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