ABC Releases the 2018 Annual Results

(Hong Kong, March 29, 2019) Agricultural Bank of China Limited (“ABC” or “the Bank”; Stock code SH: 601288; HK: 1288) released its 2018 annual report.

  The report shows that ABC realized a net profit of RMB202.63 billion, representing a year-on-year increase of 4.9%. Basic earnings per share was RMB0.59. Facing complex and ever-changing financial market conditions, ABC prioritized steady development, deeply implemented its “Six Dimension Strategy” and dedicated to improving its market competitiveness, value creation, and risk control. Our business size maintained stable expansion with improved asset quality. At the same time, we have managed to achieve steady and fairly rapid profit growth. The Bank has thus realized steady improvements in scale, quality and performance.

  Making steady progress in business and achieving stable growth in financial indicators

  By the end of 2018, ABC had total assets of RMB22.61 trillion, an increase of RMB1.56 trillion (7.4%) year on year. Assets and liabilities maintained steady growth. Loan balance amounted to RMB11.94 trillion, increasing by RMB1.22 trillion (11.4%) compared to the prior year. Deposit balance reached RMB17.35 trillion, an increase of RMB1.15 trillion (7.1%) compared to the prior year. As ABC deeply implemented the “Balance Sheet Clean-Up Plan”, both the balance and ratio of non-performing loans decreased throughout the year. The NPL balance was RMB190 billion, down by RMB4.03 billion year on year and NPL ratio 1.59%, down by 0.22 percentage points year on year. The provision coverage ratio was 252.18%, an increase of 43.81 percentage points year on year, representing higher risk mitigation ability. The Bank successfully raised RMB 100 billion in a private placement, issued RMB 40 billion of Tier-2 capital bonds, boosting its capital adequacy ratio to 15.12%. The cost-to-income ratio was 31.27%, decreasing by 1.69 percentage points year on year.

  Further promoting poverty alleviation through financial services, and launching  “Seven Major Actions” for rural revitalization

  ABC focused on three major areas of poverty alleviation -- targeted poverty alleviation, poverty alleviation in extremely poor areas and poverty alleviation in specific regions, proactively explored the poverty alleviation models through “micro credit”, “distinctive local businesses”, “Internet finance”, and “government credit enhancement”, and expanded financial service coverage according to local realities. By the end of 2018, the loan balance for 832 key counties of national poverty alleviation program was RMB923.9 billion, an increase of RMB108.8 billion (13.3%) year on year. Committed to serving Sannong and strengthening our service in county areas, the Bank comprehensively launched the “Seven Major Actions” for rural revitalization on national food security, rural industry integrated development, reform of rural property rights system, poverty alleviation, promotion of beautiful and livable rural areas, county-level happiness industries, and green development of Sannong and counties, as a means to promote agricultural transformation and upgrades, the development of a beautiful countryside and the increase of farmers’ income. By the end of 2018, the loan balance for county urbanization, tourism and green development increased by RMB100.2 billion, RMB14.7 billion and RMB80.3 billion respectively.

  Deepening supply-side structural reform, and promoting real economy upgrading

  Upholding the ultimate objective of serving the real economy, ABC further enhanced credit origination and structural adjustments, to provide financial services for the real economy with higher quality and efficiency. Dedicated to serving national strategies and key domains of the real economy, the Bank allocated strategic credit resources to the “Belt and Road” projects, free trade zones and other regions of national strategic significance such as the Beijing-Tianjin-Hebei cluster, the Yangtze Economic Belt and the Guangdong-Hong Kong-Macau Greater Bay Area. The increase of new loans was RMB431.8 billion throughout the year. The Bank actively provided services to new economy and new economic drivers. The loans specifically for growth industries, such as strategic emerging industries and modern service industries, grew RMB247 billion with an increase of 53.9%. The Bank actively promoted green development and focused on the areas of clean energy and rail transport industries, endeavoring to be a “Leading Bank in Green Investment Banking Business”. By the end of 2018, the balance of green loans exceeded RMB 1 trillion for the first time. The Bank also underwrote RMB60 billion worth of bonds for clients from green industries.

  Strengthening inclusive finance by taking multi-pronged measures to support private, small and micro enterprises

  While restructuring the “Sannong Business Section”, we have established a dedicated Inclusive Finance Department. Together, they serve as the two engines of ABC’s unique inclusive finance service system, further advancing the development of private, small and micro enterprises. ABC issued the Opinion on Increasing Support for the Healthy Development of Private Enterprises, which put forward 22 targets under 8 aspects. Under this Opinion, ABC became the sole underwriter for the first bond financing instrument for private enterprises and launched new products such as online financing and supply chain financing tools. We have taken great efforts to provide private enterprises with accessible and low-cost financing. ABC established new financing channels for small and micro enterprises through continued business and product innovation. By employing financial technologies and innovating online financing products, we launched a purely online and collateral-free credit product for small and micro enterprises -- “Instant Micro Loan”, which allows “instant application”, “instant examination” and “instant loan extension”. By the end of 2018, more than 20 thousand customers were on the loan book of “Instant Micro Loan”, with a total outstanding balance over RMB10 billion. ABC also innovated and promoted the supply chain finance model via “Data-based Internet Loans”, providing online financing services for the upstream and downstream small and micro customers of the core enterprises. By the end of 2018, the Bank has launched more than 130 credit products designed for small and micro enterprises.

  Advocating FinTech innovation, with new breakthroughs made in the “Three Major Projects”

  ABC pressed ahead with its “Three Major Projects” -- namely providing internet-based financial services for Sannong, transforming retail business and branch outlets, and improving intermediary business. We fully integrated traditional financial services with new ideas, new technologies and new models to shape new competitive edge. “Providing internet-based financial services for Sannong” has become ABC’s “No.1 Project”. We launched the “Huinong e-Access” platform which allows our farming customers to “use ABC APP, scan ABC QR code and get ABC loan”. By the end of 2018, the balance of “Huinong e-Loan” was RMB101.84 billion, “Huinong e-Payment” covered 7.16 million rural households, and “Huinong e-Commerce” onboarded more than 2.67 million online merchants. ABC has also continued to expedite the transformation of retail business and branch outlets. Key projects such as the new generation of smart mobile banking and individual customer profiling have been implemented, making ABC’s retail business more digital and intelligent. The rapid revenue growth of our intermediary business bears witness to our operational transformation breakthroughs. 

  In the new year, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, ABC will put the guiding principles of the 19th CPC National Congress fully into effect, implement the strategic decisions of the CPC Central Committee and the State Council. ABC will follow the working principle of seeking progress while maintaining stability, strive to deepen the reform of the system and mechanism, and enhance the internal driving forces for development. ABC will continuously improve its corporate governance, strengthen diversified capital replenishment mechanisms and enhance sustainable development capabilities. ABC will promote digital transformation in an all-round way, forge new competitive edge in digitization and strive for greater progress in the journey of building a world-class commercial banking group.