-term equity investment is greater than the fair value of the identifiable net assets of the investee when investing, and the initial investment cost of long-term equity investment is not adjusted; the initial investment cost is less than the investment should be invested If the unit can recognize the fair value share of the net assets, the difference shall be included in the current profit and loss, and the cost of the long-term equity investment shall be adjusted.

When using the equity method, the Bank recognizes the investment income and other comprehensive income according to the share of net profit or loss and other comprehensive income that should be shared or should be shared, and adjusts the book value of long-term equity investment; The portion of the profit or cash dividend declared by the unit to be deducted shall be reduced, and the book value of the long-term equity investment shall be reduced accordingly; for the other changes in the owner''''s equity other than the net profit or loss, other comprehensive income and profit distribution of the invested entity, the adjustment of the long-term equity investment shall be adjusted. The book value is included in the capital reserve. When confirming the share of the net profit or loss of the investee, the net profit of the investee is adjusted based on the fair value of the investee''''s identifiable assets at the time of investment. If the accounting policies and accounting periods adopted by the investee are inconsistent with the Bank, the financial statements of the investee shall be adjusted in accordance with the Bank''''s accounting policies and accounting periods, and the investment income and other comprehensive income shall be confirmed accordingly.

When the Bank confirms that it should share the net loss incurred by the invested entity, the book value of the long-term equity investment and other long-term equity that substantially constitutes the net investment of the invested entity are reduced to zero. In addition, if the Bank has an obligation to bear additional losses to the investee, the estimated liabilities are recognized according to the estimated obligations and included in the current investment losses. If the investee realizes net profit in the future period, the Bank will resume the confirmation of the revenue share after the income sharing amount makes up for the unconfirmed loss share.

3. Conversion of long-term equity investment accounting methods

1 Fair value measurement to equity method accounting: The Bank''''s original equity investment in the investee (which does not have control, joint control or significant influence) is accounted for according to the financial instrument recognition and measurement criteria, due to additional investment. If the shareholding ratio increases and the joint control or significant influence can be exerted on the investee, the fair value of the original equity investment determined by the Bank in accordance with the financial instrument recognition and measurement criteria shall be added when the transfer to the equity method is accounted for. The fair value of the consideration payable for the acquisition of new investment shall be deemed as the initial investment cost calculated by the equity method.

2 Fair value measurement or equity method accounting transfer cost method accounting: The original equity investment held by the Bank that does not have control, joint control or significant influence on the investee, is accounted for according to the recognition and measurement criteria of financial instruments, or If you hold a long-term equity investment in an associate or joint venture and you are able to exercise control over the investee due to additional investment, etc., the long-term equity investment formed by the merger of the relevant enterprises shall be accounted for.

3 equity method accounting to fair value measurement: the long-term equity investment held by the original investing unit with joint control or significant influence, due to partial disposal and other reasons, the shareholding ratio decreased, and it is no longer possible to implement joint control or significant For the impact, the difference between the fair value and the book value on the date of loss of joint control or significant influence is recognised in profit or loss.

4 Cost method to equity method or fair value measurement: When the Bank loses control over the investee due to the disposal of part of the equity investment, etc., in the preparation of individual financial statements, the remaining equity after disposal can be implemented jointly by the invested entity. In case of controlling or exerting significant influence, the Bank shall be accounted for according to the equity method, and the residual equity shall be deemed to be adjusted by the equity method when it is acquired; the remaining equity after disposal shall not be subject to joint control or significant influence on the investee. The Bank has made an accounting treatment in accordance with the relevant provisions of the “Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments”. The difference between the fair value and the book value on the date of loss of control is included in the current profit and loss. In the preparation of the consolidated financial statements, accounting treatment shall be carried out in accordance with the relevant provisions of the Accounting Standards for Business Enterprises No. 33 - Consolidated Financial Statements.

4. Determine the basis for joint control and significant influence on the invested entity

(1) Determining the basis for joint control of the investee: It means that the activity that has a significant impact on the return of an arrangement must be agreed upon by the parties sharing the control right before making a decision. These include sales and purchases of goods or services, management of financial assets, purchase and disposal of assets, research and development activities, and financing activities.

(2) Determining the basis for significant influence on the investee: When holding more than 20% to 50% of the voting capital of the invested entity, it has a significant impact. Or less than 20%, but one of the following conditions has a significant impact:

1 to be represented on the board of directors of the invested entity or a similar authority;

2 Participate in the policy making process of the invested entity;

3 Send management personnel to the invested unit;

4 The invested company relies on the technical or technical information of the investment company;

5 Important transactions occur between the investee and the investee.

5. Impairment test method and accrual method

On the balance sheet date, the Bank checks whether the long-term equity investment is likely to be impaired. When there is any indication of impairment, an impairment test should be carried out to confirm the recoverable amount, and the recoverable amount is less than the book value. Value preparation, once the impairment loss is accrued, will not be transferred back in the future accounting period.

The recoverable amount is determined by the higher of the fair value of the long-term equity investment and the present value of the estimated future cash flow.

6. Long-term equity investment disposal

When the Bank disposes of the long-term equity investment, the difference between the book value of the investment and the actual purchase price is included in the current profit and loss. For the long-term equity investment accounted for using the equity method, when the investment is disposed, the same amount of assets or liabilities are directly disposed to the investee, and the portion that is originally included in other comprehensive income is accounted for.

TEN FIXED ASSETS

1. Conditions for confirming fixed assets

Fixed assets refer to tangible assets held for the purpose of producing commodities, providing labor services, leasing or operating management, and having a useful life of more than one accounting year. At the same time, confirm the following conditions:

(1) the economic benefits related to the fixed assets are likely to flow into the enterprise;

(2) the cost of the fixed assets can be measured reliably.

2. Classification and depreciation methods of fixed assets

The bank''''s fixed assets are mainly divided into: Buildings, machinery and equipment, electronic equipment, transport equipment, non-operating fixed assets, other assets, etc. The depreciation method adopts the average age method. According to the nature and use of various types of fixed assets, determine the life of fixed assets and the estimated net residual value. At the end of the year, the life of fixed assets, the estimated net residual value and depreciation methods are reviewed, if there are differences with the original estimate, corresponding adjustments are made. In addition to the fixed assets which have been fully depreciated and are still used and the land which is independently priced and recorded, the Bank will depreciate all fixed assets.

Fixed asset class

Estimated useful life

Estimated net salvage rate

Annual depreciation rate

Buildings and structures

20-30 years

0-5%

3.17%-5%

machinary equipment

3-5years

3%-5%

19%-32.33%

Electronic equipment

3-5 years

3%-5%

19%-32.33%

Transport equipment

4-5 years

3%-5%

19%-24.25%

Non operating fixed assets

3-5 years

3%-5%

19%-32.33%

other assets

3-5 years

0-5%

19%-31.67%

3. The method of impairment test of fixed assets and the method of calculating depreciation reserves.

On the balance sheet date, the Bank examines whether there are signs of possible impairment of fixed assets. When there are signs of impairment, the bank should conduct impairment tests to confirm the recoverable amount, make provision for impairment according to the part of the recoverable amount which is lower than book value, and the impairment loss will not be reversed in the future accounting period once it is withdrawn.

Eleven CONSTRUCTION IN PROGRESS

1.       Types of under construction projects

The construction works in our bank are divided into two types: self operated construction and outsourcing construction.

2.       Standards and time points for carrying forward fixed assets in construction projects

The construction of the project is carried forward at the time when the project is completed. The criteria for determining the applicable status should be one of the following:

(1) The physical construction (including installation) of fixed assets has been completed or substantially completed;

(2) It has been put into trial production or trial operation, and the results show that the assets can run normally or produce qualified products stably, or the trial operation results show that the assets can operate or operate normally.

(3) the expenditure on fixed assets of the construction is very small or almost no longer occurs.

(4) The fixed assets purchased and constructed have met the requirements of the design or contract, or basically conform to the requirements of the design or contract.

If the construction project has reached its intended usable state, but the final accounts have not yet been completed, it shall be transferred to the fixed assets according to the estimated value according to the project budget, construction cost or the actual cost of the project, and the depreciation of the fixed assets shall be calculated according to the fixed assets depreciation policy of the bank. After the final accounts are completed, the original tentative value will be adjusted according to actual cost, but the depreciation amount will not be adjusted.

3. The method of impairment testing and the method of impairment provision for in construction projects.

On the balance sheet date, the Bank shall inspect the project under construction for signs of possible impairment, conduct impairment tests to confirm the recoverable amount when there are signs of impairment, make provision for impairment according to the amount less than book value, and the impairment loss shall not be turned back in the subsequent accounting period once it is recorded.

The recoverable amount of the project under construction is determined by the net amount of the fair value of the assets minus the disposal expenses and the present value of the expected future cash flow of the assets.

TWELVE INTANGIBLE ASSETS

Intangible assets refer to the identifiable non monetary assets owned or controlled by the bank.

1, the valuation method of intangible assets

The intangible assets of the bank are initially measured at cost. The intangible assets purchased shall be the actual cost according to the actual payment price and related expenses. The actual cost of intangible assets invested by investors shall be determined according to the value stipulated in the investment contract or agreement, but if the value stipulated in the contract or agreement is unfair, the actual cost shall be determined according to the fair value. The total cost of intangible assets developed by oneself before the intended use is achieved.

The follow-up measurement of intangible assets of our bank is as follows: (1) Limited service life intangible assets are amortized by straight line method, and at the end of the year, the service life of intangible assets and amortization methods are reviewed, and there are differences with the original estimate, corresponding adjustments are made. (2) The intangible assets with uncertain service life are not amortized, but at the end of the year, the service life is checked. When there is conclusive evidence that the service life is limited, the service life is estimated and amortized according to the straight-line method.

Asset class

Amortization years

land use right

40年

Other intangible assets

10年

2. The judgement basis of uncertain service life.

The Bank will not be able to foresee the assets for the company''''s economic benefits of the period of time, or the use of intangible assets with uncertain life as intangible assets of uncertain life.

The judgment basis of uncertain service life is as follows: (1) It comes from contractual rights or other legal rights, but there is no definite term of use as stipulated in the contract or law; (2) It is still impossible to judge the term when intangible assets bring economic benefits to the company by integrating the same industry situation or relevant expert argumentation.

At the end of each year, the service life of intangible assets with uncertain service life is reviewed, mainly in a bottom-up manner, by the relevant departments of the use of intangible assets for basic review, evaluation of the service life of uncertain judgment based on whether there are changes.

3. The method of impairment measurement of intangible assets and the method of calculating impairment reserves

On the balance sheet date, the bank examines whether there are signs of possible impairment of intangible assets. When there are signs of impairment, the bank should conduct impairment tests to confirm the amount recoverable, and make provision for impairment according to the amount recoverable less than the book value. Once the impairment loss is recorded, it will not be reversed in the subsequent accounting period.

The recoverable amount of intangible assets is determined by the net amount of the fair value of the assets minus the disposal expenses and the present value of the expected future cash flow of the assets.

THIRTEEN IMPAIRMENT OF LONG-TERM ASSETS

If there are signs of impairment on the balance sheet date of long-term equity investment, investment real estate, fixed assets, construction projects under construction, intangible assets and other long-term assets measured by the cost model, the bank shall conduct impairment tests. The impairment test results show that if the recoverable amount of the assets is lower than their book value, the impairment provision shall be made according to the difference and the impairment loss shall be included. The recoverable amount is the higher between the fair value of the asset minus the disposal cost and the present value of the expected future cash flow of the asset. Asset impairment reserve is calculated and confirmed on the basis of a single asset. If it is difficult to estimate the recoverable amount of a single asset, the recoverable amount of the asset group is determined according to the asset group to which the asset belongs. Asset group is the smallest asset portfolio that can generate cash inflow independently.

Goodwill is tested at least annually at the end of the year.

The bank tests the impairment of goodwill and apportions the book value of the goodwill formed by the merger of enterprises to the relevant asset groups in a reasonable way from the date of purchase; if it is difficult to apportion to the relevant asset groups, it will apportion it to the relevant asset groups. When the book value of goodwill is apportioned to the relevant asset group or asset group portfolio, it shall be apportioned according to the proportion of the fair value of each asset group or asset group portfolio to the total fair value of the relevant asset group or asset group portfolio. If the fair value is difficult to be measured reliably, it shall be apportioned according to the proportion of the book value of each asset group or asset group portfolio to the total book value of the relevant asset group or asset group portfolio.

In the impairment test of the relevant asset group or asset group portfolio containing goodwill, if there is any evidence of impairment in the asset group or asset group portfolio related to goodwill, the impairment test is conducted on the asset group or asset group portfolio without goodwill, and the recoverable amount is calculated and compared with the relevant book value to confirm the impairment. The corresponding impairment loss. Then the impairment test is carried out on the asset group or asset group portfolio containing goodwill to compare the book value (including the part of the book value of the apportioned goodwill) of the relevant asset group or asset group portfolio with its recoverable amount, such as the recoverable amount of the relevant asset group or asset group portfolio is lower than its book value. Impairment of goodwill.

Once the assets impairment losses have been confirmed, they will not be reversed in the subsequent accounting period.

(FOURTEEN) LONG TERM PREPAID EXPENSES

The long-term prepaid expenses of our bank refer to the expenses which have been paid but have benefited for a period of more than one year (excluding one year). Long term deferred expenses are amortized according to the beneficial period of the cost items. If the long-term cost items to be amortized can not benefit from the subsequent accounting period, then all the amortized value of the items that have not been amortized will be transferred to the current profit and loss.

FIFTEEN STAFF REMUNERATION

Employees''''remuneration is various forms of remuneration and other related expenditures, including short-term remuneration, after-service benefits, dismissal benefits and other long-term benefits.

1. Accounting treatment for short-term remuneration

Short-term salaries include short-term wages, bonuses, allowances, subsidies, employee benefits, housing provident fund, trade union funds and employee education funds, medical insurance premiums, work injury insurance premiums, maternity insurance premiums, short-term paid absenteeism, short-term profit-sharing plan, etc. During the accounting period in which the employees provide services, the bank recognizes the actual short-term pay payable as liabilities, and records the current profit and loss or the related asset costs in accordance with the accrual basis for the beneficiary.

2. Accounting treatment for post retirement benefits.

After-service benefits mainly include basic old-age insurance premium, enterprise annuity and so on. According to the risks and obligations undertaken by the company, they are classified as setting up a deposit plan and setting up a benefit plan.

Setting up a deposit plan: The deposit deposited to a separate entity in exchange for the services provided by the employees during the accounting period on the balance sheet date is recognized as liabilities, and the current profit and loss or the related asset costs are recorded according to the beneficiary.

Establishment of Benefit Plans: Actuarial valuation by independent actuaries on half a year and annual balance sheet date to determine the cost of welfare provision by the Expected Cumulative Benefit Unit Method. The salary costs incurred by the beneficiary scheme set by the Bank include the following components: (1) service costs, including current service costs, past service costs and settlement gains or losses. Among them, the current service cost refers to the increase of the present value of the set beneficiary obligation caused by the service provided by the staff and workers in the current period; the former service cost refers to the increase or decrease of the present value of the set beneficiary obligation related to the service provided by the staff and workers in the previous period caused by the modification of the set beneficiary plan; (2) the interest cost of the set beneficiary obligation; (3) re measurement of changes caused by the setting of beneficial plan liabilities. Unless other accounting standards require or permit the cost of employee benefits to be included in the cost of assets, the Bank will include items (1) and (2) above in the current profit and loss; and items (3) in other comprehensive income and will not be transferred back to profit and loss during subsequent accounting periods.

3. Accounting treatment for dismissal benefits.

Retirement benefits refer to the termination of labor relations with employees before the expiration of the employee''''s labor contract, or the proposal to compensate employees for voluntary reductions. When the bank is unable to unilaterally withdraw the termination benefits provided by the termination of labor relations scheme or reduction proposals, or when it recognizes the costs or expenses associated with the reorganization involving the payment of the termination benefits, the bank recognizes the employees ‘compensation liabilities arising from the termination benefits and credits them to the profits and losses of the current period.

SIXTEEN PROJECTED LIABILITIES

1. The confirmation standard of estimated liabilities

When the obligations relating to external guarantees, discount of commercial acceptance drafts, pending litigation or arbitration, product quality assurance and other contingencies are the current obligations of the Bank, and the performance of the obligations is likely to result in an outflow of economic benefits, while the amount can be measured reliably, the obligation is recognized as an anticipated liability.

2. Measurement method of estimated liabilities

The bank''''s estimated liabilities are initially measured according to the best estimate of the expenditure required to fulfil the relevant current obligations. If there is a continuous range of expenditure required and the likelihood of various outcomes occurring within that range is the same, the best estimate is determined according to the intermediate value within that range; if multiple items are involved, the best estimate is determined according to various possible outcomes. And the correlation probabilities are calculated to determine the best estimate.

The bank reviews the book value of the estimated liabilities on the balance sheet date. There is conclusive evidence that the book value does not truly reflect the current best estimate. The book value should be adjusted according to the current best estimate.

SEVENTEEN CONFIRMATION OF INCOME AND EXPENDITURE

Revenue is recognized on the following benchmarks when the relevant economic benefits are likely to flow into the Bank and the amount can be measured reliably:

1. Interest income and expenditure

The interest income and expenditure of all interest-bearing financial instruments are recognized in the interest income and interest expenditure subjects of the income statement in accordance with the actual interest rates of the financial assets or financial liabilities concerned, except for interest-bearing financial instruments classified as financial assets measured at fair value and whose changes are recorded as gains and losses.

The real interest rate is the rate at which the future cash flow of a financial instrument is discounted to the current book value of the instrument during its expected life. In calculating the real interest rate, the bank estimates future cash flows on the basis of all contractual terms of the financial instrument (but not future credit losses). Calculations include fees, transaction costs, and premiums or discounts paid or charged between contractors that are part of the real interest rate.

The interest income of impaired financial assets shall be recognized as the interest rate calculation according to the discount rate adopted for discounting future cash flows when determining impairment losses.

2. Commission and commission income

Our bank charges fees and commissions by providing all kinds of services to customers. The fee income is mainly divided into two categories:

(1) Fees and commissions received through the provision of services at specific time points or within a certain period.

It mainly includes settlement fee, settlement fee, commission, asset management fee, custody fee and other management consulting fees. Such fees and commission income shall be recognized by accrual basis in the provision of services.

(2) Fee charged by providing transaction services.

Procedure fees and commissions for negotiating and participating in negotiating third-party transactions, such as the acquisition of shares or other bonds, and the sale and sale of business, are recognized at the completion of the relevant transaction. Procedures and commissions related to the performance of trading services are not recognized until the actual agreed standards are met.

EIGHTEEN GOVERNMENT SUBSIDY

1. Types of government subsidies

Government subsidy refers to the monetary assets or non-monetary assets (excluding the capital invested by the government as the owner) obtained by the bank free of charge from the government. It is mainly divided into two types: government subsidy related to assets and government subsidy related to income.

2. Accounting treatment of assets related government subsidies.

Government subsidies related to assets refer to government subsidies obtained by the Bank for the purchase and construction of long-term assets or for the formation of long-term assets in other ways. The bank subsidize the assets related to the government, and deduct the book value of the relevant assets or recognize it as deferred income. If it is recognized as deferred income, it shall be included in the profits and losses of the current period in a reasonable and systematic way within the useful life of the relevant assets (if it is related to the daily activities of the bank, it shall be included in other gains; if it is unrelated to the daily activities of the bank, it shall be included in the non-operating income);

3. Accounting treatment of government subsidies related to income.

Revenue-related government subsidies refer to government subsidies obtained by the Bank in addition to assets-related government subsidies. Government subsidies related to income are recognized as deferred gains if they are used to compensate for costs or losses incurred in the subsequent period of the Bank and are recorded in current profits and losses (those related to the daily activities of the Bank are included in other gains; those unrelated to the daily activities of the Bank are included in the deferred gains during the period when the costs or losses are recognized). Non-operating income) or offsetting related cost expenses or losses; if used to compensate for the relevant cost expenses or losses incurred by the bank, it shall be directly recorded in the profits and losses of the current period (if it is related to the daily activities of the bank, it shall be included in other gains; if it is unrelated to the daily activities of the bank, it shall be included in non-operating income) or offsetting related cost expenses or losses.

4. distinguish between asset related government subsidies and income related government subsidies.

(1) The government documents specify the specific items for which the subsidy is directed, and divide them according to the relative proportion of the amount of expenditure on the assets formed and the amount of expenditure on the expenses incurred in the budget of the specific items. The dividing proportion needs to be reviewed on each balance sheet date and changed if necessary;

(2) The government documents only give general description of the use, without specifying specific items, as a government subsidy related to revenue.

5. Confirmation of government subsidies

Government subsidies, measured according to the amount receivable, are recognized at the end of the period when there is conclusive evidence that they meet the relevant conditions stipulated in the financial support policy and are expected to receive financial support funds.

Except for government subsidies as measured by the amount receivable, the Bank recognizes them when they are actually received.

NINETEEN DEFERRED INCOME TAX ASSETS / DEFERRED INCOME TAX LIABILITIES

Confirmation of deferred income tax assets and deferred income tax liabilities of the Bank:

(1)The Bank recognizes deferred income tax assets for deductible temporary differences, which is limited to the amount of taxable income that is likely to be obtained in the future to offset the deductible temporary differences. For deductible losses and tax credits that can be carried forward in subsequent years, the corresponding deferred income tax assets are recognized to the extent that it is probable that the future taxable income will be used to offset the deductible losses and tax credits. For taxable temporary differences, deferred income tax liabilities are recognized except in exceptional circumstances.

(2)The recognition of deferred income tax assets of the Bank is limited to the amount of taxable income that is likely to be used to offset the deductible temporary difference. On the balance sheet date, if there is conclusive evidence that it is probable that sufficient taxable income will be available in the future to offset the deductible temporary differences, the deferred income tax assets not recognized in previous accounting periods are recognized. If it is probable that sufficient taxable income will not be available to offset the deferred income tax assets in the future, the carrying amount of deferred income tax assets is reduced.

(3) The Bank recognizes the deferred income tax liabilities for taxable temporary differences related to investments in subsidiaries and associates, unless the Bank can control the timing of the temporary differences and the temporary differences are in the foreseeable future May not turn back. The Bank''''s deductible temporary differences related to investments in subsidiaries and associates are likely to be reversed in the foreseeable future and are likely to be used to offset deductible temporary differences in the future. Deferred income tax assets are recognized when taxable income is paid.

(4) The Bank does not recognize the corresponding deferred income tax liabilities for the temporary differences arising from the initial recognition of goodwill. For the temporary difference between the initial recognition of assets or liabilities arising from transactions in non-business combinations that do not affect accounting profits or taxable income (or deductible losses), the corresponding deferred income tax assets and Deferred income tax liabilities. On the balance sheet date, the deferred income tax assets and deferred income tax liabilities of the Bank are measured at the tax rates that are expected to recover the asset or settle the liability.

(Twenty) Lease

1. Operating lease

(1) The lease fee paid by the Bank for the lease of assets shall be apportioned on a straight-line basis over the entire lease term without deduction of the rent-free period and included in the current expenses. The initial direct costs associated with the lease transaction are included in the current expenses.

When the lessor of the asset bears the expenses related to the lease that should be borne by the company, the company deducts the part of the expenses from the total rent. The deducted rental expenses are apportioned during the lease term and included in the current expenses.

(2)The rental fee charged by the Bank for leasing assets is apportioned on a straight-line basis over the entire lease term without deduction of the rent-free period, and is recognized as rental income. The initial direct expenses related to the lease transaction are included in the current expenses; if the amount is large, they are capitalized and included in the current income in the same period as the lease income is recognized throughout the lease period.

When the company assumes the lease-related expenses that should be borne by the lessee, the part of the expenses is deducted from the total rental income, and the deducted rental expenses are allocated during the lease term.

2. Financial leasing

(1) Finance leased assets: On the date of the lease start, the company uses the lower of the fair value of the leased assets and the present value of the minimum lease payments as the book value of the leased assets, and the minimum lease payments as the long-term payables. The book value is used as the unrecognized financing fee.

The company uses the effective interest rate method to amortize the unrecognized financing expenses during the asset lease period and include them in financial expenses. The initial direct costs incurred by the company are included in the value of the leased asset.

(2) Financing leased assets: The Company recognizes the difference between the sum of the unpaid guarantee residual value and its present value as unrealized financing income on the lease start date, and recognizes it as Rental income. The initial direct costs incurred by the company in connection with the lease transaction are included in the initial measurement of the finance lease receivables and reduce the amount of revenue recognized during the lease term.

(Twenty-One) Statutory general reserve

In accordance with the Notice of the Ministry of Finance on Printing and Distributing the Measures for the Administration of Provision for Financial Enterprise Reserves (Finance [2012] No. 20), the Bank made general preparations for assets at risk and loss at the end of the year, which was unified by the head office. Accrual and management. The Bank selected the standard method to quantitatively analyze the risk status of risk assets and determine the potential risk estimates. The general reserve balance shall in principle not be less than 1.5% of the ending balance of the risky assets. The general provisions for the withdrawal are included in the current profit distribution and are shown below the owner''''s equity at the balance sheet date.

    (Twenty-Two) Trusteeship

The Bank undertakes entrusted business, including entrusted loans and entrusted investments. The risks, profits and losses and liabilities of all entrusted businesses are borne by the principal, so the Bank does not include the entrusted assets in the balance sheet.

4. Changes in accounting policies and accounting estimates and error correction instructions.

(1) Changes in accounting policies

There were no changes in accounting policies during the reporting period.

(2) Changes in accounting estimates

According to the Ministry of Finance''''s "Management Measures for the Provision of Financial Enterprise Reserves" (Finance [2012] No. 20), the provisions for the provision of counter-cyclical provisions, while considering the past risk exposure of discounted bills, in the macroeconomic down cycle, risk assets default rate When the amount is relatively high, the provision is made less, and the accumulated provisions are used to cover the loss of assets. The Bank implemented dynamic provisioning and appropriately reduced the proportion of provision for impairment of some assets. The proportions before and after adjustment are as follows:

Asset Classification

Pre-adjustment ratio

Adjusted ratio

Normal

1.25%

1.5%

Concern

3%

3%

Secondary

30%

30%

Suspicious

60%

60%

Discounted bills

0%

1%

Government platform loan

100%

100%

Loss

100%

100%

Receivables investment (trust plan, trust and asset management plan income rights)

1.25%

1%

(3) Explanation of correction of accounting errors

There were no accounting error corrections during the reporting period.

5. Taxes

(1) Main taxes and tax rates:

Tax/Fee Type

Tax/ Fee Basis

Tax/Fee Ratio

VAT

Taxable sales

6% etc.

Urban maintenance and construction tax

Actually paid business tax, value-added tax

5%、7%

Education tax surcharge

Actually paid business tax, value-added tax

3%

Local education tax surcharges

Actually paid business tax, value-added tax

2%

Local water conservancy construction fund

Actually paid business tax, value-added tax

1%

Corporate income tax

Taxable income

25%

2. Tax preferential policies and basis

(1) Corporate income tax benefits

According to the “Regulations on the Provisional Regulations on Enterprise Income Tax” (Ministry of Agriculture Decree No. 50), the interest income from the purchase of government bonds is not included in the taxable income.

According to the "Notice of the Ministry of Finance and the State Administration of Taxation on Certain Preferential Policies for Corporate Income Taxes" (Fiscal tax [2008] No. 1), the income of securities investment funds from the securities market, including the difference between the sale and purchase of stocks and bonds, Equity dividends, dividend income, interest income on bonds and other income are not subject to corporate income tax.

According to the “Notice of the Ministry of Finance and the State Administration of Taxation on Continued Support for Tax Policies Related to Rural Financial Development” (Fiscal tax [2017] No. 44), from January 1, 2017 to December 31, 2019, farmers of financial institutions The interest income of a microfinance is calculated as 90% of the total income when calculating the taxable income.

(2)VAT tax incentives

According to the “Notice of the Ministry of Finance and the State Administration of Taxation on the Exemption of Small and Micro Enterprises from Relevant Government Funds” (Fiscal tax [2014] No. 122), from January 1, 2015 to December 31, 2017, Monthly sales or monthly turnover of no more than RMB30,000 (including RMB30,000), as well as quarterly sales tax or quarterly sales of less than RMB90,000 (including RMB90,000), Education fee surcharge, local education fee surcharge, water conservancy construction fund, and cultural undertaking construction fee. Some of the Bank''''s branches enjoy this preferential policy.

According to the “Notice of the Ministry of Finance and the State Administration of Taxation on Promoting the Pilot Reform of Business Tax to VAT” (Fiscal tax [2016] No. 36), interest income from government bonds and interest income from local government bonds will be available from May 1, 2016. The farmer''''s micro-loan interest income is exempt from VAT.

Pursuant to the provisions of the “Notice of the Ministry of Finance and the State Administration of Taxation on Further Defining the Relevant Policies for the Financial Industry in the Pilot Reform and Expansion of the Pilot Reform” (Fiscal tax [2016] No. 46), the pledge purchase will be resumed from May 1, 2016. The sale of financial products and the holding of policy financial bonds are exempt from VAT.

According to the provisions of the Supplementary Circular of the Ministry of Finance and the State Administration of Taxation on Value-added Tax Policies for Financial Institutions (Fiscal tax [2016] No. 70), from May 1, 2016, interbank deposits, interbank loans, interbank payments Buying and selling financial products for resale, holding financial bonds, and interest income from interbank deposits are exempt from VAT.

(3) Stamp duty tax incentives

According to the “Notice of the State Administration of Taxation on Signing Contracts for the Lease of Stamp Taxes for Financial Institutions and Small and Micro Enterprises” (Fiscal tax [2011] No. 105), from November 1, 2014 to December 31, 2017, financial institutions The loan contract with small and micro enterprises is exempt from stamp duty.

6. Notes on major items in the financial statements

(1) Cash and deposits with the central bank

Items

Ending balance

Opening balance

Cash in stock

254,199,580.80

213,844,117.22

Deposit central bank statutory reserve

5,877,468,420.59

5,644,665,686.89

Deposit central bank excess deposit reserve

1,094,206,340.40

1,108,023,585.84

Total

7,225,874,341.79

6,966,533,389.95

According to the "Notice of the People''''s Bank of China on Further Improving the Assessment of the Deposit Allowance Average Method" (PBOC release) [2016] No. 153), the statutory deposit reserve will be paid according to the average balance from July 15, 2016.

2、Stored in interbank

Items

Project ending balance

Project opening balance

Stored in interbank

576,426,827.67  

    596,239,093.11

Among:Refundable deposits

11,891,635.74      

      1,659,050.37

Total

576,426,827.67   

    596,239,093.11

3、Withdrawal of funds

Items

Project ending balance

Project opening balance

Withdrawal of funds

46,813,800.01

 

4、Buy resale financial assets

Items

Project ending balance

Project opening balance

Buy resale financial assets

796,403,505.75

196,000,000.00

5、Interest receivable

Items

Project ending balance

Project opening balance

Personal loan interest receivable

1,322,616.02

526,758.73

Institutional loan interest receivable

98,556,044.75

18,449,391.72

Advance receivable interest rate

98,499.16

274,058.53

Receivable interest from financial institutions

 

5,132,119.58

Interest on available-for-sale financial assets receivable

87,636,129.18

77,156,752.55

Held-to-maturity investment interest receivable

83,368,705.24

79,063,466.99

Interest receivable from buying and selling financial assets for resale

151,767.39

 

Receivables investment interest

170,879,439.14

141,668,907.79

Credit interest receivable

111,100,562.39

79,315,287.33

Total

553,113,763.27

401,586,743.22

6、Other receivables

Age

Ending balance

Proportion(%)

Opening balance

Proportion(%)

Within 1 year

133,883,901.30

97.71

108,921,528.69

98.92

1-2 years

2,345,643.33

1.71

740,000.00

0.67

2-3 years

740,000.00

0.54

350,000.00

0.32

Over 3 years

54,786.45

0.04

98,907.00

0.09

Total

137,024,331.08

100.00

110,110,435.69

100.00

7、Loans and advances

(1)Loans and advances by individual and business

Items

Ending balance

Opening balance

Personal loans and advances

4,102,700,606.82

2,534,234,736.62

Credit card

 

 

Mortgage

104,425,829.08

155,098,398.32

Others

3,998,274,777.74

2,379,136,338.30

Corporate loans and advances

24,374,846,104.89

23,915,328,759.96

Loans

21,390,948,493.22

20,403,287,368.48

Discount

2,983,897,611.67

3,512,041,391.48

Others

Total loans and advances

28,477,546,711.71

26,449,563,496.58

Less: loan loss preparation

923,410,630.48

839,091,408.07

Among them: single item count

364,865,184.36

364,989,905.84

Combination count

558,545,446.12

474,101,502.23

Less: discount interest adjustment

54,837,634.71

36,677,869.65

Book value of loans and advances

27,499,298,446.52

25,573,794,218.86

    (2)Loans and advances by industry

Industrial Distribution

Ending balance

Proportion(%)

Opening balance

Proportion(%)

Agriculture, animal husbandry, fishery

326,406,600.00

1.15

256,961,700.00

0.97

Extractive industry

2,066,450,800.00

7.26

2,012,338,300.00

7.61

Real estate industry

330,000,000.00

1.16

357,000,000.00

1.35

Construction industry

1,636,916,700.00

5.75

1,780,453,200.00

6.73

Financial insurance industry

444,523,300.00

1.56

294,144,000.00

1.11

Other industries

23,673,249,311.71

83.12

21,748,666,296.58

82.23

Total loans and advances

28,477,546,711.71

100.00

26,449,563,496.58

100.00

Less: loan loss preparation

923,410,630.48

839,091,408.07

Among them: single item count

364,865,184.36

364,989,905.84

Combination count

558,545,446.12

474,101,502.23

Less: discount interest adjustment

54,837,634.71

36,677,869.65

Book value of loans and advances

27,499,298,446.52

25,573,794,218.86

(3)Loan and advances by region

Local distribution

Ending balance

Proportion(%)

Opening balance

Proportion(%)

South China

East China

28,477,546,711.71

100.00

26,449,563,496.58

100.00

Other regions

Total loans and advances

28,477,546,711.71

100.00

26,449,563,496.58

100.00

Less: loan loss preparation

923,410,630.48

839,091,408.07

Among them: single item count

364,865,184.36

364,989,905.84

Combination count

558,545,446.12

474,101,502.23

Less: discount interest adjustment

54,837,634.71

36,677,869.65

Book value of loans and advances

27,499,298,446.52

25,573,794,218.86

(4)Loans and advances are distributed by guarantee

Items

Ending balance

Opening balance

Credit loans

2,393,778,180.53

1,230,948,877.42

Guaranteed loan

15,022,132,105.97

15,425,466,639.35

Collateral loan

11,061,636,425.21

9,793,147,979.81

Of which: mortgage

6,697,568,947.88

5,327,768,588.33

Pledged loan

4,364,067,477.33

4,465,379,391.48

Total loans and advances

28,477,546,711.71

26,449,563,496.58

Less: loan loss preparation

923,410,630.48

839,091,408.07

Among them: single item count

364,865,184.36

364,989,905.84

Combination count

558,545,446.12

474,101,502.23

Less: discount interest adjustment

54,837,634.71

36,677,869.65

Book value of loans and advances

27,499,298,446.52

25,573,794,218.86

(5)Overdue loans

Items

Ending balance

Overdue from 1 day to 90 days (including 90 days)

Overdue 90 days to 360 days (including 360 days)

Overdue 360 days to 3 years (including 3 years)

Overdue for more than 3 years

Total

Credit Loans

35,421,256.64

4,983,236.00

2,584,000.00

42,988,492.64

Guaranteed loan

1,177,324,771.15

159,205,877.30

192,809,532.43

2,615,713.24

1,531,955,894.12

Collateral loan

151,976,011.02

43,347,165.83

15,951,888.40

6,109,913.42

217,384,978.67

Of which: mortgage

151,976,011.02

42,877,165.83

15,951,888.40

6,109,913.42

216,914,978.67

Pledged loan

470,000.00

470,000.00

Total

1,364,722,038.81

207,536,279.13

211,345,420.83

8,725,626.66

1,792,329,365.43

Items

Ending balance

Overdue from 1 day to 90 days (including 90 days)

Overdue 90 days to 360 days (including 360 days)

Overdue 360 days to 3 years (including 3 years)

Overdue for more than 3 years

Total

Credit Loans

9,748,290.81

9,748,290.81

Guaranteed loan

336,037,791.47

314,329,348.55

44,673,554.51

349,513.33

695,390,207.86

Collateral loan

39,750,823.16

55,758,735.13

20,920,435.03

1,632,720.27

118,062,713.59

Of which: mortgage

39,750,823.16

55,758,735.13

20,920,435.03

1,632,720.27

118,062,713.59

Pledged loan

Total

385,536,905.44

370,088,083.68

65,593,989.54

1,982,233.60

823,201,212.26

(6)Loan loss preparation

Items

Ending balance

Opening balance

Single item

Combination

Single item

Combination

Opening Balance

364,989,905.84

474,101,502.23

170,916,641.59

939,942,208.15

Current accrual

-124,721.48

416,940,373.86

194,073,264.25

229,838,132.39

Transfer out in this issue

Write-off of this period

369,245,201.88

752,911,981.43

Turned back in this issue

36,748,771.91

57,233,143.12

Reversal of the original resale loan and advances

36,748,771.91 

Loans and advances are reversed due to rising discounted value

Other resulting reversal

Ending balance

364,865,184.36

558,545,446.12

364,989,905.84

474,101,502.23

8、Available for sale financial assets

Items

Ending balance

Opening balance

Book balance

Impairment preparation

Book value

Book value

Impairment preparation

Book value

Available for sale debt instrument

5,257,889,593.31

 

5,257,889,593.31

5,649,883,739.43

 

5,649,883,739.43

Measured at fair value

3,882,482,613.42

 

3,882,482,613.42

3,672,270,270.00

 

3,672,270,270.00

Measured by cost

1,375,406,979.89

 

1,375,406,979.89

1,977,613,469.43

 

1,977,613,469.43

Available-for-sale equity instruments

71,541,474.40

 

71,541,474.40

71,541,474.40

 

71,541,474.40

Measured at fair value

 

 

 

 

 

 

Measured by cost

71,541,474.40

 

71,541,474.40

71,541,474.40

 

71,541,474.40

Other available for sale

749,689,480.46

 

749,689,480.46

153,263,892.98

 

153,263,892.98

Total

6,079,120,548.17

 

6,079,120,548.17

5,874,689,106.81

 

5,874,689,106.81

Equity instruments available for sale

71,541,474.40

 

71,541,474.40

71,541,474.40

 

71,541,474.40

Measured at fair value

 

 

 

 

 

 

Measured at cost

71,541,474.40

 

71,541,474.40

71,541,474.40

 

71,541,474.40

Others available for sale

749,689,480.46

 

749,689,480.46

153,263,892.98

 

153,263,892.98

合計

6,079,120,548.17

 

6,079,120,548.17

5,874,689,106.81

 

5,874,689,106.81

(2)       important debt instruments available for sale

Types of bonds

Bond program

Face value

Initial investment cost

Maturity date

Initial balance (par value)

Ending balance (par value)

Treasury bonds

11 Interest-bearing bonds 02

100,000,000.00

100,000,000.00

2021/1/20

100,000,000.00

100,000,000.00

Treasury bonds

13 Interest-bearing bonds 20

100,000,000.00

105,987,494.52

2020/10/17

100,000,000.00

100,000,000.00

Treasury bonds

13 Interest-bearing bonds 20

100,000,000.00

104,189,500.00

2020/10/17

 

100,000,000.00

Treasury bonds

13 Interest-bearing bonds 23

 

199,373,200.00

2018/11/7

200,000,000.00

 

Treasury bonds

13 Interest-bearing bonds 23

200,000,000.00

206,227,643.84

2018/11/7

 

200,000,000.00

Treasury bonds

16 Interest-bearing bonds 10

120,000,000.00

121,773,258.48

2026/5/5

120,000,000.00

120,000,000.00

Treasury bonds

16 Interest-bearing bonds 17

140,000,000.00

140,588,302.39

2026/8/4

140,000,000.00

140,000,000.00

Treasury bonds

16 Interest-bearing bonds 23

50,000,000.00

49,635,919.89

2026/11/3

50,000,000.00

50,000,000.00

Policy bank debt

14 CDB 09

240,000,000.00

241,624,000.00

2019/4/8

240,000,000.00

240,000,000.00

Policy bank debt

14 CDB 24

30,000,000.00

32,417,908.52

2019/9/19

30,000,000.00

30,000,000.00

Policy bank debt

14 CDB 25

 

202,000,000.00

2017/10/17

200,000,000.00

 

Policy bank debt

14 In and out 69

200,000,000.00

202,500,000.00

2019/10/21

200,000,000.00

200,000,000.00

Policy bank debt

15 Agricultural development bank 07

200,000,000.00

197,920,000.00

2020/3/12

200,000,000.00

200,000,000.00

Policy bank debt

15 Agricultural development bank 12

50,000,000.00

54,250,800.55

2022/5/4

50,000,000.00

50,000,000.00

Policy bank debt

15 CDB 10

70,000,000.00

76,632,160.27

2025/4/13

70,000,000.00

70,000,000.00

Policy bank debt

15 CDB 18

80,000,000.00

85,692,001.04

2025/9/10

80,000,000.00

80,000,000.00

Policy bank debt

16 CDB 05

160,000,000.00

171,849,692.67

2036/1/25

160,000,000.00

160,000,000.00

Policy bank debt

16 CDB 07

60,000,000.00

60,302,058.69

2023/2/25

60,000,000.00

60,000,000.00

Policy bank debt

16 CDB 08

20,000,000.00

20,147,710.86

2019/3/3

20,000,000.00

20,000,000.00

Policy bank debt

16 CDB 10

390,000,000.00

392,708,765.74

2026/4/5

390,000,000.00

390,000,000.00

Policy bank debt

16 CDB 13

300,000,000.00

295,815,717.80

2026/8/25

300,000,000.00

300,000,000.00

Policy bank debt

16 In and out 03

40,000,000.00

40,555,156.72

2026/2/22

40,000,000.00

40,000,000.00

Policy bank debt

16 In and out 06

150,000,000.00

150,396,106.85

2021/5/30

150,000,000.00

150,000,000.00

Policy bank debt

16 Agricultural development bank 09

20,000,000.00

21,952,348.20

2031/2/26

20,000,000.00

20,000,000.00

Policy bank debt

16 Agricultural development bank 17

100,000,000.00

102,601,080.82

2023/4/22

100,000,000.00

100,000,000.00

Policy bank debt

16 Agricultural development bank 17

200,000,000.00

209,200,000.00

2023/4/22

200,000,000.00

200,000,000.00

Policy bank debt

16 Agricultural development bank 18

480,000,000.00

502,058,764.53

2026/4/22

480,000,000.00

480,000,000.00

Policy bank debt

14 CDB 10

260,000,000.00

288,396,887.27

2021/4/8

 

260,000,000.00

Corporate bonds

16Yanzhou mining groupPPN001B

200,000,000.00

199,800,000.00

2019/11/23

200,000,000.00

200,000,000.00

Corporate bonds

15 uob

50,000,000.00

54,193,807.53

2022/6/12

50,000,000.00

50,000,000.00

合計

4,110,000,000.00

4,630,790,287.18

3,950,000,000.00

4,110,000,000.00

(3)Financial assets available for sale at the end of the term, measured at fair value

Financial assets available for sale are classified

Equity instruments available for sale

Debt instruments available for sale

A combined

Cost of equity instruments / Amortized costs of debt instruments

 

4,158,431,606.14

4,158,431,606.14

The fair value

 

3,882,482,613.42

3,882,482,613.42

The amount of fair value change that accumulates into other comprehensive income

 

-275,948,992.72

-275,948,992.72

The amount of impairment has been calculated

 

 

 

(4)The salable equity instrument held at the end of the term

Invested unit

The ending balance

Impairment loss

At the beginning

Increase in current

The reduced

The end of the semester

At the beginning

Increase in current

The reduced

The end of the semester

Yantai bank

26,827,614.46

 

 

26,827,614.46

 

 

 

 

City alliance

30,000,000.00

 

 

30,000,000.00

 

 

 

 

Tengzhou rural commercial bank

12,635,650.00

 

 

12,635,650.00

 

 

 

 

Zaozhuang bank

2,078,209.94

 

 

2,078,209.94

 

 

 

 

合計

71,541,474.40

 

 

71,541,474.40

 

 

 

 

    MarkOf the financial assets available for sale in late 2017,The total pledged amount is 2,182,800,000.00 yuan.

9、Hold to maturity investment

project

The ending balance

Beginning balance

Treasury bonds

199,183,815.38

 

Policy bank bonds

3,227,475,916.40

3,236,774,614.57

Commercial bank bonds

420,000,000.00

20,000,000.00

Municipal bonds

30,000,000.00

30,000,000.00

Corporate bonds

299,895,455.99

 

合計

4,176,555,187.77

3,286,774,614.57

Mark:In the investment held to maturity at the end of 2017, the total pledge amount was 1,290,000,000.00 yuan.

10、Investment in receivables

project

The ending balance

Beginning balance

Special information

3,355,617,177.78

3,924,382,473.68

Asset management plan

3,000,000,000.00

1,800,000,000.00

The trust plan

5,330,000,000.00

1,670,000,000.00

Beneficial right of the trust

1,126,680,000.00

867,200,000.00

Trade finance

200,000,000.00

596,000,000.00

Capital management plan gain right

 

450,000,000.00

Debt financing plan

300,000,000.00

 

other

30,000,000.00

30,000,000.00

Total amount of investment in receivables

13,342,297,177.78

9,337,582,473.68

Reduction of:Receivables investment impairment provision

67,566,800.00

37,340,000.00

Among them:Single provision

 

 

      Combination of provision

67,566,800.00

37,340,000.00

Net investment in receivables

13,274,730,377.78

9,300,242,473.68

11、Long-term equity investment

Name of invested unit

Accounting methods

Beginning balance

Increase in current

The reduced

The ending balance

Jining rushang village bank co. LTD

Cost method

42,980,000.00

   

42,980,000.00

Reduction ofLong-term equity investment impairment provision

         

Book value of long-term equity investment

 

42,980,000.00

   

42,980,000.00

 12Fixed assets

(1)fixed assets

project

Buildings and buildings

Machines and equipment

Electronic equipment

Transportation equipment

Non-operating fixed assets

Other assets

A combined

一、The original value of the book:

1. Beginning balance

420,373,161.83

24,297,721.37

201,168,056.09

7,667,163.00

2,889,192.80

2,492,341.44

658,887,636.53

2. Current increase

15,403,779.76

1,232,476.49

23,817,590.91

325,086.32

212,165.03

40,991,098.51

(1)purchase

1,232,476.49

23,817,590.91

325,086.32

212,165.03

25,587,318.75

(2)Transfer of construction in process

15,403,779.76

15,403,779.76

(3)Business combination increases

(4)other

3. Current reduction

473,264.00

473,264.00

(1)Disposing or scrapping

473,264.00

473,264.00

(2)other

4. The ending balance

435,776,941.59

25,530,197.86

224,985,647.00

7,518,985.32

2,889,192.80

2,704,506.47

699,405,471.04

二、Accumulated depreciation

1. Beginning balance

58,194,174.15

13,960,896.58

117,679,840.15

5,233,519.84

865,967.78

989,237.82

196,923,636.32

2. Current increase

18,650,220.20

3,571,997.69

45,366,260.52

1,223,980.15

548,946.70

483,761.32

69,845,166.58

(1)depreciation

18,650,220.20

3,571,997.69

45,366,260.52

1,223,980.15

548,946.70

483,761.32

69,845,166.58

(2)other

 

3. Current reduction

449,600.80

449,600.80

(1)Disposing or scrapping

449,600.80

449,600.80

(2)other

 

4. The ending balance

76,844,394.35

17,532,894.27

163,046,100.67

6,007,899.19

1,414,914.48

1,472,999.14

266,319,202.10

三、Impairment loss

1. Beginning balance

2. Current increase

(1)provision

(2)other

3. Current reduction

(1)Disposing or scrapping

(2)other

4. ending balance

四、The book value

1. Closing book value

358,932,547.24

7,997,303.59

61,939,546.33

1,511,086.13

1,474,278.32

1,231,507.33

433,086,268.94

2. Beginning book value

362,178,987.68

10,336,824.79

83,488,215.94

2,433,643.16

2,023,225.02

1,503,103.62

461,964,000.21

mark:In order to better reflect the classification of fixed assets of the bank, this year the classification of fixed assets is changed from the original buildings, microcomputers, transport equipment and other electronic equipment to buildings, machinery and equipment, electronic equipment, transport equipment, non-operational fixed assets and other equipment.

(2) Fixed assets leased through operating leases

project

Rent out the original value of the fixed assets

Buildings and buildings

32,581,317.17

13、Projects under construction

project

The final number

Ending balance

Book balance

Impairment loss

The book value

Book balance

Impairment loss

The book value

Jinxiang office building

7,583,069.95

7,583,069.95

1,349,853.51

1,349,853.51

Weishan office building

22,596,000.55

22,596,000.55

14,317,442.40

14,317,442.40

Liangshan office building

16,545,371.22

16,545,371.22

5,583,068.92

5,583,068.92

Zaozhuang office building

986,849.63

986,849.63

Yanzhou office building

1,282,439.59

1,282,439.59

998,377.62

998,377.62

Zibo office building

64,883,188.00

64,883,188.00

Heze office building

46,483,281.00

46,483,281.00

Fish platform office building

164,078.08

164,078.08

A combined

159,537,428.39

159,537,428.39

23,235,592.08

23,235,592.08

14、Intangible assets

project

The ending balance

Beginning balance

Book balance

Impairment loss

The book value

Book balance

Impairment loss

The book value

Land use right

107,661,558.91

107,661,558.91

128,997,632.62

128,997,632.62

Computer software

74,930.00

74,930.00

92,777.37

92,777.37

Confucian business card trademark right

11,787.50

11,787.50

17,937.50

17,937.50

合計

107,748,276.41

107,748,276.41

129,108,347.49

129,108,347.49

15Deferred income tax assets

project

Beginning balance

Increase in current

The reduced

The ending balance

Asset impairment provision

380,920,122.39

74,534,268.30

138,980,639.24

316,473,751.45

Wage incentive fund

9,941,177.00

8,995,594.87

18,936,771.87

Discount interest adjustment

9,169,467.41

4,539,941.27

13,709,408.68

Changes in the fair value of financial assets available for sale

15,297,450.11

53,689,798.07

68,987,248.18

A combined

415,328,216.91

141,759,602.51

138,980,639.24

418,107,180.18

16、Other assets

project

The ending balance

Beginning balance

Advance payment

   19,524,540.15

16,767,014.05

Input tax to be certified

     3,212,053.91

The amount of input tax to be deducted

        587,248.55

A combined

   23,323,842.61

16,767,014.05

17、Borrowing from the central bank

project

The ending balance

Beginning balance

Rediscount par value

143,770,000.00

157,000,000.00

 Reduction of: Rediscount interest adjustment

916,533.75

463,187.50

Further credits

1,450,000,000.00

400,000,000.00

A combined

1,592,853,466.25

556,536,812.50

18、Deposit from correspondent banks

project

The ending balance

Beginning balance

Deposit from correspondent banks

6,478,666.09

80,466,728.18

19、Bank deposits and other financial institutions

project

The ending balance

Beginning balance

Interbank deposit

4,901,850,425.41

3,474,280,096.51

20、Funds borrowed from

project

The ending balance

Beginning balance

Borrow money from other Banks

104,547,200.00

 

21、Sell and buy back financial assets

project

The ending balance

Beginning balance

Net selling of repo notes

 

443,383,194.12

Sell repo

2,409,832,000.00

4,741,500,000.00

Net selling and repurchase of inter-bank certificates of deposit

A combined

2,409,832,000.00

5,184,883,194.12

22、deposits

project

The ending balance

Beginning balance

Demand deposits

10,647,603,809.46

8,857,397,122.81

    Among themThe company

10,425,515,789.69

8,571,890,262.73

Time deposits (including notice deposits, structured deposits)

29,661,978,287.36

25,690,269,747.52

    Among themThe company

4,734,280,259.52

3,653,799,381.18

Other deposits (including margin deposits, remittance outward, remittance payable, etc.)

5,361,446,927.41

4,526,007,691.47

A combined

45,671,029,024.23

39,073,674,561.80

23、Pay payable

(1)List salaries payable to employees

project

Beginning balance

Increase in current

Paid in current period

The ending balance

Short-term compensation

49,084,515.96

96,369,001.62

58,567,990.22

86,885,527.36

Benefits after separation - set up an escrow plan

3,261,273.81

19,506,290.79

17,994,691.82

4,772,872.78

A combined

52,345,789.77

115,875,292.41

76,562,682.04

91,658,400.14

(2)Short term compensation

project

Beginning balance

Increase in current

Paid in current period

The ending balance

Wages, bonuses, allowances and subsidies

39,764,708.01

61,850,814.15

25,868,434.70

75,747,087.46

Social insurance

2,218,920.58

26,933,381.17

28,660,048.88

492,252.87

Among them:Medical insurance

329,401.88

7,289,890.39

7,441,480.34

177,811.93

      Industrial injury insurance

74,098.95

208,587.16

213,387.86

69,298.25

      Maternity insurance

64,551.27

538,115.92

552,227.32

50,439.87

Housing fund

1,750,868.48

18,896,787.70

20,452,953.36

194,702.82

Union funds and staff education funds

7,100,887.37

7,584,806.30

4,039,506.64

10,646,187.03

A combined

49,084,515.96

96,369,001.62

58,567,990.22

86,885,527.36

(3)Set up an escrow plan to list

project

Beginning balance

Increase in current

Paid in current period

The ending balance

Basic endowment insurance

3,220,145.24

18,701,939.37

17,169,334.53

4,752,750.08

Unemployment insurance premium

41,128.57

804,351.42

825,357.29

20,122.70

A combined

3,261,273.81

19,506,290.79

17,994,691.82

4,772,872.78

24、Tax payable

project

The ending balance

Beginning balance

The VAT

24,856,314.94

20,804,546.30

Business tax and additional

3,019,716.74

2,563,992.31

Income tax

-2,635,496.14

47,350,250.07

Land use tax

237,637.83

270,106.72

The property tax

793,847.17

847,924.61

Stamp duty

355,659.27

299,533.87

Withholding interest income tax on personal savings

3.24

0.93

A combined

26,627,683.05

72,136,354.81

25、Interest payable

project

The ending balance

Beginning balance

Interest payable

1,095,506,778.80

915,634,308.52

26、Other payables

aging

The ending balance

The proportion(%)

Beginning balance

The proportion(%)

Within 1 year

199,700,920.51

97.39

146,696,682.95

97.52

1-2 years

2,243,567.33

1.09

2,084,900.96

1.38

2 to 3 years

1,657,654.36

0.81

1,652,834.76

1.10

More than 3 years

1,456,709.33

0.71

 

 

A combined

205,058,851.53

100.00

150,434,418.67

100.00

27、Deferred tax liabilities

project

Beginning balance

Increase in current

The reduced

The ending balance

Depreciation of fixed assets under RMB 5000

258,047.45

 

122,743.23

135,304.22

28、Other liabilities

project

The ending balance

Beginning balance

Pending output tax

4,642,993.01

Dividends payable

8,548,798.74

8,690,876.71

Pending settlement of financial funds

66,840.00

3,710.90

Deferred revenue

390,745.96

Net value of agency business

15,475.14

 

A combined

13,664,852.85

8,694,587.61

29、Paid-in capital or equity capital

(1)Equity structure

project

Beginning balance

Increase in current

The ending balance

Common stock dividends are carried in

Owner input

National equity capital

210,470,400.00

16,837,632.00

227,308,032.00

Legal capital

894,736,944.20

71,578,956.00

966,315,900.20

Share capital of natural person

30,783,679.00

2,462,694.00

33,246,373.00

A combined

1,135,991,023.20

90,879,282.00

1,226,870,305.20

(1)the top 10 shareholders by the end of 2017

serial number

Shareholder''''s name

Nature of equity

The amount of ownership

stake %

1

Jining city finance bureau

For the country

227,308,032

18.53

2

Qilu bank co. LTD

Legal person share

225,887,357

18.41

3

Huang huaihai investment holding group co. LTD

Legal person share

47,734,687

3.89

4

Shandong keqi trading co. LTD

Legal person share

37,469,794

3.05

5

Shandong huayue investment co. LTD

Legal person share

36,741,600

2.99

6

Shandong Intel light communication development co. LTD

Legal person share

31,833,467

2.59

7

Hengnuo industrial co. LTD

Legal person share

31,239,779

2.55

8

Shandong lanxiang vocational training college

Legal person share

30,231,968

2.46

9

Jining shen detai and private capital management co. LTD

Legal person share

26,708,694

2.18

10

Jining century tang folk capital management co. LTD

Legal person share

22,844,457

1.86

A combined

717,999,835

58.52

30. Capital stock

project

Initial balance

Increase in the current period

Reduction in the current period

Final balance

Capital premium

884,106,973.90

 

 

884,106,973.90

Other capital reserve

488,736.19

 

 

488,736.19

Total

884,595,710.09

 

 

884,595,710.09

31. Other comprehensive income

project

Initial balance

Amount incurred in the current period

Final balance

Pre tax income

Less: pre - incorporation of other comprehensive income into profits and losses during the current period

Less: income tax expense

After taxes belong to the parent company.

After tax is attributable to minority shareholders.

1. Other comprehensive income that cannot be reclassified into profit or loss hereafter.

 

 

 

 

 

 

 

Among them: recalculate the change of net liabilities and net assets in the benefit plan.

 

 

 

 

 

 

 

The share enjoyed under the equity method in the other comprehensive income that cannot be reclassified into profits and losses by the invested unit.

 

 

 

 

 

 

 

Two. the other comprehensive income will be reclassified into profit and loss later.

-45,892,350.33

-214,759,192.28

 

53,689,798.07

 

 

-206,961,744.54

Among them: under the equity method, the share of the other comprehensive gains that the invested unit will reclassify into gains and losses

 

 

 

 

 

 

 

Profit and loss of fair value of available financial assets

-45,892,350.33

-214,759,192.28

 

53,689,798.07

 

 

-206,961,744.54

Holdings to maturity investments reclassified as profit and loss of available for sale financial assets

 

 

 

 

 

 

 

Effective part of cash flow hedging profit and loss

 

 

 

 

 

 

 

Conversion balance of foreign currency financial statements

 

 

 

 

 

 

 

Total other combined income

-45,892,350.33

-214,759,192.28

 

53,689,798.07

 

 

-206,961,744.54

32. surplus public accumulation

project

Initial balance

Increase in the current period

Reduction in the current period

Final balance

statutory surplus reserve

287,376,367.53

49,895,999.49

337,272,367.02

Discretionary surplus reserve

384,192,706.49

86,498,110.77

470,690,817.26

Total

671,569,074.02

136,394,110.26

807,963,184.28

33. General risk preparation

Project

Final balance

Initial balance

balance

Impairment%

balance

impairment%

General risk preparation

982,352,018.89

1.85

831,527,312.89

1.84

 34. Net interest income

Project

Current accrual

Last accrual

Interest income

 due from banks

7,814,753.92

47,476,759.80

due from central banks

94,973,695.24

82,751,944.80

Lendings to Banks

647,936.20

61,472.23

Rediscount interest income

33,132,672.20

42,450,254.46

Loans and advances

1,733,592,024.69

1,523,313,347.74

Personal loans and advances

281,819,988.26

230,646,701.54

Corporate loans and advances

1,260,536,964.19

1,148,988,655.13

Bill discounting

191,235,072.24

143,677,991.07

Buying back the sale of financial assets

4,194,593.10

8,807,648.67

Interest income subtotal

1,874,355,675.35

1,704,861,427.70

Interest expenditure

Interbank storage

146,984,483.70

90,949,792.60

Borrowing from the Central Bank

31,733,350.00

21,502,222.23

Rediscount interest expense

1,641,896.88

6,103,899.36

Loans from other banks

2,892,796.61

2,438,266.38

deposits

729,067,880.74

619,085,397.54

Selling and repurchasing financial assets

142,688,482.46

135,198,391.92

Discount interest expense

78,580,611.57

29,900,180.84

Issuance of bonds

15,916,068.24

Interest expense subtotal

1,149,505,570.20

905,178,150.87

Net interest income

724,850,105.15

799,683,276.83

35.commission and net income

Project

Current accrual

Last accrual

Fee and commission income

 

settlement charges

22,738,992.58

15,703,232.08

Agency fee

1,144,086.71

1,358,309.80

Credit commitment fee and commission

302,039.77

161,692.53

Bank card handling fee

10,767,645.33

37,440,026.00

Consultants and consultancy fees

 

Trusteeship and other entrusted business commissions

32,957,880.64

10,640,633.13

Fee for foreign exchange

745,081.34

841,746.88

other

4,392,509.32

297,118.29

commission income

73,048,235.69

66,442,758.71

commission expenses

 

Handling expenses

35,713,746.07

42,909,820.53

Commission expenditure

 

Bank card handling charges

 

Fees for foreign exchange operations

1,879,287.88

1,474,344.42

Other handling charges

19,979,363.33

4,601,490.97

commission expenses

57,572,397.28

48,985,655.92

commission net income

15,475,838.41

17,457,102.79

36. exchange gains and losses

Project

Current accrual

Last accrual

foreign exchange income

 

 

foreign exchange earnings

70,108.83

99,731.76

Operating arbitrage income

Income from foreign exchange settlement and sales

6,378,117.98

6,921,166.51

Other foreign exchange business income

-144,318.50

2,745,645.48

exchange income subtotal

6,303,908.31

9,766,543.75

foreign exchange loss

 

 

foreign currency exchange losses

24,082.13

Operating arbitrage losses

losses from foreign exchange settlement and sales

195,989.09

Other foreign exchange business losses

2,356,049.18

528,500.00

foreign exchange loss subtotal

2,576,120.40

528,500.00

foreign exchange net income

3,727,787.91

9,238,043.75

37、Income from investment

Project

Current accrual

Last accrual

Investment in debt instruments measured in fair value and whose changes are included in current profits and losses.

160,759,151.61

135,885,873.28

Investment in available debt instruments

95,876,930.97

85,339,688.31

Holding to maturity investment

121,162,022.74

106,515,774.56

Long term equity investment

 

8,354,730.00

Receivables investment

562,469,390.02

459,776,825.03

TOTAL

940,267,495.34

795,872,891.18

38、Tax

Project

Current accrual

Last accrual

Sales Tax

105,130.07

30,247,232.65

construction tax

6,317,238.18

5,403,103.47

Education fee

2,876,486.32

2,471,584.79

Local education fee

1,917,657.56

1,647,723.22

Water conservancy construction fund

671,531.47

823,861.57

Property tax

4,247,010.93

3,321,779.71

stamp TAX

723,466.60

459,173.69

land holding tax;

802,104.30

692,202.62

vehicle and vessel tax

25,170.00

13,560.00

total

17,685,795.43

45,080,221.72

39、Business and management fees

Project

Current accrual

Last accrual

Business promotion fee

13,862,242.34

16,685,124.78

Advertising fee

3,523,702.00

7,725,009.39

Business entertainment expenses

12,128,271.64

12,048,145.81

Operation cost of electronic equipment

42,319,589.80

46,205,223.40

Banknote delivery fee

12,929,364.95

12,762,681.74

Heating and cooling costs

4,503,242.22

4,569,777.83

Security fee

5,423,628.09

5,273,320.33

Postal charges

4,692,864.08

4,868,046.76

Workers'''' wages

261,531,756.56

225,777,667.50

Employee benefits

2,443,561.12

2,229,739.60

staff training expense

4,539,811.83

4,041,256.82

Labor protection fee

2,536,343.39

1,668,128.01

Labour insurance premium

27,529,921.14

21,385,847.16

Housing Provident Fund

18,896,787.70

20,814,740.88

incidental expenses

8,901,273.75

7,962,887.14

Property management fee

3,444,224.69

3,616,362.40

Conference fee

317,872.65

192,421.72

Consulting fee

1,606,232.52

4,662,374.92

Travel expenses

3,614,719.47

2,563,055.90

Water and electricity

8,814,765.54

8,528,195.34

Amortization of low value and consumable goods

1,838,924.24

4,062,202.41

Leasehold

38,621,519.31

33,025,162.53

Repair cost

4,368,729.74

3,908,280.60

depreciation fee of fixed assets

69,296,219.88

64,530,198.36

Various taxes and fees

-

1,174,081.71

Trade union funds

3,044,994.47

2,704,477.66

Printing fee

3,954,345.35

5,430,615.55

Amortization of intangible assets

-52,718.30

3,271,032.40

Amortization of long term prepaid expenses

11,971,333.75

10,537,255.71

Others

13,119,851.28

12,429,165.54

Turn over management fees

-

2,118,847.38

Total

589,723,375.20

554,652,479.90

40、assets impairment loss

Project

Current accrual

Last accrual

Provision for loan losses

416,815,652.38

423,911,396.64

Impairment loss of investment receivables

30,226,800.00

21,341,600.00

Total

447,042,452.38

445,252,996.64

41、Extra operating income and operating expenses

Project

Current accrual

Last accrual

Non operating income

33,799,224.71

8,874,083.40

Include:Disposal of non-liquid asset

33,033.15

193,377.51

Government subsidy gains

31,923,654.00

4,887,116.00

Cashier have more cash than can be accounted for

255.00

900.00

Other non operating income

1,842,282.56

3,792,689.89

Non operating expenses

1,480,819.87

707,528.34

Include:Public welfare expenditure

 

147,868.40

Disposal of construction projects

899,187.00

 

Fines and confiscation of property

210,000.00

 

Tax arrears and fines

54,613.50

 

Long term suspension of household repayments

15,270.78

 

Other non operating expenses

301,748.59

559,659.94

Net operating income and expenditure

32,318,404.84

8,166,555.06

42. Income tax expense

Project

Current accrual

Last accrual

Current income tax expense

193,069,162.15

 145,822,379.94

Deferred Income Tax Expense

-33,449,325.26

-9,942,111.66 

TOTAL

159,619,836.89

135,880,268.28 

    SEVEN. Item notes for cash flow statement

1.Composition of cash and cash equivalents

Project

Current accrual

Last accrual

Cash in stock

 254,199,580.80

213,844,117.22

Storage of excess reserves of central banks

 1,094,206,340.40

1,108,023,585.84

Interbank payment

 348,906,591.93

194,580,042.74

Buying back the sale of financial assets

 796,403,505.75

196,000,000.00

Lendings to Banks

 46,813,800.01

TOTAL

 2,540,529,818.89

1,712,447,745.80

2.Adjusting net profit to cash flow of business activities

Supplementary information

Current accrual

Last accrual

1.Adjusting net profit to cash flow of business activities

 

 

Net profit

498,959,994.86

432,490,553.87

plus:Asset impairment provision

447,042,452.38

445,252,996.64

Depreciation of fixed assets, depletion of oil and gas assets and depreciation of productive biological assets

69,845,166.58

64,530,198.36

Amortization of intangible assets

2,252,251.26

3,271,032.40

Amortization of long term prepaid expenses

50,626,489.61

10,537,255.71

Loss of disposal of fixed assets, intangible assets and other long term assets (income is listed in "-").

3,113,817.51

-193,377.51

Loss of fixed assets abandonment (income is listed as "-")

 

 

Loss of fair value change (income is listed in "-")

 

 

Financial expenses (income is listed in "-" number)

 

 

Investment losses (income is listed in "-" number)

-940,267,495.34

-795,872,891.18

Decrease in deferred income tax assets (increased by "-")

-2,778,963.27

-25,107,806.29

Increase in deferred income tax liabilities (reduced by "-")

-122,743.23

-26,873,644.44

Decrease in loans (increased by "-")

-2,906,696,882.83

-3,979,867,077.61

Increase in deposits (reduced by "-")

7,724,924,791.33

8,438,755,798.64

Decrease in deposit reserve (increased by "-")

-232,802,733.70

-1,110,428,052.67

Decrease in operating receivable items (increased by "-")

41,087,286.71

578,058,645.24

Increase of business payable items (reduced by "-")

-896,778,509.03

625,038,886.10

OTHER

16,366,068.24

587,960.00

Net cash flow from operating activities

3,874,770,991.08

4,660,180,477.26

2. Major investment and financing activities that do not involve cash receipts and payments:

 

 

Debt to capital

 

 

Switching Company bonds due within one year

 

 

Financial leasing of fixed assets

 

 

3. Net changes in cash and cash equivalents:

 

 

Cash at the end of the period

1,697,312,513.13

1,516,447,745.80

Less: initial balance of cash

1,516,447,745.80

1,811,297,728.11

Plus: ending balance of cash equivalents

843,217,305.76

196,000,000.00

Less: initial balance of cash equivalents

196,000,000.00

225,974,400.00

Net increase in cash and cash equivalents

828,082,073.09

-324,824,382.31

Eight. Related parties and related transactions

(1) related parties

1. The subsidiary of our bank.

Name of subsidiary

Place of registration

Business nature

registered capital

Shareholding ratio of the bank

The proportion of voting rights enjoyed by the bank is%.

(10000 yuan)

Jining Confucian Merchants village bank

No. 171, he he road, Jining

Financial and banking industry

19,446.00

32.08

32.08

2. other related party situation

The names and shareholdings of shareholders holding more than 5% of the bank’s shares (including 5%) are as follows:

NAME

Affiliated enterprise

Registered address

Registered capital

Investment ratio (%)

Main business

Relationship with our bank

Nature or type of operation

Legal representative

 

Jining Municipal Finance Bureau

No. 75, wutaizhu East Road, development zone, Shizhong District, Jining, Shandong

18.53

Shareholder

Administrative unit

Gong Zhen Hua

 
 

Qilu bank CO.Ltd

Zhangqiu Qilu village bank CO.LTD

No. 176, Shun he street, Shizhong District, Ji''''nan

412,275

18.41

Business approved by the China Banking Regulatory Commission in accordance with relevant laws, administrative regulations and other provisions shall be operated within the scope of the license.

Shareholder

Limited company

Wang Xiaochun

 

3. Related party transactions

In the course of our daily business, we have normal business transactions with related parties, such as deposit absorption and loan issuance. The Bank''''s transactions with related parties are conducted in accordance with general commercial terms and normal business procedures, and the pricing principle is consistent with the independent third party transactions.

(1) transactions with subsidiaries

(2) A. balance

Project

ending balance

Initial balance

Interbank payment

4,516,168.40

1,552,638.55

Deposits held by other financial institutions

291,529,528.21

240,642,655.92

 B.transaction volume

Project

Current accrual

Previous accrual

Interest income

14,792,781.10

18,407,998.23

Interest expenditure

4,207,992.99

10,023,331.35

    (2) transactions with affiliated parties who do not have control relationship.

A.deposit

NAME

Current accrual

Previous accrual

Jining Municipal Finance Bureau

405,539,591.00

261,326,945.58

B.OTHER

As of December 31, 2017, the Bank has not issued bank acceptance drafts, letters of credit and guarantees for the relevant parties.

Nine. Commitments and contingencies

1. credit commitments

Project

Current contract amount

Initial contract amount

Open letter of credit

754,230,382.08

202,090,903.29

Open letter of guarantee

         161,109,422.43

106,652,931.37

Acceptance bill

    10,523,462,936.53

7,934,529,501.28

Entrust other bank to open a letter of credit on behalf of him

802,055,811.24

165,577,192.72

Total

12,240,858,552.28

8,408,850,528.66

2. contingent item

By the end of 2017, 322 (including small and micro cases) had been identified in the non-performing loans. The amount involved is 776 million yuan.The 169 cases (including small and micro cases) which have been filed without judgment are involved in the total amount of 387 million yuan.It is not expected that litigation risks will be created and there will be no significant impact on business activities.

Ten. risk management

1financial risk analysis

Under the new normal economic situation, this behavior strengthens the ability to resist risks, actively copes with the adverse effects brought about by the downturn of the macro-economy, timely changes in development ideas, scientific decision-making, with the help of the reform of the process bank, establishes a more scientific and reasonable performance appraisal management model, promotes the optimization and adjustment of the business structure of the whole industry, and promotes business products. Innovation, diversification of assets and liabilities, strengthening centralized financial management, optimizing the financial cost budget control process, striving to increase revenue and reduce expenditure, open source and reduce expenditure, to ensure the sustained and stable growth of profitability.In 2017, operating profit of 1.106 billion yuan, an increase of 9.08%, asset profit margin of 0.87%, capital profit margin of 12.35%, cost-income ratio of 34.96%. In order to meet the needs of rapid business development, according to regulatory requirements, on the basis of accumulating supplementary capital through endogenous sources, supplementary secondary capital is timely added, and preparatory work for the issuance of secondary capital bonds is timely started to optimize the capital structure.Actively cope with the impact of economic downturn on the business development of the industry, combined with the practical situation of the industry, timely and full extraction of all preparations, to maintain a strong ability to offset risks. By the end of 2017, the capital balance was 122,687.03 million yuan, the capital adequacy rate was 13.10%, the core level 1 capital adequacy rate was 9.31%; the non-performing loan balance was 51,901 million yuan, the non-performing loan rate was 1.82%, the non-performing loan provision coverage rate was 177.92%, the total loan reserve rate was 5.09%, and the general risk reserve ratio was 1.85%.Strengthen the rational allocation management of the term structure of assets and liabilities, effectively manage the liquidity risk, in the case of ensuring liquidity, as far as possible to maximize revenue.

(2)Credit risk analysis in 2017

The bank''''s credit risk management is led by the Risk Compliance Department and coordinated by the relevant functional departments, forming a credit risk management and control mechanism covering the whole process of risk management based on credit policy, structure process, technical support and system implementation.

First, continue to strengthen the construction of asset risk classification system. In order to implement the fine management of assets quality and improve the level of risk management, the Bank has revised the Classified Management Method of Credit Assets Risk of Jining Bank, formulated and implemented the Detailed Rules for the Implementation of Classification of Non-Credit Assets Risk of Jining Bank (Interim) and the Classified Management Method of Financial Services Risk of Jining Bank (Interim) "In strict accordance with regulatory requirements for asset classification management. The bank implements a five-level classification management on the quality of credit assets, and classifies loans into five categories: normal, concerned, subordinate, suspicious and loss according to the possibility of expected loan principal and interest recovery.

Second, combining macroeconomic policies with the operational characteristics of the industry, we should constantly improve credit policies and promote the optimization and adjustment of the credit structure of the whole bank. For small and medium-sized enterprises which conform to industrial and environmental protection policies, are conducive to expanding employment, have the willingness to repay loans and the ability to repay loans, and have commercial sustainability, the principle of "three priorities" should be adhered to, that is, priority should be given to supporting sequences, priority should be given to examining and approving credit business, priority should be given to arranging loans. Continuously improve the quality of financial services for small and micro enterprises, and promote the steady development of credit business of small and micro enterprises. In accordance with the principle of "classified guidance, support and control", we will increase credit support for strategic emerging industries, energy-saving and environmental protection industries, science and technology innovation enterprises, and modern service industries. We should constantly adjust the credit structure and optimize the allocation of credit resources. 

Three, we should strengthen the disposal of risk loans and establish a long-term mechanism for credit risk management. In order to grasp and predict the trend of loan quality as early as possible, the bank has launched a list-based management of problematic loans, focusing on monitoring and supervising the liquidation of loans. Through active coordination with local governments, we should increase cash collection efforts. Strengthen the verification of non-performing loans. We should actively cancel the bad loans that meet the conditions of cancellation, and defuse the historical burden in time. Establishing and perfecting the working mechanism of non-performing loan clearance and preservation, formulating and implementing the Interim Measures for the Reward of Non-performing Loan Clearance and Dissolution of Jining Bank, revising the Measures for the Recognition of Non-performing Loan Liability and Responsibility Investigation and Management, fully mobilizing the enthusiasm of credit personnel in the work of non-performing loan clearance and dismantling, and stimulating their subjective abilities We must strive to build a long-term mechanism for credit risk management.

Four is to strengthen the management of branches in different places and prevent credit risks in other places. To improve the authorization of branches in different places, the head office standardizes the power of credit granting of each branch, and reports to the head office for examination and approval by the head office loan examination committee if it exceeds the power. Strengthen the risk management team building, recruitment risk management, experienced staff.

(3)Market risk analysis

Market risk refers to the risk that the fair value of the bank''''s financial instruments or future cash flows may suffer losses due to changes in observable market variables such as exchange rates, interest rates and commodity prices. The market risk of the bank mainly comes from its proprietary trading activities.

By establishing and improving the market risk management system with clear division of responsibilities and clear system and process, the bank can control and prevent market risks and improve the level of market risk management. Our bank controls the market risk in an acceptable range by adopting various methods such as quota management, graded approval and so on. On this basis, we seek to maximize the profit after risk adjustment.

In order to take pertinent market risk management measures and accurately measure the market risk supervision capital, according to the nature and characteristics of different accounts, the accounts are divided into trading accounts and bank accounts. Transaction account refers to the positions of financial instruments and commodities that banks hold freely for the purpose of trading or to avoid the risks of other items in the trading account. All kinds of positions other than these are put into bank accounts.

 For the interest rate risk of bank account, the bank establishes a simple risk model through WIND communication system, determines the amount of floating loss of the bank in the future period according to the measured upstream base of income, and makes corresponding adjustments.

In order to effectively control various business risks, the bank has formulated a series of management measures for market operations. Such as: Internal Control System of Capital Management, Approval and Approval of Capital Payment, Internal Control System of Interbank Lending Business, Accounting Operational Procedures for National Interbank Lending Business, Bond Business Operational Procedures, Management Measures for Discount of Bank Accepted Bills of Exchange, Discount of Bank Accepted Bills of Exchange "Operational procedures", "Interim Measures for the comprehensive credit management of domestic financial institutions" and so on.

(4)Interest rate risk analysis

Interest rate risk refers to the possibility that the uncertainty of market interest rate changes brings losses to the bank. In 2017, facing the new challenges of interest rate risk management, our bank will continue to improve the interest rate risk management system from the following aspects, optimize the interest rate risk management mechanism, and improve the level of interest rate risk management.

1. Deposit interest rate risk. The Asset Liability Management Committee (ALMC) is the decision-making body of the bank to adjust the deposit interest rate, which is responsible for making decisions on important matters of interest rate; the ALMC has an office under the ALMC, which is located in the Planning and Finance Department of the head office; each department is the specific executive department of interest rate management; the Risk Compliance Department and the Audit Department are the interest rate management. Supervision department.

With the advancement of interest rate marketization, our bank''''s deposit interest rate pricing is based on the benchmark interest rate of the People''''s Bank of China, strictly in accordance with the market interest rate pricing self-discipline mechanism requirements, according to the interbank deposit interest rate pricing level and combined with the actual situation of our bank, to determine the pricing implementation plan.In the specific pricing process, the factors such as deposit term structure, business structure characteristics, customer contribution, regional differences, the impact of cost on profit and the net return on the use of deposit funds are taken into account. A more scientific, reasonable and flexible deposit pricing model is formed to effectively control the deposit interest rate risk caused by unreasonable pricing.

2. Loan interest rate risk. The loan pricing management system is composed of assets and liabilities management committee, loan interest rate management department, headquarters Department and other departments authorized to examine and approve personnel.

Loan pricing is based on the principle of matching risk and income. The bank''''s loan pricing approval and risk approval are carried out simultaneously.According to the external pricing system (RPM), according to different customer groups, through the loan pricing model to formulate different risk pricing, that is, considering the cost of capital, operating costs, risk costs, capital costs, tax costs of the five major costs, the implementation of differentiated pricing, deposit risk pricing capabilities continue to improve, effective control of loan benefits Rate risk.

3. Note interest rate. Under the premise of controllable risk, the competition of bill business is, in a sense, the competition of interest rates. In order to better follow the market rhythm and accurately set the guiding interest rate, the Ministry of Financial Markets, through various channels, understands and grasps the direct discount prices of local businesses and areas with more active capital market operations, and makes use of the Shibor quotation system and bill network to pay close attention to the trend of capital prices and interest rates, in accordance with the bank''''s own capital situation and competitive situation. Scientific and reasonable guidance prices should be issued to sub branches in time through the intranet.

We should adopt a unified and flexible interest rate policy for different customers. Unification is to execute a level of interest rate for all bank bills of the same amount, type and term in the same time without changing the market interest rate within a certain period of time; flexibility is to adopt different interest rate policies for different markets and customers, but the premise of flexibility is fairness, impartiality and openness. For the paper market in the weaker competitive cities, the interest rate is always higher than the local interest rate; for the paper market in the more competitive prefectures and municipalities, and for the city commercial banks and joint-stock banks in some provincial capitals, the policy of downward movement is adopted; for the customers with frequent discount business and large amount of discount, the interest rate is lower than the local interest rate. Rate. By adopting a flexible market-oriented interest rate policy, on the one hand, the source of tickets has been stabilized, on the other hand, a large profit margin has been guaranteed.

(5)Liquidity risk

The Bank has established a liquidity risk management framework consisting of the board of directors, senior management and the Asset Liability Management Committee. It is responsible for formulating and improving liquidity risk management strategies and building internal control mechanisms to support the implementation and supervision of liquidity risk management strategies. The board of directors is responsible for deliberating and approving the basic policy and management framework of liquidity risk in the whole bank to ensure the consistency of credit risk and liquidity risk management; the senior management is responsible for the organization and implementation of liquidity risk management; the senior management is responsible for the selection of senior managers; and the policy and procedure of liquidity risk management are ensured in the bank. As the leading department of liquidity management, the planning and Finance Department of the head office is responsible for formulating and monitoring the liquidity risk management system of the whole bank, analyzing the liquidity risk situation of the whole bank, and timely putting forward the adjustment plan of the whole bank''''s assets and liabilities structure to ensure that the liquidity risk is controlled within the acceptable scope. At the same time, it is responsible for daily capital position management, timely and reasonable adjustment of capital position, effective use of surplus funds to maximize profits under the condition of ensuring the effective operation of the bank''''s daily business, and coordinates the relevant capital operation departments such as the financial market department, international business department, credit business department, risk management department and settlement operation department. The use and withdrawal of dispatching funds. Adjust the structure of liquidity assets, monitor the ratio of liquidity indicators and gap indicators, monthly monitoring of structural liquidity indicators, close to or exceed the warning value, find out the reasons, and promptly put forward suggestions or suggestions for adjusting the structure of assets and liabilities.

The Ministry of Planning and Finance implements the principles of "daily dispatch, ten-day monitoring, quarterly analysis and dynamic management" for liquidity risks, and unified dispatch, centralized management and graded responsibility for all capital positions. After the central bank examines the statutory reserve by means of the average method, this act maximizes the use of the average method of reserve to examine policy adjustments to improve the efficiency of the use of funds.In the position management, we should further strengthen the monitoring and dispatching management, effectively reduce the excess reserve, realize the effective operation of available funds, and realize the capital income as far as possible.

In view of the macroeconomic situation and changes in financial supervision policies, the Bank has continuously improved the liquidity risk management system and optimized the liquidity management mechanism. In accordance with the revised Measures for Liquidity Risk Management of Commercial Banks (Trial Implementation) of the CBRC (No. 9, 2015) and the actual management of the Bank, the Bank has revised and improved its liquidity-related management system.Specifically including: Jining Bank Liquidity Risk Management Measures, Jining Bank Liquidity Risk Stress Test Program, Jining Bank Liquidity Risk Emergency Plan, Jining Bank Liquidity Risk Liquidity Risk Limit Management and other related liquidity management systems, and formulated the implementation of Jining Bank Liquidity Risk Management. The rules provide further guidance for our liquidity risk management.

(6)Operational risk analysis

Operational risk refers to the risk of direct or indirect losses caused by imperfect or problematic internal operational processes, personnel, systems or external events. The operational risk prevention of our bank is mainly reflected in the following aspects:

 Our bank strictly follows the requirements of the "Guidelines for Operational Risk Management of Commercial Banks" issued by the China Banking Regulatory Commission and carries out specific work under the leadership of the board of directors and senior management. In accordance with the latest regulatory requirements and changing trends of operational risks in the banking sector, the Bank continues to strengthen the fine management of operational risks in key areas and key links, further deepen operational risk management, and promote the improvement of management level.In 2017, CBUS 5.0-Smart Bank successfully completed its operation on-line. Through business process reengineering, the Bank implemented a number of peripheral topics, such as new paperless, centralized authorization, video platform, intelligent counter and mobile exhibition industry, which greatly enhanced the supporting capacity of science and technology operation; standardized the operation process and established dynamic rules and regulations. Sound mechanism, interaction between hardware and software, and prevention of risk control from the source. In addition, through issuing documents, issuing information on foreground business guidance and inspection, risk warning bulletins, etc., the bank can supplement and perfect the rules and regulations in various forms at any time. Through standardizing counter business processes and operations, clear the requirements of counter operations, serious risk prevention and control work. With the continuous growth of the bank''''s network, in order to adapt to the rapid development, the bank through decentralization, adjustment, supervision and other forms, to achieve the branch in the system construction, the implementation of accounting supervision and inspection, counter business training and risk warning education and other aspects of the actual bottom-up management and head office functions of top-down management Interactive mode, the completion of the settlement line management framework to play the backbone of the operation manager to prevent and control risks.

In 2017, our bank established and improved the anti-money laundering work framework and anti-money laundering internal control system, especially in accordance with the requirements of anti-money laundering order 3, actively promote the construction of anti-money laundering system. Our bank follows the principle of "know your customers", strictly implements the customer identification system, and takes effective measures to improve the quality of our bank''''s customer identification work. The implementation of the customer risk classification system lays a foundation for the rational division and adjustment of customer risk levels. For the reporting of suspicious transaction data, we advocate to provide valuable anti-money laundering data clues to the anti-money laundering monitoring center, constantly increase the intensity of manual analysis and identification, and prudently identify the suspicious transaction data extracted by the system to ensure data quality. In 2017, 12 suspected money laundering risk cases were found in the bank, and the effectiveness of money laundering risk prevention is increasingly reflected. In accordance with the principles of safety, accuracy, integrity and confidentiality, the Bank properly preserves customer identity information and transaction records to ensure that each transaction can be reproduced adequately to meet the information needs of identifying customers, monitoring and analyzing transactions, investigating suspicious transactions and investigating and dealing with money laundering cases.

 In terms of anti money laundering business management, First, the Bank actively cooperates with the People''''s Bank of China in the inspection of anti-money laundering business, and earnestly does a good job in the management of anti-money laundering business, the customer investigation and retort of anti-terrorist financing, etc. Second, In accordance with the requirements of Anti-Money Laundering Order No. 3, actively promote the construction of anti-money laundering system, upgrade and transform the existing system, and complete the new version of anti-money laundering system on-line within the prescribed time; Thirdly, Increase training efforts and actively carry out risk warning education. Fourthly. Strengthen communication and business communication with business departments and branches. Fifth, The risk reminders issued by the People''''s Bank of China should be forwarded to the business organizations in time to make the anti-money laundering team more professional and full-staffed, and comprehensively improve the actual business ability of employees. Sixth, actively carry out publicity activities to enhance the public''''s enthusiasm to participate in curbing and combating money laundering crimes, and further popularize anti-money laundering knowledge to the public.

(7) Reputation risk

Reputation risk refers to the risk of negative evaluation of the bank by stakeholders due to its operation, management and other activities or external events. The bank attaches great importance to risk management of public opinion and establishes a sound reputation risk management mechanism. Our bank adopts the management strategy of initiative prevention, formulates and issues "Jining Bank Reputation Risk Management Implementation Rules", clarifies the responsibility of reputation risk management of various departments, as well as the emergency and disposal process of reputation risk incidents. Our bank has established daily monitoring procedures for reputation risks, set up special departments and posts to conduct reputation risk investigation, regularly analyzed the occurrence factors and transmission channels of reputation risks and reputation incidents, and set up special posts to regularly monitor the network, television, radio, newspapers and other media channels, thus achieving a better reputation. Pre-prevention and timely disposal of risks minimize losses and negative impacts on the public and promote the sustained, steady and healthy development of the bank.

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