THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in China Everbright Bank Company Limited, you should at once hand this circular to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular. 中國光大銀行股份有限公司 China Everbright Bank Company Limited (A joint stock company incorporated in the People s Republic of China with limited liability) (Stock code: 6818) 2017 WORK REPORT OF THE BOARD OF DIRECTORS 2017 WORK REPORT OF THE BOARD OF SUPERVISORS BUDGET PLAN OF FIXED ASSET INVESTMENT FOR THE YEAR 2018 AUDITED ACCOUNTS REPORT FOR THE YEAR 2017 PROFIT DISTRIBUTION PLAN FOR THE YEAR 2017 APPRAISAL OF THE AUDIT WORK FOR THE YEAR 2017 PERFORMED BY THE EXTERNAL AUDITOR AND THE RE-APPOINTMENT OF THE EXTERNAL AUDITOR FOR THE YEAR 2018 REMUNERATION OF THE DIRECTORS FOR THE YEAR 2017 REMUNERATION OF THE SUPERVISORS FOR THE YEAR 2017 AND NOTICE OF THE 2017 ANNUAL GENERAL MEETING The letter from the Board is set out on pages 3 to 12 of this circular. Notice convening the AGM to be held at the conference room of 3rd Floor, Tower A, China Everbright Center, No. 25 Taipingqiao Avenue, Xicheng District, Beijing, PRC on Friday, 22 June 2018 at 9:30 a.m., together with the relevant reply slip and proxy form, have been sent to the Shareholders on 7 May If you intend to appoint a proxy to attend the AGM, you are required to complete and return the relevant proxy form in accordance with the instructions printed thereon. For holder of H Shares, the proxy form should be returned to Computershare Hong Kong Investor Services Limited in person or by post not less than 24 hours before the time appointed for holding the AGM (i.e. not later than 9:30 a.m. on Thursday, 21 June 2018) or any adjourned meeting thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the AGM or at any adjourned meeting should you so wish, but in such event the instrument appointing a proxy shall be deemed to be revoked. All times set out in this circular refer to Hong Kong local time. 7 May 2018

2 CONTENTS Page DEFINITIONS LETTER FROM THE BOARD INTRODUCTION WORK REPORT OF THE BOARD OF DIRECTORS WORK REPORT OF THE BOARD OF SUPERVISORS BUDGET PLAN OF FIXED ASSET INVESTMENT FOR THE YEAR AUDITED ACCOUNTS REPORT FOR THE YEAR PROFIT DISTRIBUTION PLAN FOR THE YEAR APPRAISAL OF THE AUDIT WORK FOR THE YEAR 2017 PERFORMED BY THE EXTERNAL AUDITOR AND THE RE-APPOINTMENT OF THE EXTERNAL AUDITOR FOR THE YEAR REMUNERATION OF THE DIRECTORS FOR THE YEAR REMUNERATION OF THE SUPERVISORS FOR THE YEAR THE AGM CLOSURE OF REGISTER OF MEMBERS FOR THE AGM CLOSURE OF REGISTER OF MEMBERS FOR DISTRIBUTION OF 2017 FINAL DIVIDEND RECOMMENDATIONS APPENDIX I 2017 WORK REPORT OF THE BOARD OF DIRECTORS APPENDIX II 2017 WORK REPORT OF THE BOARD OF SUPERVISORS NOTICE OF THE 2017 ANNUAL GENERAL MEETING i -

3 DEFINITIONS In this circular, unless the context otherwise requires, the following expressions have the following meanings: A Share(s) ordinary share(s) with par value of RMB1.00 each in the share capital of the Company, which are listed on the Shanghai Stock Exchange and traded in RMB AGM Board Company CSRC Director(s) former CBRC HK$ Hong Kong PRC Listing Rules RMB Share(s) Shareholder(s) Stock Exchange the annual general meeting for 2017 of the Company to be held at the conference room of 3rd Floor, Tower A, China Everbright Center, No. 25 Taipingqiao Avenue, Xicheng District, Beijing, PRC on Friday, 22 June 2018 at 9:30 a.m. the board of Directors of the Company China Everbright Bank Company Limited ( 中國光大銀行股份有限公司 ), a joint stock limited company incorporated in the PRC and the H Shares and A Shares of which are listed on the Hong Kong Stock Exchange (stock code: 6818) and the Shanghai Stock Exchange (stock code: ), respectively China Securities Regulatory Commission director(s) of the Company former China Banking Regulatory Commission Hong Kong dollars, the lawful currency of Hong Kong the Hong Kong Special Administrative Region of the People s Republic of China the People s Republic of China but excluding, for the purpose of this circular, Hong Kong, the Macao Special Administrative Region and Taiwan the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited Renminbi, the lawful currency of the PRC ordinary share(s) of par value RMB1.00 each in the share capital of the Company (including A Shares and/or H Shares) holder(s) of Share(s) The Stock Exchange of Hong Kong Limited - 1 -

4 DEFINITIONS % per cent

5 LETTER FROM THE BOARD 中國光大銀行股份有限公司 China Everbright Bank Company Limited (A joint stock company incorporated in the People s Republic of China with limited liability) (Stock code: 6818) Executive Directors: Mr. ZHANG Jinliang Ms. LI Jie Non-executive Directors: Mr. LI Xiaopeng Mr. CAI Yunge Mr. ZHANG Shude Mr. LI Huaqiang Mr. FU Dong Mr. ZHAO Wei Independent Non-executive Directors: Mr. QIAO Zhimin Mr. XIE Rong Ms. FOK Oi Ling Catherine Mr. XU Hongcai Mr. FENG Lun Mr. WANG Liguo Registered Office: China Everbright Center No. 25 and 25A Taipingqiao Avenue Xicheng District Beijing , China Principal Place of Business in Hong Kong: 30/F Far East Finance Centre 16 Harcourt Road Admiralty Hong Kong 7 May 2018 To the Shareholders Dear Sir or Madam, 2017 WORK REPORT OF THE BOARD OF DIRECTORS 2017 WORK REPORT OF THE BOARD OF SUPERVISORS BUDGET PLAN OF FIXED ASSET INVESTMENT FOR THE YEAR 2018 AUDITED ACCOUNTS REPORT FOR THE YEAR 2017 PROFIT DISTRIBUTION PLAN FOR THE YEAR 2017 APPRAISAL OF THE AUDIT WORK FOR THE YEAR 2017 PERFORMED BY THE EXTERNAL AUDITOR AND THE RE-APPOINTMENT OF THE EXTERNAL AUDITOR FOR THE YEAR 2018 REMUNERATION OF THE DIRECTORS FOR THE YEAR 2017 REMUNERATION OF THE SUPERVISORS FOR THE YEAR 2017 AND NOTICE OF THE 2017 ANNUAL GENERAL MEETING - 3 -

6 LETTER FROM THE BOARD 1. INTRODUCTION The purpose of this circular is to provide you with information regarding the proposal of matters below, which will be submitted to the AGM for consideration and approval WORK REPORT OF THE BOARD OF DIRECTORS The full text of the 2017 Work Report of the Board is set out in Appendix I to this circular WORK REPORT OF THE BOARD OF SUPERVISORS The full text of the 2017 Work Report of the Board of Supervisors is set out in Appendix II to this circular. 4. BUDGET PLAN OF FIXED ASSET INVESTMENT FOR THE YEAR 2018 Pursuant to relevant national policies and on the basis of the Company s overall strategic objectives, its development plan and the transition requirements for its network under the Four Principles( 四化 ) of being light, intelligent, characteristic and community-oriented, the Company intends to prioritize its limited resources to satisfy its fixed asset investment needs in IT investment, network construction and smart terminal equipment and to properly allocate funds into its general fixed assets investment such as purchasing office buildings and vehicles according to standards after considering the external economic situation, policy environment and market competition landscape, with an aim to facilitate its business development, further enhance its service capabilities and quality as well as strengthening its core competitiveness and customer service quality continuously. The fixed assets investment budget for the year was to be RMB3.435 billion in total, including RMB2.082 billion for construction of office buildings (inclusive of construction of R&D center and cloud computing center), RMB600 million for IT investment, RMB462 million for establishment of business channels and RMB291 million for upgrading equipment in offices. Details are as follows: Item Budget for 2018 (in RMB100 million) Construction of office buildings IT investment 6.00 Establishment of business channels 4.62 Upgrading equipment in offices 2.91 Total AUDITED ACCOUNTS REPORT FOR THE YEAR 2017 During the reporting period, the Company carried out its activities based on the general principle of making progress while maintaining stability and strived to realize the three major missions of serving the real economy, containing financial risks and deepening financial reforms by emphasizing the importance of - 4 -

7 LETTER FROM THE BOARD high-quality development, stabilizing growth, adjusting structure, preventing risks and improving efficiency, through which our prospective management has been enhanced and the overall operational performance has improved and shown prospects for further growth while maintaining stability. Under the guidance of developing by strengthening core competitiveness, the assets and liabilities of the Company improved stably; the structure adjustment proceeded steadily; the proportion of basic loan and deposit business improved; the capability to serve the real economy was strengthened; the revenue structure was constantly optimized; the profit increased continuously; all types of risks were generally controllable; all main operating indicators met the budgeted target of the Board. (1) Assets and Liabilities As at the end of 2017 As at the end of 2016 Unit: RMB100 million Increase Growth rate Assets 40, , % Of which: loans 20, , , % Liabilities 37, , % Of which: general deposits 22, , , % Owners equity 3, , % As at the end of 2017, the total assets of the Company amounted to RMB4, billion, representing an increase of 1.70% or RMB billion as compared to the end of the previous year. The balance of loans reached RMB2, billion, representing an increase of 13.19% or RMB billion as compared with the end of the previous year. As at the end of 2017, the Company s total liabilities reached RMB3, billion, representing an increase of 0.37% or RMB billion as compared with the end of the previous year. General deposits reached RMB2, billion, representing an increase of 7.16% or RMB billion as compared with the end of the previous year. Owners equity of the Company was RMB billion, representing an increase of 21.65% or RMB billion as compared with the end of the previous year. (2) Asset Quality As at the end of 2017 Unit: RMB100 million As at the end of 2016 Change Non-performing loan Non-performing loan ratio 1.59% 1.60% -0.01% Loan impairment provision Provision-to-loan ratio 2.52% 2.43% 0.09% Provision coverage ratio % % 6.16% - 5 -

8 LETTER FROM THE BOARD As at the end of 2017, the Company s non-performing loans amounted to RMB billion, representing an increase of RMB3.690 billion as compared with the end of the previous year. Nonperforming loan ratio was 1.59%, down by 0.01 percentage point as compared with the end of the previous year. As at the end of 2017, the loan impairment provisions of the Company reached RMB billion, representing an increase of RMB7.605 billion as compared to the end of the previous year. The provision-to-loan ratio was 2.52%, up by 0.09 percentage point as compared with the end of the previous year. The provision coverage ratio was %, up by 6.16 percentage points as compared with the end of the previous year. (3) Financial Balance Unit: RMB100 million Growth Increase rate Operating income % Of which: Net interest income % Net fee and commission income % Operating expenses % Of which: Operating fees % Provision expenses % Operating profit % Net profit % In 2017, the operating income of the Company was RMB billion, representing a decrease of RMB2.187 billion or 2.33% as compared to the previous year. The net interest income was RMB billion, representing a decrease of RMB4.338 billion or 6.64% as compared to the previous year. The net fee and commission income was RMB billion, representing an increase of RMB2.662 billion or 9.47% as compared to the previous year. In 2017, the incurred operating expenses of the Company were RMB billion, representing a decrease of RMB2.831 billion or 5.23% as compared to the previous year. The operating fees were RMB billion, representing an increase of RMB2.260 billion or 8.35% as compared to the previous year. The cost-income ratio was 31.92%, representing an increase of 3.1 percentage points as compared with the previous year. The provision charges were RMB billion, representing a decrease of RMB3.361 billion or 14.04% as compared to the previous year. In 2017, the operating profit of the Company was RMB billion, representing an increase of RMB0.644 billion or 1.61% as compared to the previous year. The net profit was RMB billion, representing an increase of RMB1.223 billion or 4.02% as compared to the previous year. The average return on total assets was 0.78%, representing a decrease of 0.07 percentage point as compared to the previous year. The average return on net assets was 12.75%, representing a decrease of 1.05 percentage points as compared with the previous year

9 LETTER FROM THE BOARD (4) Capital adequacy As at the end of 2017 As at the end of 2016 Unit: RMB Change Net assets per share Common equity tier-1 capital adequacy ratio 9.56% 8.21% 1.35% Tier-1 capital adequacy ratio 10.61% 9.34% 1.27% Capital adequacy ratio 13.49% 10.80% 2.69% As at the end of 2017, the net assets per share of the Company reached RMB5.24, representing an increase of RMB0.52 as compared to the previous year. The common equity tier-1 capital adequacy ratio, as measured according to the Administrative Measures for the Capital of Commercial Banks (Trial) ( 商業銀行資本管理辦法 ( 試行 )), reached 9.56%, up by 1.35 percentage points as compared to the previous year; the tier-1 capital adequacy ratio was 10.61%, up by 1.27 percentage points as compared to the previous year; the capital adequacy ratio was 13.49%, up by 2.69 percentage points as compared to the previous year, indicating that our capital strength has improved significantly. 6. PROFIT DISTRIBUTION PLAN FOR THE YEAR 2017 Taking into account the interests of all shareholders, sustainable development of the Company s business and the requirements of regulators on capital adequacy ratio, and pursuant to the provisions of the Companies Law of the PRC, the Securities Law of the PRC and the relevant requirements of the Articles of Association of the Company, the Company hereby formulates its 2017 profit distribution plan as follows: (1) Taking the net profit of the Company of RMB 31,033,438.4 thousand in 2017 as base, a statutory surplus reserve fund of RMB3,103,343.8 thousand was drawn at a rate of 10%. (2) According to the relevant provisions of Regulations on Creation and Management of Provisions by Financial Institutions promulgated by the Ministry of Finance, a general reserve of RMB808,904.7 thousand was withdrawn at 1.5% of risk assets. (3) Distribution of dividends to shareholders of preference shares amounted to RMB1,450 million (RMB1,060 million distributed on 26 June 2017 and RMB390 million distributed on 11 August 2017). (4) A total of RMB9,500,532.0 thousand of cash dividends, accounting for 30.12% of the consolidated net profit attributable to the Company s shareholders was distributed to all shareholders of ordinary shares, with RMB1.81 (before tax) for per 10 shares. The cash dividends were denominated and issued in RMB, paid to shareholders of A Shares in RMB and paid to shareholders of H Shares in HKD. The actual amount paid in HKD shall be calculated based on the average exchange rate of RMB against HKD announced by the PBOC one week prior to the annual shareholders meeting (including the date of the shareholders meeting)

10 LETTER FROM THE BOARD (5) In 2017, the Company did not implement capitalization of capital reserve funds. The retained undistributed profit will be used to replenish the capital to meet the regulatory requirements on capital adequacy. 7. APPRAISAL OF THE AUDIT WORK FOR THE YEAR 2017 PERFORMED BY THE EXTERNAL AUDITOR AND THE RE-APPOINTMENT OF THE EXTERNAL AUDITOR FOR THE YEAR 2018 In 2017, Ernst & Young Hua Ming Certified Public Accountants (special general partnership) and Ernst & Young (hereinafter referred to as Ernst & Young ) were engaged as the Company s external auditors, responsible for conducting audit on financial statements and internal control of the Company. They have completed the agreed-upon procedures for A Shares and H Shares for the first and third quarters of 2017, the interim review of 2017 and the annual audit and internal control audit of In accordance with the relevant requirements of the Measures on Appraising the Services Provided by Accounting Firms Engaged by China Everbright Bank( 中國光大銀行聘任會計師事務所服務的評價辦法 ), the Company has conducted comprehensive quantitative evaluation on the audit work performed by Ernst & Young in 2017 in terms of plans and proposals, implementation of audit work and audit reports of each branch and each relevant business department of the head office based on 14 specific assessment indicators, and concluded that the general satisfactory level for its service was high. Based on the result of the Company s appraisal of the audit work for the year 2017 performed by Ernst & Young and the consideration of the continuity of external audit work, we proposed to re-appoint Ernst & Young Hua Ming Certified Public Accountants (special general partnership) as the domestic auditor of the Company and re-appoint Ernst & Young as the overseas auditor of the Company to be responsible for the audit work for the year 2018 of the Company. The proposed audit fee of 2018 was RMB9 million (inclusive of reimbursement and value-added tax), among which the audit fee of financial statements was RMB8.20 million, and the audit fee of internal control was RMB0.8 million

11 LETTER FROM THE BOARD 8. REMUNERATION OF THE DIRECTORS FOR THE YEAR 2017 In accordance with the relevant requirements of the Articles of Association of the Company and the performance of duties by the Directors, the proposed remuneration of the Directors for the year 2017 are set out below: Name Position Unit: RMB ten thousand Remuneration for 2017 (before tax) Gao Yunlong Vice Chairman, Non-executive Director Zhang Jinliang Executive Director, President Cai Yunge Non-executive Director Ma Teng Executive Director, Vice President Li Jie Executive Director, Vice President Zhang Shude Non-executive Director Li Huaqiang Non-executive Director Zhao Wei Non-executive Director Qiao Zhimin Independent Non-executive Director Xie Rong Independent Non-executive Director Fok Oi Ling Catherine Independent Non-executive Director Xu Hongcai Independent Non-executive Director Feng Lun Independent Non-executive Director Wang Liguo Independent Non-executive Director Resigned Directors: Tang Shuangning Former Chairman, Non-executive Director Wu Gang Former Non-executive Director Zhang Xinze Former Independent Non-executive Director Notes: (1) The Chairman, Vice Chairman and Non-executive Directors do not receive remuneration from the Company. The remuneration of Mr. Zhang Jinliang, Mr. Ma Teng and Ms. Li Jie, Executive Directors, are determined with reference to the remuneration standards of senior management and are subject to the approval from the Board. (2) Mr. Zhang Xinze ceased to act as an Independent Non-executive Director of the Company on 10 January (3) Mr. Wu Gang resigned as a Non-executive Director of the Company on 16 January 2017 due to job adjustment. (4) Mr. Tang Shuangning resigned as Chairman and Non-executive Director of the Company on 27 December 2017 due to his age. (5) Since 2013, the remuneration of Independent Non-executive Directors has included a basic remuneration of RMB280 thousand/person/year (before tax), plus an allowance of RMB30 thousand/position/year (before tax) for chairmen of the Special Committees of the Board and an allowance of RMB20 thousand/position/year (before tax) for members of the Special Committees of the Board. A director acting as chairman or member of more than one Committee can receive remuneration on a cumulative basis. (6) In 2017, Mr. Xu Hongcai, an Independent Non-executive Director, did not receive any remuneration from the Company

12 LETTER FROM THE BOARD 9. REMUNERATION OF THE SUPERVISORS FOR THE YEAR 2017 In accordance with the relevant requirements of the Articles of Association of the Company and the performance of duties by the Supervisors, the proposed remuneration of the Supervisors for the year 2017 are set out below: Name Position Unit: RMB ten thousand Remuneration for 2017 (before tax) Li Xin Chairman of the Board of Supervisors, Shareholder Representative Supervisor Yin Lianchen Shareholder Representative Supervisor Wu Junhao Shareholder Representative Supervisor Yu Erniu External Supervisor Wu Gaolian External Supervisor Wang Zhe External Supervisor Sun Xinhong Employee Representative Supervisor Jiang Ou Employee Representative Supervisor Huang Dan Employee Representative Supervisor Resigned Supervisor Mu Huijun Former Vice Chairman of the Board of Supervisors, Employee Representative Supervisor Liu Yan Former Employee Representative Supervisor Deng Ruilin Former External Supervisor Ye Donghai Former Employee Representative Supervisor Note: (1) Shareholder Representative Supervisors (except Mr. Li Xin) do not receive remuneration from the Company. (2) Since 2013, the remuneration of External Supervisors has included a basic remuneration of RMB250 thousand/ person/year (before tax), plus an allowance of RMB30 thousand/position/year (before tax) for Chairmen of the Special Committees of the Board of Supervisors and an allowance of RMB20 thousand/position/year (before tax) for members of the Special Committees of the Board of Supervisors. A Supervisor acting as chairman or member of more than one Committee can receive remuneration on a cumulative basis. In 2017, Mr. Deng Ruilin, an External Supervisor, did not receive any remuneration from the Company. (3) Employee Representative Supervisors (except Mr. Mu Huijun) received remunerations in the capacities as employees, but did not receive any remuneration in their capacities as Employee Representative Supervisors. (4) The remunerations of Mr. Li Xin and Mr. Mu Huijun for the year 2017 are determined with reference to the remuneration standards of the senior management of the Company. The final amounts are yet to be confirmed and will be disclosed once confirmed

13 LETTER FROM THE BOARD (5) On 1 March 2017, Mr. Mu Huijun resigned as Vice Chairman of the Board of Supervisors, an Employee Representative Supervisor and a member of the Supervision Committee under the Board of Supervisors of the Company for age reasons. (6) On 12 June 2017, due to job assignment, Ms. Liu Yan resigned as an Employee Representative Supervisor and a member of the Nomination Committee under the Board of Supervisors of the Company. (7) On 16 October 2017, due to job assignment, Mr. Ye Donghai resigned as an Employee Representative Supervisor and a member of the Supervision Committee under the Board of Supervisors of the Company. (8) On 20 October 2017, Mr. Deng Ruilin resigned an External Supervisor, a member of the Nomination Committee and a member of the Supervision Committee under the Board of Supervisors of the Company for age reasons. 10. THE AGM The AGM will be held at the conference room of 3rd Floor, Tower A, China Everbright Center, No. 25 Taipingqiao Avenue, Xicheng District, Beijing, PRC on Friday, 22 June 2018 at 9:30 a.m.. The AGM notice and relevant proxy form and reply slip for the AGM were dispatched to Shareholders on 7 May CLOSURE OF REGISTER OF MEMBERS FOR THE AGM In order to determine the Shareholders of H Shares who will be entitled to attend the AGM, the Company will suspend registration of transfer of H Shares from Wednesday, 23 May 2018 to Friday, 22 June 2018 (both days inclusive). Holders of H Shares whose names appear on the register of members of the Company maintained in Hong Kong on Friday, 22 June 2018 are entitled to attend the AGM. In order to qualify to attend the AGM, holders of H Shares of the Company whose transfer documents had not been registered must deposit the transfer documents accompanied by relevant share certificates to the Company s H Share Registrar, Computershare Hong Kong Investor Services Limited at Rooms , 17th Floor, Hopewell Centre, 183 Queen s Road East, Wan Chai, Hong Kong no later than 4:30 p.m. on Monday, 21 May A reply slip and a form of proxy for use at the AGM were also published on the websites of the Hong Kong Stock Exchange ( and the Company ( Shareholders who intend to attend the AGM in person or by proxy shall complete and return the reply slip in accordance with the instructions printed thereon on or before 2 June Shareholders who intend to appoint a proxy to attend the AGM shall complete and return the form of proxy in accordance with the instructions printed thereon not less than 24 hours before the time designated (i.e. not later than 9:30 a.m. on Thursday, 21 June 2018) for holding the AGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending the AGM and voting in person if you so wish. 12. CLOSURE OF REGISTER OF MEMBERS FOR DISTRIBUTION OF 2017 FINAL DIVIDEND In order to determine the Shareholders of H Shares entitled to receive the final dividend for the year ended 31 December 2017, the Company will suspend registration of transfer of shares from Thursday, 28 June 2018 to Tuesday, 3 July 2018 (both days inclusive)

14 LETTER FROM THE BOARD In order to qualify to receive the final dividend, Shareholders of H Shares of the Company who have not had their transfer documents registered must deposit the transfer documents accompanied by relevant share certificates to the Company s H Share Registrar, Computershare Hong Kong Investor Services Limited at Rooms , 17th Floor, Hopewell Centre, 183 Queen s Road East, Wan Chai, Hong Kong no later than 4:30 p.m. on Wednesday, 27 June Holders of H Shares whose names are recorded in the register of members of the Company on Tuesday, 3 July 2018 are entitled to receive the final dividend for the year RECOMMENDATIONS The Directors consider that the resolutions as stated in the notice of AGM are in the best interests of the Company and its Shareholders. Accordingly, the Directors recommend the Shareholders to vote in favour of such resolutions to be proposed at the AGM. Yours faithfully, On Behalf of the Board China Everbright Bank Company Limited LI Xiaopeng Chairman As at the date of this circular, the Executive Directors of the Company are Mr. Zhang Jinliang and Ms. Li Jie; the Non-executive Directors are Mr. Li Xiaopeng, Mr. Cai Yunge, Mr. Zhang Shude, Mr. Li Huaqiang, Mr. Fu Dong and Mr. Zhao Wei; and the Independent Non-executive Directors are Mr. Qiao Zhimin, Mr. Xie Rong, Ms. Fok Oi Ling Catherine, Mr. Xu Hongcai, Mr. Feng Lun and Mr. Wang Liguo

15 APPENDIX I 2017 WORK REPORT OF THE BOARD OF DIRECTORS To all shareholders, CHINA EVERBRIGHT BANK COMPANY LIMITED 2017 WORK REPORT OF THE BOARD OF DIRECTORS In 2017, the Board strictly abided by all applicable laws and regulations, regulatory requirements and the Articles of Association, and earnestly studied and implemented the requirements for financial sector in new era as proposed by the 19th National Congress of the CPC as well as the guiding principles of Central Economic Work Conference and the National Financial Work Conference. With diligent duties performance and scientific decision-making, we had further pushed forward business transformation, devoted greater effort in internal capital replenishment and leveled up the ability to resist risks; we also further advanced the reform of corporate governance, and continued to enhance the professionalism and effectiveness of the Board, thus facilitating sustained, stable and healthy development of the Company and delivering good values to shareholders and the society. Despite the complicated and changing external environment, in 2017, the Company had followed the CPC Central Committee s requirements and regulatory deployment to deleverage and promote transformation. It served the real economy vigorously, optimized its asset and debt structure, properly coped with risks and challenges and firmly advanced the reform measures, and as a result, there was progress and goodness in its overall business while maintaining its stability. As at the end of the year of 2017, the Company s total assets were RMB4,088,243 million, representing an increase of 1.70%; the common equity tier-1 capital adequacy ratio was 9.56%, tier-1 capital adequacy ratio was 10.61% and capital adequacy ratio was 13.49%; net profit attributable to equity shareholders of the Company was RMB31,545 million, representing an increase of 4.01%. I. REINFORCED STRUCTURAL ADJUSTMENT AND ORGANIZATION FORMING, AND CONTINUOUSLY PROMOTED ITS DEVELOPMENT ABILITIES (I) Paid close attention to the strategies implementation, and further accelerated operational transformation The Board paid close attention to the strategic transformation and business structure adjustment of the Company, and had put forward definite requirements for improving profitability, preventing and controlling liquidity risk and other aspects after listening to the management s special report on strategies implementation. In respond to the macro-policy direction of the state, the management kept to its strategic goals and persevered prudent operation, while fulfilling the regulatory requirement of deleveraging without causing significant fluctuation to operations. On the basis of maintaining steady revenue growth, the Company stuck to supportive and restrictive policies and favorable and discouraging policies, returned to the origin and focused on principal business, reduced interbank business, cemented the foundation of deposit and loan business, proactively supported the loans to small and micro enterprises and channeled more credit resources to national strategic fields and weak sectors. With business structure adjustment, the Company has recorded stable asset growth, and assets quality and liquidity condition, and had all its key business indicators achieve budget goals

16 APPENDIX I 2017 WORK REPORT OF THE BOARD OF DIRECTORS (II) Further expanded our business scope, and enhanced the capability to serve the real economy In 2017, in order to implement the requirements imposed by the former CBRC and other regulatory authorities and support the management to deepen the internal reform, the Board had considered and approved the resolution regarding the establishment of Inclusive Finance Department (Micro and Small Enterprise Banking Department), and had listened to the management s report in relation to merging Group Customer Department and Investment Banking Department into Strategic Customer and Investment Banking Department; it also approved the increase of the Company s contribution amount and proportion to Everbright Consumer Finance Company Limited as well as the investment in capital of Visa Information Technology (Beijing) Co., Ltd.. Under the support and promotion of the Board, the management actively pushed forward its international strategy via accelerating its progress to set up overseas institutions, and, as a result, the CEB (Europe) S.A. and CEB Luxembourg branch has commenced operation successfully during the year and establishment of CEB Sydney are now under stable progress. The expansion and optimization of the domestic and abroad institutions make our business scope and service coverage more comprehensive and our resources allocation getting reasonable, which further enhance our enterprise competence to serve real economy and the Belt and Road initiative. II. EXERTED OUR BEST EFFORTS TO STRENGTHEN CAPITAL REPLENISHMENT AND RISK MANAGEMENT AND CONTROL (I) Replenished capital through multiple channels, which significantly enhanced our capital strength The Board of Directors has always attached great importance to capital replenishment. In 2017, it approved the revised version of the Capital Management Policy and reviewed and passed relevant capital replenishment proposals including the issuance of A-share convertible corporate bonds and the non-public issuance of H Shares. Through unremitting efforts, the Company completed the issuance of RMB40 billion tier-2 capital bonds and RMB30 billion A-share convertible corporate bonds and direct issuance of RMB31 billion H Shares during the year and raised funds totaling approximately RMB100 billion. The non-public issuance of H Shares was completed in late December 2017 with a total of 5.81 billion H Shares issued. Through this issuance, OCT Group was introduced as an important strategic investor to the Company, which effectively replenished our common equity tier-1 capital sources. By replenishing capital through multiple channels, we have consolidated our capital strength, optimized our capital structure and enhanced our risk tolerance, which further provided solid support for our business development. (II) Continuously strengthened our risk management and control to prevent and address various risks In 2017, the Board of Directors insisted on highlighting risk management in response to the severe and complicated external environment. Having considered the market environment, regulatory requirements and the Company s actual condition, we have revised comprehensive risk management policies and re-examined annual risk preferences and tolerance indicators to promote a healthy and sustained development of all businesses. We have also strictly controlled credit risks by controlling

17 APPENDIX I 2017 WORK REPORT OF THE BOARD OF DIRECTORS incremental credits and reducing the inventory, maintaining the overall stability of asset quality. In addition, we have strengthened the adjustment of assets and liabilities structure and the prevention and control of liquidity risks and cross-financial risks, which significantly improved our liquidity. As of the end of 2017, all major risk management indicators of the Company were within the tolerance limits determined by the Board of Directors and met regulatory requirements. III. FURTHER OPTIMIZED THE GOVERNANCE STRUCTURE AND MECHANISM TO STRENGTHEN THE GOVERNANCE FOUNDATION (I) Complied with the requirements of incorporating CPC party-building into the Articles of Association and improved the corporate governance structure In 2017, the Board of Directors continued to strengthen the construction of our corporate governance system. Adhering to the spirit of the major meetings of the Central Government and pursuant to the specific requirements of incorporating CPC party-building into the Articles of Association and the regulatory guidelines of the former CBRC, combined with the actual condition after the completion of the issuance of the Company s 2nd Tranche Preference Shares and the nonpublic issuance of H Shares, the Board of Directors revised the Articles of Association twice, clarifying the statutory status of the CPC Committee in corporate governance and the general requirements for CPC party building work, and further clarifying the boundaries of responsibilities among different governance entities and organically combining CPC Party leadership with corporate governance, respectively, to continuously deepen corporate governance reforms. In the course of the above revisions, the Board closely followed the latest regulatory developments to ensure the compliant content and procedures of the amendments. (II) Optimized the functional structure of the Board of Directors and practiced our social responsibility In order to respond positively to the State s requirements for vigorous development of inclusive finance and the promotion of inclusive financial service capabilities, and to further strengthen the strategic guidance for the protection of consumer rights of the Company, the Board of Directors started with the top-level design and added Inclusive Finance Development and Consumer Rights and Interests Protection Committee to its Special Committees. The Board formulated specific work rules, and made adjustments to the functions of the Strategy Committee so it could effectively fulfill its functions related to strategic planning and deliberation of basic management systems. The adjustment and optimization of the Special Committees reinforced the responsibilities of the Board of Directors and ensured the coordinated advancement of the overall work of the Company. IV. PROMOTED RISK MANAGEMENT TO FACILITATE THE COMPANY S COMPLIANT OPERATION (I) Took the opportunity of regulatory inspection to improve compliance operation In 2017, regulatory authorities, including the former CBRC, enhanced their efforts on various specific governance practices. Capturing this opportunity, the Board inspected the allocation of risk control responsibilities among the Board, the Board of Supervisors and the senior management and

18 APPENDIX I 2017 WORK REPORT OF THE BOARD OF DIRECTORS identified risk control, the duty performance of the Board, the Board of Supervisors and the senior management and the duty performance of individuals as three major areas. Shareholding management, remuneration management, the compliance of major regulatory indicators, asset quality, the prevention of incidents, anti-money laundering, liquidity risk management, connected transactions management, the prevention of tunneling, the duty performance of the Board and Directors, the Board of Supervisors and Supervisors as well as the senior management and other major areas of risk management relating to the Board, the Board of Supervisors and the senior management are sorted and inspected. Meanwhile, the management was required to conduct other self-inspections and cooperate with the regulatory authorities to implement the subsequent on-site inspections. Through self-inspections and inspections by other parties, the Company cautiously identified issues and inefficiencies in its corporate governance to compliance its compliant operation level. (II) Strengthened fairness investigation to ensure the compliance of connected transactions In 2017, the Board and the Related Party Transactions Control Committee instructed the management to further specify the connotation of the fairness investigation for connected transactions and strictly implement the requirement of not favorable than the conditions offer by non-related parties in accordance with relevant guidance setting out in the Core Principles of Effective Banking Supervision ( 有效銀行監管核心原則 ), while cautiously conducting the approval and filling of connected transactions. In addition, according to relevant domestic and foreign regulatory policies, the Company focused on strengthening the review on connected transactions with major Shareholders involving the issuance of A-share convertible corporate bonds, the non-public issuance of H Shares and other financing activities, with an aim to prevent tunneling and protect the legal interests of small and medium shareholders. V. FULFILLED DISCLOSURE OBLIGATIONS ON CAUTIOUS BASIS TO IMPROVE THE TRANSPARENCY OF OPERATION AND MANAGEMENT (I) Fulfilled information disclosure on compliant and efficient basis to enhance external supervision According to the regulatory requirement in Hong Kong and Shanghai, the Board cautiously reviewed the Company s 2016 Annual Report, 2017 First Quarterly Report, 2017 Interim Report and 2017 Third Quarterly Report, and discussed in-depth with the management and external auditors to ensure their authenticity, accuracy and completeness as well as timely publish. In order to disclose information of major events for compliance purpose, the Company published 102 A-share ad hoc announcements and 151 H-share ad hoc announcements, emphasizing on the announcement of the refinancing activities such as issuance of convertible bonds, preferred shares and non-public issuance of H-share and the management of insiders, to prevent sensitive information from leakage. After the comprehensive review of the Shanghai Stock Exchange, the Company s information disclosing for the Year remained A ranking

19 APPENDIX I 2017 WORK REPORT OF THE BOARD OF DIRECTORS (II) Actively implemented investor relation management to maintain market image Under the instruction of the Board, the management continuously enhanced its investor relation management by holding result conferences, dividend presentations and domestic and foreign news media communications to communicate with domestic and foreign institutional investors, banking analysts and news media; by accepting domestic and foreign investment bank analysts and foreign institutional investors for visiting and site investigation; by answering calls from domestic and foreign investors and replying s; by using the Shanghai Stock Exchange E-Interaction and other interactive platforms to keep communication with investors; by continuously updating Chinese and English website to make it easier for investors to understand company information. VI. SCIENTIFIC AND PROFESSIONAL DECISION-MAKING TO PROMOTE THE EFFICIENCY OF THE BOARD OF DIRECTORS (I) All directors performed their duties diligently and actively participated in the operation of the Board of Directors The Board of Directors convened 11 board meetings throughout the year, discussed 57 proposals and debriefed 17 reports. All directors earnestly performed their duties by timely attending board meetings and meetings of Special Committees of the Board of Directors, and actively participating in discussions and prudently expressing opinions. When the Board of Directors was not in session, some directors were well informed of regulatory policies and operation management news of the Company and reaped information required for decision-making by attending various meetings and work exchanges. Certain directors visited a number of branches to conduct special research and investigation, visited local regulatory authorities, and also went abroad to know the details of corporate governance, risk management, and overseas institutions establishment. During the year, the Board of Directors and the Audit Committee invited intermediaries to hold talks to introduce special subjects such as the status of listed banks, wealth management and business transformation, director responsibilities and compliance issues of Hong Kong listed companies (including insider trading and disclosure of interests). Some directors also participated in the training and seminars held by institutions including the Listed Companies Association of Beijing to continuously elevate their ability to perform duties. Keeping to the principle of honesty and diligence, independent directors carried out their duties independently and objectively and provided advices and suggestions for the Company s continuous optimization of corporate governance and improvement of the level of operation and management with their respective expertise. By focusing on the profit distribution plan, major related party transactions and nomination and remuneration programs for directors and senior management personnel, they have protected the overall interests of the Company and legitimate interests of small and medium shareholders, showing its important role played in the Board of Directors and its Special Committees

20 APPENDIX I 2017 WORK REPORT OF THE BOARD OF DIRECTORS (II) Special Committees actively performed their duties and assisted the Board of Directors in scientific decision-making All Special Committees of the Board of Directors conducted in-depth discussions and analyses on major operational and management matters in accordance with their respective duties and term of reference, so as to provide professional supports for the scientific decision-making of the Board of Directors. During the year, the Committees held a total of 24 meetings, at which 43 proposals were considered and approved and 19 special reports were debriefed including: The Strategy Committee convened 3 meetings, at which it mainly considered proposals including the Company s business plans and financial budget plans for 2017, the fixed assets investment budget, proposal on non-public issuance of H Shares and proposals on adjustments to investment amount and proportion to Everbright Consumer Finance Company Limited, and investment in capital of Visa Information Technology (Beijing) Co., Ltd., etc. The Committee also heard and discussed the summary report on protection of consumer rights and interests in 2016 and plan for 2017, as well as report on strategy implementation in The Audit Committee convened 5 meetings, at which it mainly discussed the financial analysis report, regular reports, accounting firm s audit work, internal control evaluation reports and internal control and audit reports, the implementation of authorization granted to the President by the Board of Directors, the resolution on changes in accounting policies, etc. The Committee also heard and discussed internal audit summaries and plans, the 2016 Management Proposal and reports on rectification measures. The Risk Management Committee convened 3 meetings, at which it mainly discussed periodic risk management report, risk preference review and setting suggestion, credit and investment policy, anti-money laundering management, data quality management, internal capital adequacy assessment report, proposal on the revision of the Capital Management Policy and Comprehensive Risk Management Policy etc., and continued to focus on the approval of substantial credit facilities. The Nomination Committee convened 4 meetings, proposed advice on the composition of members of some Special Committees of the seventh session of the Board of Directors, and preliminarily reviewed and made recommendations to the Board of Directors regarding the qualification of new directors and senior management personnel. The Remuneration Committee convened 4 meetings, at which it mainly discussed proposals including overall duty performance evaluation report of directors by the Board of Directors for 2016 and remuneration standards of directors for It also studied and proposed the appraisal and evaluation conclusions as well as the remuneration standards of senior management personnel for The Related Party Transactions Control Committee convened 5 meetings, at which it mainly discussed proposals such as annual report on related party transactions, four major related party transactions and related party transactions regarding relevant capital replenishment, and accepted 39 record reports of general related party transactions

21 APPENDIX I 2017 WORK REPORT OF THE BOARD OF DIRECTORS (III) Implemented resolutions of general meeting earnestly and carried out work in accordance with authorization strictly In this year, the Board of Directors convened 3 general meetings of stockholders, discussed 26 proposals and debriefed 2 reports. General meetings of shareholders mainly reviewed and approved major matters including the fixed assets investment budget plan, final account report, profit distribution plan, remuneration standards for directors and supervisors, revision of the Articles of Association, election of non-executive directors, reports of the Board of Directors and the Board of Supervisors, non-public issuance of preference shares and non-public issuance of H Shares. According to the resolutions passed at the general meetings of shareholders, the Board of Directors oversaw the implementation of the fixed assets investment budget plan by the management, arranged the distribution of dividends, timely submitted the non-public issuance plan of H Shares to regulatory authorities and declared the qualification of new directors. The Board of Directors, strictly in accordance with the Plan of Authorization by General Meeting of Shareholders to the Board of Directors, exercised its authority determined thereunder and carried out various tasks in compliance with the laws and regulations. As at the end of 2017, this plan was implemented effectively with no power exercised beyond authorization. Approval procedures were implemented strictly as required for the matters considered, thus ensuring the role of general meeting in decision making of material matters is the first year for implementing the guiding principles and policies of the 19th CPC National Congress, and a critical year for securing a decisive victory in building a moderately prosperous society in all respects. The Board of Directors of the Company will strictly adhere to the strategic philosophy of To establish a first-class joint-stock commercial bank in China for the realization of the mighty Everbright Group in about 10 years, scientifically analyze the domestic and foreign economic situation, actively implement various regulatory requirements, deepen the promotion of corporate governance reform, reviews and optimizes the strategic plans, accelerate the transformation and development and continuously creates greater value for the Shareholders and the society while achieving a favourable opening for promoting the roadmap of strategic goal Three steps