BANK OF TIANJIN CO., LTD. * *

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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in Bank of Tianjin Co., Ltd.* ( ), you should at once hand this circular and the proxy form and reply slip to the purchaser or 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 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. BANK OF TIANJIN CO., LTD. * * (A joint stock company incorporated in the People s Republic of China with limited liability) (Stock Code: 1578) WORK REPORT OF THE BOARD OF DIRECTORS FOR 2017 WORK REPORT OF THE BOARD OF SUPERVISORS FOR 2017 REPORT FOR FINAL FINANCIAL ACCOUNTS FOR 2017 PROFIT DISTRIBUTION PLAN FOR 2017 REPORT FOR FINANCIAL BUDGET FOR 2018 RE-ELECTION AND APPOINTMENT OF DIRECTORS FOR THE SIXTH SESSION OF THE BOARD OF DIRECTORS OF THE BANK RE-ELECTION AND APPOINTMENT OF SUPERVISORS (EXCLUDING EMPLOYEE SUPERVISORS) FOR THE SIXTH SESSION OF THE BOARD OF SUPERVISORS OF THE BANK PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATIONS PROPOSED AMENDMENTS TO THE PROCEDURAL RULES FOR THE BOARD OF DIRECTORS OF THE BANK PROPOSED AMENDMENTS TO THE PROCEDURAL RULES FOR THE BOARD OF SUPERVISORS OF THE BANK PROPOSED AMENDMENTS TO THE ADMINISTRATIVE MEASURES ON REMUNERATION FOR DIRECTORS AND SUPERVISORS OF THE BANK RE-APPOINTMENT OF EXTERNAL AUDITORS FOR 2018 AND NOTICE OF 2017 ANNUAL GENERAL MEETING A notice convening the 2017 AGM to be held at Geneva Hotel (No. 32 Youyi Road, Hexi District, Tianjin, PRC) at 9:30 a.m. on Friday, May 11, 2018 is set out on pages 60 to 64 of this circular. If you intend to appoint a proxy to attend the 2017 AGM, you are required to complete and return the proxy form in accordance with the instructions printed thereon as soon as possible. The proxy form (together with a notarially certified copy of the power of attorney or other authority (if any) if the proxy form is signed by a person on behalf of the appointor) must be delivered by the holders of H Shares to the H Share Registrar of the Bank, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen s Road East, Wanchai, Hong Kong not later than 9:30 a.m. on Thursday, May 10, 2018 (Hong Kong time). If you intend to attend the 2017 AGM in person or by proxy, holders of H Shares of the Bank are required to return the reply slip in person, by post or by facsimile to the H Share Registrar, Computershare Hong Kong Investor Services Limited, on or before Saturday, April 21, Completion and return of a proxy form will not preclude a Shareholder from attending in person and voting at the 2017 AGM if he so wishes, but in such event the instrument appointing a proxy shall be deemed to be revoked. * Bank of Tianjin Co., Ltd. is not an authorised institution within the meaning of the Banking Ordinance (Chapter 155 of the Laws of Hong Kong), not subject to the supervision of the Hong Kong Monetary Authority, and not authorised to carry on banking/deposit-taking business in Hong Kong. March 27, 2018

2 TABLE OF CONTENTS Page DEFINITIONS... 1 LETTER FROM THE BOARD... 3 APPENDIX I WORK REPORT OF THE BOARD OF DIRECTORS OF BANK OF TIANJIN FOR APPENDIX II WORK REPORT OF THE BOARD OF SUPERVISORS OF BANK OF TIANJIN FOR APPENDIX III BIOGRAPHIES OF CANDIDATES FOR DIRECTORS APPENDIX IV BIOGRAPHIES OF CANDIDATES FOR SUPERVISORS APPENDIX V PROPOSED AMENDMENTS TO THE PROCEDURAL RULES FOR THE BOARD OF DIRECTORS APPENDIX VI PROPOSED AMENDMENTS TO THE PROCEDURAL RULES FOR THE BOARD OF SUPERVISORS APPENDIX VII PROPOSED AMENDMENTS TO THE ADMINISTRATIVE MEASURES ON REMUNERATION FOR DIRECTORS AND SUPERVISORS OF THE BANK NOTICE OF 2017 ANNUAL GENERAL MEETING i

3 DEFINITIONS In this circular, unless the context requires otherwise, the following expressions have the following meanings: AGM or 2017 AGM the annual general meeting of the Bank or any adjournment thereof to be held at Geneva Hotel (No. 32 Youyi Road, Hexi District, Tianjin, PRC), at 9:30 a.m., on Friday, May 11, 2018, a notice of which is set out on pages 60 to 64 of this circular Articles of Association the articles of association of the Bank (as amended, modified or otherwise supplemented from time to time) Bank Bank of Tianjin Co., Ltd. ( ), a joint stock company incorporated on November 6, 1996 in Tianjin, China with limited liability in accordance with PRC laws, and, if the context requires, includes its predecessors, subsidiaries, branches and sub-branches and the H Shares of the Bank are listed on the Hong Kong Stock Exchange on March 30, 2016 (stock code: 1578) Board or Board of Directors the board of Directors Board of Supervisors the board of Supervisors CBRC Tianjin Office the Tianjin Office of the China Banking Regulatory Commission ( ) Director(s) the director(s) of the Bank Domestic Share(s) ordinary share(s) issued by the Bank, with a nominal value of RMB1.00 each, which are subscribed for or credited as paid up in Renminbi H Share(s) overseas listed foreign share(s) with a nominal value of RMB1.00 each, which are listed and traded on the Hong Kong Stock Exchange on March 30, 2016 and subscribed for and traded in HK dollars H Shareholder(s) holder(s) of H Shares H Share Registrar Computershare Hong Kong Investor Services Limited HK$ Hong Kong dollars, the lawful currency of Hong Kong 1

4 DEFINITIONS Hong Kong Hong Kong Listing Rules Hong Kong Stock Exchange Macau PRC or China RMB Shareholders Shares Supervisor(s) the Hong Kong Special Administrative Region of the PRC the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended, supplemented or otherwise revised from time to time The Stock Exchange of Hong Kong Limited the Macau Special Administrative Region of the PRC the People s Republic of China which, for the purposes of this circular, excludes Hong Kong, Macau and the Taiwan region Renminbi, the lawful currency of the PRC the holder(s) of Shares the Domestic Shares and H Shares of the Bank the supervisor(s) of the Bank % per cent. 2

5 LETTER FROM THE BOARD BANK OF TIANJIN CO., LTD. * * (A joint stock company incorporated in the People s Republic of China with limited liability) (Stock Code: 1578) Board of Directors: Executive Directors Mr. LI Zongtang Mr. SUN Liguo Ms. ZHANG Furong Non-executive Directors Mr. ZHAO Jiawang Mr. YU Yang Mr. Alistair Marshall Bulloch Mr. ZHAO Wei Mr. LUAN Fengxiang Mr. ZENG Xiangxin Registered Address and Address of Head Office: No. 15 Youyi Road, Hexi District, Tianjin, China Principal Place of Business in Hong Kong: 18/F, Tesbury Centre, 28 Queen s Road East, Wanchai, Hong Kong Independent non-executive Directors Mr. LIU Baorui Mr. FENG Heping Mr. GUO Tianyong Mr. LAW Yee Kwan, Quinn Mr. JIN Qingjun To the Shareholders WORK REPORT OF THE BOARD OF DIRECTORS FOR 2017 WORK REPORT OF THE BOARD OF SUPERVISORS FOR 2017 REPORT FOR FINAL FINANCIAL ACCOUNTS FOR 2017 PROFIT DISTRIBUTION PLAN FOR 2017 REPORT FOR FINANCIAL BUDGET FOR 2018 RE-ELECTION AND APPOINTMENT OF DIRECTORS FOR THE SIXTH SESSION OF THE BOARD OF DIRECTORS OF THE BANK RE-ELECTION AND APPOINTMENT OF SUPERVISORS (EXCLUDING EMPLOYEE SUPERVISORS) FOR THE SIXTH SESSION OF THE BOARD OF SUPERVISORS OF THE BANK PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATIONS PROPOSED AMENDMENTS TO THE PROCEDURAL RULES FOR THE BOARD OF DIRECTORS OF THE BANK PROPOSED AMENDMENTS TO THE PROCEDURAL RULES FOR THE BOARD OF SUPERVISORS OF THE BANK PROPOSED AMENDMENTS TO THE ADMINISTRATIVE MEASURES ON REMUNERATION FOR DIRECTORS AND SUPERVISORS OF THE BANK RE-APPOINTMENT OF EXTERNAL AUDITORS FOR 2018 AND NOTICE OF 2017 ANNUAL GENERAL MEETING 3

6 LETTER FROM THE BOARD Dear Sir or Madam, I. INTRODUCTION The AGM of the Bank will be held at 9:30 a.m. on Friday, May 11, 2018 and resolutions will be proposed to consider and approve, inter alia, the Work Report of the Board of Directors for 2017, the Work Report of the Board of Supervisors for 2017, the Report for Final Financial Accounts for 2017, the Profit Distribution Plan for 2017, the Report for Financial Budget for 2018, re-election and appointment of Directors for the sixth session of the Board of the bank, re-election and appointment of Supervisors (excluding employee Supervisors) for the sixth session of the Board of Supervisors of the bank, the proposed amendments to the Articles of Association, proposed amendments to the procedural rules for the Board of Directors of the Bank, proposed amendments to the procedural rules for the Board of Supervisors of the Bank, proposed amendments to the administrative measures on remuneration for Directors and Supervisors of the bank and the re-appointment of external auditors for The purpose of this circular is to provide you with the notice of the AGM and to provide you with all the information reasonably necessary to enable you to make an informed voting decision on the proposed resolutions at the AGM. II. MATTERS TO BE RESOLVED AT THE AGM 1. Work Report of the Board of Directors for 2017 For the Work Report of the Board of Directors for 2017, please refer to Appendix I to this circular. 2. Work Report of the Board of Supervisors for 2017 For the Work Report of the Board of Supervisors for 2017, please refer to Appendix II to this circular. 3. Report for Final Financial Accounts for 2017 In 2017, the total asset was approximately RMB701,913.6 million while the total liabilities amounted to approximately RMB657,157.7 million. We recorded an interest income of RMB27,894.7 million, interest expense of RMB19,493.5 million and net interest income amounted to RMB8,401.2 million. The net fee and commission income, net trading losses, net gains arising from investment securities was RMB2,033.5 million, RMB172.6 million and RMB15.6 million, respectively. In 2017, our tax and surcharges amounted to RMB118.7 million. Our operating expenses amounted to approximately RMB3,102.6 million. The impairment losses on assets was RMB2,131.9 million and we wrote off non-performing assets amounting to RMB298.7 million. We recorded a profit before provision of RMB7,015.0 million, with profit and net profits amounting to RMB4,882.9 million and RMB3,943.1 million, respectively. 4

7 LETTER FROM THE BOARD 4. Profit Distribution Plan for 2017 On March 23, 2018, the Board resolved to submit to the Shareholders for their consideration and approval a profit distribution plan for the year ended December 31, 2017 as follows: (i) (ii) an aggregate of RMB337.7 million will be appropriated to the statutory surplus reserve; an aggregate of RMB722.4 million will be appropriated to the general risk reserve; and (iii) a cash dividend in an aggregate amount of RMB1,092.7 million, or RMB1.8 per ten Shares (tax inclusive) will be distributed to all the Shareholders. The undistributed profit which amounted to RMB1,723.5 million will be carried forward to the subsequent years. The Bank will distribute to the Shareholders whose name appears in the register of members of the Bank on May 22, 2018, a final dividend in cash for the year ended December 31, 2017 in an aggregate amount of approximately RMB1,092.7 million, representing a dividend of RMB1.8 per ten Shares (tax inclusive). The final dividend of the Bank for the year ended December 31, 2017 will be denominated and declared in RMB. Distribution of the dividends to holders of the Domestic Shares will be paid in RMB, while dividends to holders of the H Shares will be paid in Hong Kong dollars. For such conversion, RMB will be converted into Hong Kong dollars based on the average middle exchange rate as announced by the People s Bank of China prevailing five business days before May 11, 2018 (inclusive), the date of the Bank s 2017 AGM. The H Share register of members of the Bank will be closed from Thursday, May 17, 2018 to Tuesday, May 22, 2018, both days inclusive, during which period no transfer of the H Shares will be effected. All transfers, accompanied by the relevant share certificates, must be lodged for registration with the H Share Registrar of the Bank, Computershare Hong Kong Investor Services Limited, at Shops , 17th Floor, Hopewell Centre, 183 Queen s Road East, Wanchai, Hong Kong, by no later than 4:30 pm on Wednesday, May 16, It is expected that the dividend will be paid on July 6, Pursuant to the applicable provisions and the implementing regulations of the Enterprise Income Tax of the PRC ( ), the Bank shall withhold the enterprise income tax at the rate of 10% for non-resident enterprises holders of H Shares (including the H Shares registered in the name of HKSCC Nominees Limited). For non-resident enterprises holders of H Shares who is a resident enterprise of a country/region that has signed a tax treaty with the PRC stipulating a dividend rate lower than 10%, the Bank will follow the Notice of the State Administration of Taxation on the Issues concerning 5

8 LETTER FROM THE BOARD Withholding the Enterprise Income Tax on the Dividends Paid by Chinese Resident Enterprises to H-share Holders Which Are Overseas Non-resident Enterprises to handle the application of the relevant tax benefits on their behalf while distributing the final dividend. Pursuant to the applicable provisions and the implementing regulations of the Individual Income Tax Law of the PRC ( ), Notice of the State Administration of Taxation in relation to the Administrative Measures on Enjoying Treatment under Taxation Treaties by Non-Residents (Trial) (Guo Shui Fa [2009] No. 124) and the Notice on Matters Concerning the Levy and Administration of Individual Income Tax After the Repeal of Guo Shui Fa [1993] No. 045 (Guo Shui Han No. [2011]348) (the Notice of Tax ), the Bank shall withhold and pay individual income tax from and for the holders of H Shares according to the following arrangement: For an individual holder of H Shares who is a resident of Hong Kong, Macau or other country/region that has signed a tax treaty with the PRC stipulating a rate of 10%, the Bank shall withhold and pay individual income tax at the rate of 10% on behalf of such holders of H Shares when distributing the final dividend; For an individual holder of H Shares who is a resident of a country/region which has signed a tax treaty with the PRC stipulating a rate of lower than 10%, the Bank shall temporarily withhold and pay individual income tax at the rate of 10% while distributing the final dividend. In case the relevant individual holders of H Shares are to apply for refund of the tax over-withheld, the Bank will follow the Notice of Tax to handle the application of the relevant tax benefits under the tax treaty on their behalf; For an individual holder of H Shares who is a resident of a country/region that has signed a tax treaty with the PRC stipulating a rate higher than 10% but lower than 20%, the Bank shall withhold and pay the individual income tax at the applicable rate stipulated in the relevant tax treaty while distributing the final dividend; and For an individual holder of H Shares who is a resident of a country/region which has signed a tax treaty with the PRC stipulating a rate of 20% or has no tax treaty with China or otherwise, the Bank shall withhold and pay the individual income tax at the rate of 20% while distributing the final dividend. The qualifying holders of H Shares are required to timely submit the written authorization and all application materials to the H Share Registrar of the Bank, Computershare Hong Kong Investor Services Limited; the Bank will forward the received documents to the competent tax authorities for review, and if approved, the Bank will assist in handling the refund of the over-withheld tax. 6

9 LETTER FROM THE BOARD 5. Report for Financial Budget for 2018 According to the Bank s strategic development and business expansion needs, the 2018 total budget for operating expenses will be capped at RMB3,850.0 million and such amount represents an increase of RMB866.0 million as compared to the operating expenses incurred by the Bank in The increase of the expected operating expenses is primarily due to investments in the establishment of the Bank s outlets and business expansion. The budget excludes potential expenses for establishment of new controlling subsidiaries. 6. Re-Election and Appointment of Directors for the Sixth Session of the Board of Directors of the Bank Reference is made to the Bank s announcement dated March 23, 2018 in relation to the proposed re-election and appointment of the Director candidates for the sixth session of the Board of Directors of the Bank. According to the Articles of Association of the Bank, the term of office of a director shall be three years, and a director may be re-elected and re-appointed upon expiry of his/her term of office. With the expiry of the term of appointment of Directors for the fifth session of the Board of the Bank, the Board resolved on March 23, 2018 to make recommendations of the Director candidates for the sixth session of the Board. An ordinary resolution will be proposed at the AGM proposing the following: (i) (ii) the re-election of Mr. Li Zongtang, Mr. Sun Liguo and Ms. Zhang Furong and the appointment of Mr. Liang Jianfa as the executive Directors; the re-election of Mr. Alistair Marshall Bulloch and Mr. Zhao Wei and the appointment of Ms. Sun Jingyu, Mr. Wu Tao, Mr. Xiao Jingxi and Ms. Li Jun as the non-executive Directors; and (iii) the re-election of Mr. Feng Heping, Mr. Law Yee Kwan, Quinn, Mr. Jin Qingjun and the appointment of Mr. Hua Yaogang and Mr. He Jia as the independent non-executive Directors. The biographies of the above nominees ( Nominees of Directors ) as of the date of this circular are set out in Appendix III of this circular. Save as disclosed herein, as of the date of this circular, each of the Nominees of Directors confirmed that (i) he/she has not held any position of the Bank or its subsidiaries nor any other directorship or supervisorship in other listed companies for the past three years; (ii) he/she does not have any relationship with any other directors, supervisors, senior management, substantial or controlling shareholders of the Bank; and (iii) he/she does not have any interests in the shares of the Bank within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). 7

10 LETTER FROM THE BOARD Save as disclosed herein, there are no other matters concerning the re-appointment of each of the Nominees of Directors that are required to be disclosed pursuant to paragraphs 13.51(2)(h) to 13.51(2)(v) of the Hong Kong Listing Rules, and there are no other matters that need to be brought to the attention of the shareholders of the Bank. The appointment of the above Directors to be re-elected shall be effective subject to the approval of the annual general meeting. The appointment of proposed new Directors (namely, Mr. Liang Jianfa, Ms. Sun Jingyu, Mr. Wu Tao, Mr. Xiao Jingxi, Ms. Li Jun, Mr. Hua Yaogang and Mr. He Jia) shall become effective only after obtaining the approval of the CBRC Tianjin Office with regard to their qualification subject to the approval of the annual general meeting. The term of office of the new session of the Board shall be three years. The term of office of the Directors to be re-elected shall commence from the date when approval of such appointment by the annual general meeting is obtained up to the expiry of the sixth session of the Board. The term of office of the new Directors under the proposed appointment shall commence from the date of when approval of the CBRC Tianjin Office with regard to their qualification up to the expiry of the sixth session of the Board. Each of the re-elected and appointed Directors will enter into a service contract with the Bank after the approval of his/her appointment. The re-elected and appointed executive Directors and non-executive Directors will not receive Directors remuneration and/or allowance from the Bank during his/her term as Directors of the Bank. The re-elected and appointed independent non-executive Directors will receive Directors allowance with a standard of RMB160 thousand per person every year from the Bank during his/her term as Directors of the Bank with reference to the Administrative Measures for Allowance to Directors and Supervisors of Bank of Tianjin Co., Ltd. ( ) in terms of the amount of actual allowance for calculation and payment. 7. Re-Election and Appointment of Supervisors (Excluding Employee Supervisors) for the Sixth Session of the Board of Supervisors of The Bank Reference is made to the Bank s announcement dated March 23, 2018 in relation to the proposed re-election and appointment of the Supervisor candidates for the sixth session of the Board of Supervisors of the Bank. According to the Articles of Association of the Bank, the term of office of a supervisor is three years and the supervisors may be re-elected and re-appointed. With the expiry of the term of appointment of Supervisors for the fifth session of the Board of Supervisors of the Bank, the board of Supervisors resolved to make recommendations of the Supervisor candidates (excluding the employee Supervisors) for the sixth session of the Board of Supervisors. 8

11 LETTER FROM THE BOARD An ordinary resolution will be proposed at the AGM proposing the following: (i) (ii) the re-election of Mr. ZHANG Lianming and appointment of Mr. Liu Baorui as the external Supervisors; and the appointment of Mr. Yu Yang as the Shareholder Supervisor. The biographies of the above nominees ( Nominees of Supervisors ) as of the date of this circular are set out in Appendix IV of this circular. Save as disclosed herein, as of the date of this circular, each of the Nominees of Supervisors confirmed that (i) he/she has not held any position of the Bank or its subsidiaries nor any other directorship or supervisorship in other listed companies for the past three years; (ii) he/she does not have any relationship with any other directors, supervisors, senior management, substantial or controlling shareholders of the Bank; and (iii) he/she does not have any interests in the shares of the Bank within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). Pursuant to the Articles of Association, the employee Supervisors shall be elected and appointed by the general staff meeting of the Bank without the need to obtain approval of the Shareholders at the annual general meeting. Ms. Feng Xia and Mr. Yao Tao were re-elected at the general staff meeting of the Bank held on March 15, Save as disclosed herein, there are no other matters concerning the re-appointment of each of the Nominees of Supervisors that are required to be disclosed pursuant to paragraphs 13.51(2)(h) to 13.51(2)(v) of the Hong Kong Listing Rules, and there are no other matters that need to be brought to the attention of the shareholders of the Bank. The term of office of the new session of the Board of Supervisors shall be three years. The term of office of external Supervisors proposed to be re-appointed shall commence from the date when approval of such appointment by the annual general meeting to the expiry of the sixth session of the Board of Supervisors. The term of office of external Supervisors and Shareholder Supervisors proposed to be appointed (namely Mr. Liu Baorui and Mr. Yu Yang) shall commence from the date of their resign as a Director of the fifth session Board of Directors up to the expiry of the sixth session of the Board of Supervisors. The term of office of the employee Supervisors shall commence from March 15, 2018 up to the expiry of the sixth session of the Board. The employee Supervisors and Shareholder Supervisors will not receive supervisor s remuneration and/or allowance from the Bank during his/her term as supervisors of the Bank. Each of the external Supervisors will receive Supervisors allowance with a standard RMB160 thousand per person every year from the Bank during his/her term as Supervisors of the Bank with reference to the Administrative Measures for Allowance to Directors and Supervisors of Bank of Tianjin Co., Ltd. ( ) in terms of the amount of actual allowance for calculation and payment. 9

12 LETTER FROM THE BOARD 8. Proposed Amendment to the Articles of Association In order to continuously enhance the level of the corporate governance and further optimise the corporate governance system, the Board of Directors proposed to make amendments to the Articles of Association in accordance with the procedures and requirements in relation to the management of, and the rights and obligations of, shareholders under relevant laws and regulations, including Interim Measures for Equity Management of Commercial Banks ( ). The resolution is now proposed to the AGM to consider and approve by way of special resolution and further authorise the Board of Directors to make corresponding adjustments and modifications (including without limitation the wording, sections and terms) to the Articles of Association approved by the AGM in accordance with the requirements and opinions of relevant governmental or regulatory authorities (if applicable). The details of the proposed amendments to the Articles of Association are as follows (deletion shown by way of strikethrough and new addition by way of underline): Article 2 Paragraph 2 Article 62 Existing Provision The Bank was established by way of promotion pursuant to the Approval of the Establishment of Tianjin Urban Cooperative Bank (Yin Fu [1996] No. 155) granted by the People s Bank of China and the Approval of the Opening of Tianjin Urban Cooperative Bank (Yin Fu [1996] No. 352) granted by the People s Bank of China, and obtained the financial license. The Bank was registered with the Tianjin Administration for Industry & Commerce and obtained its business license on November 6, The Bank s license number is Holders of the ordinary shares of the Bank shall have the following obligations: (1) to abide by the laws, administrative regulations and these Articles; Amended Provision The Bank was established by way of promotion pursuant to the Approval of the Establishment of Tianjin Urban Cooperative Bank (Yin Fu [1996] No. 155) granted by the People s Bank of China and the Approval of the Opening of Tianjin Urban Cooperative Bank (Yin Fu [1996] No. 352) granted by the People s Bank of China, and obtained the financial license. The Bank was registered with the Tianjin Administration for Industry & Commerce and obtained its business license on November 6, The Bank s license number is The Bank s uniform social credit code is Holders of the ordinary shares of the Bank shall have the following obligations: (1) to abide by the laws, administrative regulations, regulatory requirements, and these Articles; (6) Any application requesting changes in shareholder holding more than five percent of total capital or the total share capital shall be considered by the Board of Directors of our Bank first, and then reported to the (6) Any application requesting changes in shareholder holding more than five percent of total capital or the total share capital shall be considered by the Board of Directors of our Bank first, and then reported to the 10

13 LETTER FROM THE BOARD Existing Provision banking regulatory authority for its approval. Where the shareholding of a shareholder, in the absence of prior approval of the banking regulatory authority, reaches or exceeds five percent of the total shares of our Bank (hereinafter referred to as excess shares ), before obtaining the approval of the banking regulatory authority, the shareholder who holds excess shares shall be subject to necessary restrictions when exercising the rights of shareholder as set out in Article 57 of these Articles in respect of such excess shares, including (but not limited to): 1. no voting rights shall be conferred on such excess shares when voting in the shareholders general meeting of our Bank (including voting by class shareholders) ; 2. the right to nominate candidates for Directors and supervisors as set out in our Articles of Association shall not be conferred on such excess shares. If the shareholder fails to obtain the approval of the banking regulatory authority in relation to the holding of excess shareholders, the shareholder shall have the excess shares transferred. Amended Provision banking regulatory authority for its approval. Where the shareholding of a shareholder, in the absence of prior approval of the banking regulatory authority, reaches or exceeds five percent of the total shares of our Bank (hereinafter referred to as excess shares ), before obtaining the approval of the banking regulatory authority, the shareholder who holds excess shares shall be subject to necessary restrictions when exercising the rights of shareholder as set out in Article 57 of these Articles in respect of such excess shares, including (but not limited to): 1. no voting rights shall be conferred on such excess shares when voting in the shareholders general meeting of our Bank (including voting by class shareholders); 2. the right to nominate candidates for Directors and supervisors as set out in our Articles of Association shall not be conferred on such excess shares. If the shareholder fails to obtain the approval of the banking regulatory authority in relation to the holding of excess shareholders, the shareholder shall have the excess shares transferred.... Investors, together with their related parties and persons acting in concert, who intend to hold for the first time or increase by in aggregate, jointly or severally, more than 5% of total capital or total shares of the Bank, should seek prior consideration of the Bank s Board of Directors, then report for approval of banking regulatory authorities. 11

14 LETTER FROM THE BOARD Existing Provision Amended Provision Investors, together with their related parties and persons acting in concert, who hold, jointly or severally, more than 1% but less than 5% of total capital or total shares of the Bank, should report to relevant banking regulatory authority within ten working days after obtaining their equities. Shareholders who should have sought approval of or reported to but failed to seek approval of or report to relevant regulatory authorities shall not exercise rights to request to convene a general meeting, vote, nominate, propose, dispose etc.; (7) not to abuse the rights of shareholders to damage the interests of the Bank or other shareholders; not to abuse the independent legal person status or limited liability of shareholders to damage the interests of the Bank s creditors; where the Bank s shareholders abuse the rights of shareholders to damage the interests of the Bank or other shareholders, they shall assume liability for compensation; where the Bank s shareholders abuse the independent legal person status or limited liability of shareholders to avoid debts, or cause a material damage to the interests of the Bank s creditors, such shareholders shall be jointly and severally liable for the Bank s debts; (7) not to abuse the rights of shareholders to damage the interests of the Bank or other shareholders; not to abuse the independent legal person status or limited liability of shareholders to damage the interests of the Bank s creditors; where the Bank s shareholders abuse the rights of shareholders to damage the interests of the Bank or other shareholders, they shall assume liability for compensation; where the Bank s shareholders abuse the independent legal person status or limited liability of shareholders to avoid debts, or cause a material damage to the interests of the Bank s creditors, such shareholders shall be jointly and severally liable for the Bank s debts. For shareholders who have made false statements, abused their rights of shareholders or acted to damage the interests of the Bank, a banking regulatory authority may restrict or prohibit relatedparty transactions between the Bank and them, limit their shareholding in the Bank and their amount of mortgaged equities, and their rights to request to convene a general meeting, vote, nominate, propose, dispose etc

15 LETTER FROM THE BOARD Article 63 Existing Provision The substantial shareholders of the Bank shall notify equity management department of the Bank and make submissions to the Board of Directors for filing within five working days if any of the following events occur... Amended Provision The substantial shareholders of the Bank shall not transfer their equities within five years from the date on which they obtain the equities (other than such circumstances as banking regulatory authorities approving them to take steps to control risks or ordering them to transfer their equities, or their equities being subject to law enforcement, or their equities being transferred between entities under the control of the same investor), shall notify equity management department of the Bank and make submissions to the Board of Directors for filing within five working days if any of the following events occur... Article 64 The shareholders, in particular the substantial shareholders, shall protect the interests and reputation of the Bank, and support the Bank in operating in compliance with the laws. The shareholders shall support the formulation of reasonable capital planning by the Board of Directors, such that the Bank may continuously meet the regulatory requirements. The substantial shareholders shall undertake in writing to supplement the Bank s capital on a long-term basis, which forms a part of the Bank s capital planning. The shareholders, in particular the substantial shareholders, shall protect the interests and reputation of the Bank, and support the Bank in operating in compliance with the laws. The shareholders shall support the formulation of reasonable capital planning by the Board of Directors, such that the Bank may continuously meet the regulatory requirements. The substantial shareholders shall replenish the Bank s capital when necessary and undertake in writing to supplement the Bank s capital on a long-term basis, which forms a part of the Bank s capital planning. Article 320 Paragraph 3 Substantial shareholders means the shareholder who can directly, indirectly, or jointly hold or control more than 5% of the shares or voting rights of the Bank and have a significant impact upon the decision-making of the Bank. Substantial shareholders means the shareholder who can directly, indirectly, or jointly hold or control more than 5% of the shares or voting rights of the Bank and have a significant impact upon the decisionmaking of the Bank are shareholders who hold or control more than 5% of the shares or voting rights of the Bank or who hold less than 5% of total capital or total shares, which exerts a significant impact on the operation and management of the Bank. The significant impact above includes but not limited to appointing directors, supervisors or senior management to the Bank, affecting through an agreement or in other ways, the decision-making of finance, operation and management of the Bank, and other circumstances affirmed by banking regulatory authorities. 13

16 LETTER FROM THE BOARD Save for the above proposed amendments, other chapters and articles of the Articles of Association remain unchanged. The above proposed amendments to the Articles of Association are subject to the approval by the CBRC Tianjin Office after being considered and approved at the AGM. 9. Proposed Amendments to the Procedural Rules for the Board of Directors of the Bank In accordance with the proposed amendments to the Articles of Association, the Bank has proposed certain amendments to the procedural rules for the Board. The details of the proposed amendments to procedural rules for the Board are set out in Appendix V to this circular, which have been approved by the Board and are subject to approval as an ordinary resolution at the AGM. 10. Proposed Amendments to the Procedural Rules for the Board of Supervisors of the Bank In order to further standardize the operation of the Board of Supervisors of the Bank, the Bank has proposed certain amendments to the procedural rules for the Board of Supervisors. The details of the proposed amendments to procedural rules for the Board of Supervisors are set out in Appendix VI to this circular, which have been approved by the Board of Supervisors and are subject to approval as an ordinary resolution at the AGM. 11. Proposed Amendments to the Administrative Measures on Remuneration for Directors and Supervisors of the Bank In order to further standardize the job allowance system for directors and supervisors, according to the Articles of Association, with reference to the practices of our peers, the Bank has proposed certain amendments to the Administrative Measures on Allowance for Directors and Supervisors of Bank of Tianjin Co., Ltd. ( ). The details of the proposed amendments to the Administrative Measures on Allowance for Directors and Supervisors of Bank of Tianjin Co., Ltd. ( ) are set out in Appendix VII to this circular, which have been approved by the Board and are subject to approval as an ordinary resolution at the AGM. 14

17 LETTER FROM THE BOARD 12. Re-appointment of external auditors for 2018 An ordinary resolution will be proposed at the 2017 AGM to consider and, where appropriate, approve the re-appointment of Deloitte Touche Tohmatsu Certified Public Accountants LLP as the domestic auditor of the Bank for the year 2018, and the re-appointment of Deloitte Touche Tohmatsu as the international auditor of the Bank for the year 2018, to hold office until the conclusion of the next annual general meeting of the Bank. The audit fees for the domestic and international financial statement for 2018 and the review fee for the international half-yearly financial statements are expected to be approximately RMB4.4 million. III. OTHERS In addition, the Shareholders will listen to the Appraisal Report on the Performance of Duties by Directors, Supervisors and Senior Management of the Bank for 2017 and Work Report of independent non-executive Directors for 2017 at the 2017 AGM. IV. THE AGM The AGM will be held at Geneva Hotel (No. 32 Youyi Road, Hexi District, Tianjin, PRC) at 9:30 a.m. on Friday, May 11, 2018 to consider and, if thought fit, to pass resolutions in respect of the matters as set out in the notice of the AGM. A proxy form and a reply slip will be dispatched to the Shareholders in accordance with the Hong Kong Listing Rules on Tuesday, March 27, The notice of the AGM is set out on pages 60 to 64 of this circular. Whether or not you intend to attend and/or vote at the AGM, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon. If you intend to attend the AGM in person or by proxy, holders of H Shares are required to complete and return the reply slip in person, by post or by facsimile to the H Share Registrar on or before Saturday, April 21, Completion and return of a proxy form will not preclude you from attending in person and voting at the AGM if you so wish and completion and return of the reply slip do not affect the right of a Shareholder to attend and vote at the respective meeting. V. RECOMMENDATIONS The Board of Directors (including the independent non-executive Directors) considers that all resolutions to be proposed at the AGM are in the best interests of the Bank and its Shareholders as a whole. Accordingly, the Board of Directors recommends that the Shareholders vote in favour of all the resolutions to be proposed at the AGM. 15

18 LETTER FROM THE BOARD VI. ADDITIONAL INFORMATION Your attention is drawn to the additional information set out in Appendices I to VII to this circular. By order of the Board Bank of Tianjin Co., Ltd. LI Zongtang Chairman Tianjin, China March 27, 2018 * Bank of Tianjin Co., Ltd. is not an authorised institution within the meaning of the Banking Ordinance (Chapter 155 of the Laws of Hong Kong), not subject to the supervision of the Hong Kong Monetary Authority, and not authorised to carry on banking/deposit-taking business in Hong Kong. 16

19 APPENDIX I WORK REPORT OF THE BOARD OF DIRECTORS OF BANK OF TIANJIN FOR ANNUAL REPORT OF THE BOARD OF DIRECTORS OF BANK OF TIANJIN CO., LTD. In 2017, the Board conscientiously fulfilled the duties under the Articles of Association, diligently performed it in an active and motivated manner for expansion and innovation with stable operation. It completed the established tasks of the Board well and continued to promote the Bank s reform, development and sound management. The report of the Board of Directors is set forth hereunder: I. Review of business operations in 2017 In 2017, the international economic and financial situation was complicated while the domestic economy showed a trend to be stable with financial supervision became increasingly strict. Under such new development situation, the Bank s overall operations remained stable with solid promotion of reforms and innovations and gradual improvement in internal control mechanism, as well as obvious effectiveness of risk management and better control over asset quality. The effectiveness, quality, and extensive coordinated development were all remained in good momentum. As of the end of 2017, the Group held total assets of RMB701.9 billion, an increase of RMB44.6 billion or 6.78% from the beginning of the year. Total liabilities amounted to RMB657.2 billion, a year-on-year increase of RMB41.6 billion or 6.76%. Total loan balance was RMB241.6 billion, a year-on-year increase of RMB33.7 billion or 16.21%. In addition, through active adjustment of the liability structure, total deposit balance amounted to RMB357.9 billion, a year-on-year decrease of RMB7.6 billion. The Group achieved a net profit of RMB3.94 billion. As for major regulatory indicators, the non-performing loan ratio of the Bank was 1.50%, while the provision coverage ratio was %, the capital adequacy ratio was 10.74%, the liquidity ratio was 35.41%, all of which fulfilled the regulatory requirements. We ranked 199th in the Top 1,000 World Banks for 2017 published by the Banker, a UK publication, moving up by 12 places as compared with last year. According to the Global Banking 500 (by Brand Value) published by Brand Finance (a famous UK-based brand rating institution), we ranked 223rd, moving up by 149 places as compared with last year. Our credit rating was raised by the United Credit Rating Co., Ltd. to AAA grade, which was the highest credit rating of domestic commercial banks. Besides, the Bank was also honored with titles such as the 2017 Outstanding City Commercial Bank (2017 ), Top Ten City Commercial Bank of the Year ( ), Growth Excellence Award of the Year ( ), Best Listed Company ( ), Most Potential Listed Company ( ) and 2017 Top List of Prudent Small and Medium Banks in China (2017 ), 2017 Best Mobile Banking of Regional Commercial Banks (2017 ) and 2017 Outstanding City Commercial Bank in Financial Information Registration of National Banking (2017 ), etc. 17

20 APPENDIX I WORK REPORT OF THE BOARD OF DIRECTORS OF BANK OF TIANJIN FOR 2017 II. Work of the Board of Directors In 2017, the Board strictly complied with the Articles of Association and regulatory requirements to continuously strengthen the establishment of work functions and grasp in depth the development opportunities, with compliant scientific decisions in accordance with the laws, so as to successfully complete the established work plan. (I) Improvement of corporate governance structure and system 1. Completion of incorporating party construction into the Articles of Association. In 2017, in order to fully implement the requirements of the Central Government and the Municipal Party Committee to incorporate party construction materials into the Articles of Association, the Board of the Bank actively and steadily promoted the revision of the Articles of Association. After taking seriously in investigation and research, coupled with opinions from Hong Kong lawyers and domestic lawyers, as well as on the basis of several rounds of ample communication with the Municipal Bureau of Finance, the Municipal State-owned Assets Supervision and Administration Commission and the Organization Department of Municipal Party committee, the first draft for the revised Articles of Association came out. At the same time, we actively promoted ample communication with a number of shareholders to gain understanding and support from the majority of shareholders. Eventually, the resolution for revising the Articles of Association was passed in high proportion in the shareholders general meeting, with 99.97% favour from both domestic and foreign shareholders attending the meeting. 2. Improvement of system construction in corporate governance. In 2017, the Bank collated and reexamined the system of the Board of Directors and the Board of Supervisors in accordance with relevant regulatory requirements with inspection and rectification to further standardized the corporate governance system at the level of the Board of Directors and the Board of Supervisors through means such as introduction and revision, under which a total of 41 areas in various systems was accumulatively updated or improved, covering all types of risk management, working rules, remuneration, finance and other basic systems for the General Meeting, the Board of Directors, the Board of Supervisors and senior management. 3. Improvement and standardization of corporate governance of subsidiaries. In order to guide the healthy development of subsidiaries, we established the management department for village and county banks of Xinjiang and Ningxia to provide guidance and supplementary guidance for Bank of Tianjin Financial Leasing and Jinhui county banks. We also optimized the governance structure of subsidiaries to ensure that directors and supervisors nominated by the Bank take up the majority in their board of directors and the board of supervisors, so that the Bank as the initiator and the largest shareholder had guarantee in its control over them. 18

21 APPENDIX I WORK REPORT OF THE BOARD OF DIRECTORS OF BANK OF TIANJIN FOR 2017 (II) Stable development in integrated operations 1. Completion of the additional investment and share expansion, and equity reform of Bank of Tianjin Financial Leasing Co., Ltd. In 2017, the registered capital of Bank of Tianjin Financial Leasing Co., Ltd. increased from RMB1 billion to RMB1.7 billion, of which the Bank held 1.12 billion shares, accounting for 65.88%, while Tianjin Port (Group) Co., Ltd. held 560 million shares, accounting for 32.94%, and Tianjin Tiandy Digital Technology Co., Ltd. held 20 million shares, accounting for 1.18%. After more than a year of steady development, various business operations of Bank of Tianjin Financial Leasing Co., Ltd. have shown promising development trends. 2. The subsidiary of investment-loan linkage advanced as scheduled. As one of the pilot banks in investment-loan linkage, the Bank of Tianjin Kechuang Investment Co., Ltd., ( ) which is a subsidiary of the Bank for investment-loan linkage, has completed its preliminary preparation with business entered experimenting exploration stage and official licensed operation is pending for administrative approval of the regulatory authorities. 3. All village banks in Xinjiang and Ningxia were opened. In 2017, Xinjiang Fukang Jinhui County Bank Company and Xinjiang Tacheng Jinhui County Bank Company were opened for business, marking the realization of opening up all the 7 county banks initiated by the Bank in Xinjiang and Ningxia since 2016, under which all businesses have been in orderly operation. (III) Fully exerting function in governance and decision-making The Board of the Bank effectively exercised the functions of decision-making and supervision to safeguard the interests of all shareholders and the Bank in accordance with relevant laws and regulations, the Articles of Association of the Bank and the Rules of Procedure for the Board of Directors and under authorization in shareholders general meeting. In 2017, a total of 7 meetings were held, in which 58 proposals were discussed and passed as resolutions of the meeting, and 15 reports were reviewed and listened. A total of 3 general shareholders meetings were convened, with 15 proposals discussed and passed as the resolutions, and 3 reports were reviewed. 1. Promoting implementation of the long-term development plan of the Bank. We promoted the mid-term evaluation of the Bank s 13th Five-Year Plan development strategic plan, reviewed and approved the 2017 Organization Development Plan, Capital Supplementary Plan ( ), 2017 Tier-two Capital Bond Issuance Scheme, 2017 Financial Bond Issuance Scheme, additional investment in Bank of Tianjin Financial Leasing Co., Ltd., Construction Plan for Disaster Recovery Centers in Wuqing, etc., so as to establish a solid foundation for long-term and stable development. 19

22 APPENDIX I WORK REPORT OF THE BOARD OF DIRECTORS OF BANK OF TIANJIN FOR Strengthening supervision and management over major business administrative issues Annual Report, 2016 Annual Results Report, 2017 Business Operation Plan, 2017 Annual Financial Budget, 2017 Organization Development Plan and other resolutions were reviewed and passed. We provided guidance and supervision on material issues such as the Bank s annual financial budget, annual business plan, profit distribution, related party transactions to fully play the role of the Board as the core body for decision-making. 3. Continuously monitoring and tracking of risk management. The resolutions such as Comprehensive Risk Management System, 2017 Risk appetite and Revision of Market Risk Management Policies were reviewed and passed to further strengthened the construction of the Bank s risk measurement system and effectively enhanced risk management and control of the Bank. We listened to quarterly risk management reports, financial liquidity risk management reports, credit business risk investigation reports, and structural investment business reports, etc. from the senior management on a quarterly basis. The Board offered guidance in accordance with various risk issues and pushed forward their implementation. 4. Strengthening regulation and management on related party (connected) transactions. The Board reviewed and approved revised version of the Related Transactions Management Rules and the senior management formulated Detailed Rules for Implementation of Related Transactions Management, so as to further established a healthy and comprehensive organization for related party (connected) transaction management, achieve clear division of responsibilities, establish identified standards for related parties, related persons and related party (connected) transactions, standardize approval and filing procedures for related party transactions, improve the regular monitoring and reporting mechanism and regulate disclosure of related party transactions. We supervised and urged the senior management to strengthen the related party (connected) transaction system construction, and design electronic information system covering relevant areas of related party transactions on the basis of learning from research and development cases in similar systems and advanced management experience of the peers in the same industry, so as to achieve electronic approval process of related party transactions and technically prevent any risk loopholes in related party (connected) transactions. At present, the system has completed the process of project verification and demand confirmation. We strengthened the management on related party (connected) transactions of the major shareholders, under which the material related party transactions of Tianjin Port Free Trade Zone Investment Holdings Co., Ltd. was reviewed and approved. As of the end of 2017, the balance of related party transactions of the Bank was RMB2.416 billion, accounting for 4.54% of the net capital, all of which were from credit business and interbank borrowings. In 2017, related party transactions did not cause any loss and interests of shareholders and overall interests of the Bank were protected. 20