Bank of Communications Co., Ltd.

Transcription

1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement. Bank of Communications Co., Ltd. (A joint stock company incorporated in the People s Republic of China with limited liability) (Stock Code: 03328, 4605 (Preference Share)) RESULTS ANNOUNCEMENT FOR THIRD QUARTER 2018 The Board of Directors of Bank of Communications Co., Ltd. (the Bank ) is pleased to announce the unaudited consolidated financial information (the Third Quarter Results ) of the Bank and its subsidiaries (the Group ) for the nine months ended 30 September 2018 (the Reporting Period ), which has been prepared in accordance with the International Accounting Standard ( IAS ) 34 Interim Financial Reporting issued by the International Accounting Standards Board. The Board of Directors of the Bank and the Audit Committee of the Board of Directors have reviewed and confirmed the Third Quarter Results. This announcement is made pursuant to Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and Rule of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. I. CORPORATE INFORMATION Stock name Stock code Stock exchange A Share Bank of Communications Shanghai Stock Exchange H Share BANKCOMM The Stock Exchange of Hong Kong Limited Domestic Preference Share BOCOM PREF Shanghai Stock Exchange Overseas Preference Share BOCOM 15USDPREF 4605 The Stock Exchange of Hong Kong Limited Secretary of the Board of Directors/Company Secretary Name Contact address Gu Sheng No.188, Yin Cheng Zhong Road, China (Shanghai) Pilot Free Trade Zone, Shanghai, P.R. China Tel 86 (21) investor@bankcomm.com - 1 -

2 II. FINANCIAL HIGHLIGHTS The Group adopted new accounting standards of financial instruments from 1 January According to new standards of the transitional provisions, the Group elected not to restate comparative figures. Any adjustments to the carrying amounts at the date of transition were recognised in the opening retained earnings and other reserves. For the related impact, please refer to the 2018 Interim Report published on the HKEx News website of The Stock Exchange of Hong Kong Limited (the Hong Kong Stock Exchange ). As at the end of the Reporting Period, the key financial data and financial indicators of the third quarter prepared by the Group in accordance with International Financial Reporting Standards ( IFRSs ) are as follows: Key financial data (in millions of RMB unless otherwise stated) 30 September 31 December Increase/ decrease (%) Total assets 9,391,537 9,038, Loans and advances to customers 1 4,852,048 4,579, Total liabilities 8,702,452 8,361, Due to customers 1 5,705,985 5,545, Shareholders equity (attributable to holders of the Bank) 682, , Net assets per (attributable to holders of the Bank, in RMB yuan) Key financial data January to September 2018 January to September 2017 Increase/ decrease (%) Profit before tax 66,527 65, Net profit (attributable to holders of the Bank) 57,304 54, Basic and diluted earnings per (attributable to holders of the Bank, in RMB yuan) Key financial indicators (%) January to September 2018 January to September 2017 Difference (percentage point) Return on average assets (annualized) Return on average holders equity (annualized)

3 Notes: 1. Due to changes in the presentation basis on the items in financial statements, the comparative data of the corresponding periods has been restated to the current presentation basis. Same applies hereinafter. 2. Refers to holder s equity attributable to holders of the Bank after the deduction of other equity instruments divided by the total issued ordinary s as at the end of the Reporting Period. 3. Excluding the impact of s. III. SHAREHOLDERS INFORMATION (1) Numbers of Ordinary Shareholders and Shareholdings of Top 10 Ordinary Shareholders as at the end of the Reporting Period Total Number of Ordinary Shareholders The Bank has a total of 354,454 ordinary holders, including 319,317 holders holding A s and 35,137 holders holding H s. Name of holders (full name) Shareholdings of Top 10 Ordinary Shareholders Number of s Shares pledged held as at the end or frozen of the Reporting Percentage Status of Number of Class Period () (%) s s of s Nature of holders The Ministry of Finance of the 15,148,693, Nil A Share The State People s Republic of China 4,553,999, Nil H Share HKSCC Nominees Limited 14,958,159, Unknown H Share Foreign legal person The Hong Kong and Shanghai Banking Corporation Limited 13,886,417, Nil H Share Foreign legal person The National Council for Social 1,877,513, Nil A Share The State Security Fund 1,405,555, Nil H Share China Securities Finance Corporation Limited 2,220,456, Nil A Share State-owned legal person Capital Airport Holding Company 1,246,591, Nil A Share State-owned legal person Shanghai Haiyan Investment Management Co., Ltd. 808,145, Nil A Share State-owned legal person Wutongshu Investment Platform Co., Ltd. 794,557, Nil A Share State-owned legal person Yunnan Hehe (Group) Co., Ltd. 745,305, Nil A Share State-owned legal person China FAW Group Corporation 663,941, Nil A Share State-owned legal person Details of holders with restored voting right and holdings During the Reporting Period, there was no restoration of voting rights for s

4 Notes: 1. All ordinary s issued by the Bank are not subject to any sales restrictions. 2. Shanghai Haiyan Investment Management Co., Ltd. and Yunnan Hehe (Group) Co., Ltd. are parties acting in concert under Provisional Measures on Equity Management of Commercial Banks. The Bank is not aware of any existence of associated relationship among other Top 10 holders or those acting in concert under Provisional Measures on Equity Management of Commercial Banks. 3. The aggregate number of s held by the nominee, HKSCC Nominees Limited, represents the total number of H s of the Bank held by all institutional and individual investors who maintained the accounts with it as at the end of the Reporting Period. 4. According to the Bank s register of members, as at the end of the Reporting Period, the Hong Kong and Shanghai Banking Corporation Limited ( HSBC ) held 13,886,417,698 H s of the Bank. In addition, according to the disclosure of interests forms filed with the Hong Kong Stock Exchange by HSBC Holdings plc, HSBC beneficially held 14,135,636,613 H s of the Bank as at the end of the Reporting Period, representing 19.03% of the Bank s total ordinary s issued. 5. According to the Bank s register of members, as at the end of the Reporting Period, the National Council for Social Security Fund (the SSF ) held 1,877,513,451 A Shares and 1,405,555,555 H Shares. According to the information provided by the SFF to the Bank, as at the end of the Reporting Period, other than the holdings recorded in the register of members of the Bank, the SSF held additional 7,639,273,777 H s of the Bank, of which 7,027,777,777 H s were registered under HKSCC Nominees Limited and 611,496,000 H s were indirectly held by certain asset manager (including Hong Kong Stock Connect). As at the end of the Reporting Period, the SSF held a total of 10,922,342,783 A s and H s of the Bank, representing 14.71% of the Bank s total ordinary s issued. (2) Number of Preference Shareholders and Shareholdings of Top 10 Preference Shareholders as at the end of the Reporting Period Total number of overseas holders 1 Top 10 Overseas Preference Shareholdings Number of s held as at the end Shares pledged or frozen of the Reporting Percentage Class Status of Number Name of holder (full name) Period () (%) of s s of s Nature of holder DB Nominees (Hong Kong) Limited 122,500, Overseas Unknown Foreign legal person - 4 -

5 Notes: 1. All overseas s issued by the Bank are not subject to any sales restrictions. 2. Shareholdings of overseas holders are summarized according to the Bank s register of members of overseas holders. 3. DB Nominees (Hong Kong) Limited, as a trustee, held 122,500,000 overseas s, accounting for 100% of the Bank s total overseas s, on behalf of all assignees in clearing systems of Euroclear and Clearstream as at the end of the Reporting Period. 4. Percentage refers to the percentage of the number of overseas s held by overseas holders to the total number of overseas s. 5. The Bank is not aware of any existence of related relationship among the overseas holders and Top 10 ordinary holders, or those acting in concert. Total number of domestic holders 42 Name of holder (full name) Top 10 Domestic Preference Shareholdings Number of s Shares pledged held as at the end or frozen of the Reporting Percentage Class Status of Number Period () (%) of s s of s Nature of holders China Mobile Communications Corporation AXA SPDB Investment Managers SPDB Shanghai Pudong Development Bank Shanghai Branch CCB Trust Co., Ltd. Qian Yuan Ri Xin Yue Yi open-ended wealth management unit fund trust Truvalue Asset Management CMB China Merchants Bank Co., Ltd. Bosera Funds ICBC Bosera ICBC Flexible allocation No. 5 Specific Multi-customer Asset Management Plan Wisdom Asset Management Ping An Bank Ping An Bank Co., Ltd. 100,000, Domestic 20,000, Domestic 20,000, Domestic 20,000, Domestic 20,000, Domestic 20,000, Domestic Nil State-owned legal person Nil Others Nil Others Nil Others Nil Others Nil Others - 5 -

6 Top 10 Domestic Preference Shareholdings Number of s held as at the end Shares pledged or frozen Name of holder of the Reporting Percentage Class Status of Number Nature of (full name) Period () (%) of s s of s holders China Ping An Life Insurance Co., Ltd. Self-owned capital 18,000, Domestic Nil Others China National Tobacco Corporation Henan Company China Life Property & Casualty Insurance Company Limited Traditional General Insurance Product China CITIC Bank Corporation Limited CITIC Le Ying wealth management series Notes: 15,000, Domestic 15,000, Domestic 14,000, Domestic Nil State-owned legal person Nil Others Nil Others 1. All domestic s issued by the Bank are not subject to any sales restrictions. 2. Shareholdings of domestic holders are summarized according to the Bank s register of members of domestic holders. 3. Percentage refers to the percentage of the number of domestic s held by domestic holders to the total number of domestic s. 4. The Bank is not aware of any existence of related relationship among Top 10 domestic holders, and Top 10 ordinary holders, or those acting in concert. IV. MANAGEMENT DISCUSSION AND ANALYSIS (1) Business Review During the first three quarters of 2018, the Group proactively dealt with the complicated and challenging external business environment, based on BoCom Strategy, continuously promoted the comprehensive deepening reform, adhered to the principle of high quality development and value creation, focused on serving the real economy, and strictly prevented and controlled financial risks to achieve stable performance of main business and operation with good momentum. As at the end of the Reporting Period, the total assets of the Group increased by 3.91% from the end of last year to RMB9, billion; the total liabilities increased by 4.07% from the end of last year to RMB8, billion; holders equity (attributable to holders of the - 6 -

7 Bank) increased by 1.69% from the end of last year to RMB billion. During the Reporting Period, the net operating income increased by 5.14% on a year-on-year basis to RMB billion; the net profit (attributable to the Bank) increased by 5.30% on a year-on-year basis to RMB billion; the annualized return on average assets (ROAA) and the annualized return on average holders equity (ROAE) increased by 0.02 percentage points and 0.52 percentage points from last year to 0.83% and 11.96%, respectively. (2) Financial Statement Analysis 1. Analysis on Key Income Statement Items 1.1 Net interest income During the Reporting Period, the net interest income of the Group reached RMB billion, representing an increase of RMB2.270 billion or 2.44% on a year-on-year basis, which accounted for 60.19% of the net operating income. During the Reporting Period, the net interest margin of the Group decreased by 3 basis points on a year-on-year basis to 1.47%. 1.2 Net fee and commission income During the Reporting Period, the net fee and commission income of the Group reached RMB billion, representing an increase of RMB0.785 billion or 2.56% on a year-on-year basis. The net fee and commission income accounted for 19.85% of the net operating income, representing a year-on-year decrease of 0.50 percentage points. 1.3 Operating costs During the Reporting Period, the Group s operating costs increased by RMB3.358 billion or 7.60% on a year-on-year basis to RMB billion, while the Group s cost-to-income ratio was 31.49%, representing a year-onyear increase of 1.00 percentage points. 1.4 Credit impairment losses on loans and advances to customers During the Reporting Period, the Group s credit impairment losses on loans and advances to customers increased by RMB7.160 billion or 33.12% on a year-on-year basis to RMB billion

8 2. Analysis on Key Balance Sheet Items 2.1 Loans and advances to customers As at the end of the Reporting Period, the Group s total loans and advances to customers were RMB4, billion, representing an increase of RMB billion or 5.96% from the end of last year, of which the balance of corporate loans increased by RMB billion or 2.40% from the end of last year to RMB3, billion; the balance of individual loans increased by RMB billion or 13.94% from the end of last year to RMB1, billion. 2.2 Due to customers As at the end of the Reporting Period, the Group s balance of due to customers increased by RMB billion or 2.90% from the end of last year to RMB5, billion, of which the proportion of due to corporate customers accounted for 69.08%, representing a decrease of 0.46 percentage points from the end of last year. The proportion of due to individual customers was 30.89%, representing an increase of 0.49 percentage points from the end of last year. The proportion of demand deposits decreased by 2.53 percentage points from the end of last year to 42.70%, while the proportion of time deposits increased by 2.56 percentage points from the end of last year to 57.27%. 2.3 Investment securities As at the end of the Reporting Period, the Group s net balance of investment securities increased by RMB billion or 9.97% from the end of last year to RMB2, billion. 2.4 Asset quality As at the end of the Reporting Period, the Group s impaired loans balance increased by RMB3.774 billion from the end of last year to RMB billion; the impaired loans ratio decreased by 0.01 percentage point from the end of last year to 1.49%. The provision coverage ratio of impaired loans increased by percentage points from the end of the last year to %. The provision ratio increased by 0.24 percentage points from the end of last year to 2.55%

9 (3) Capital Adequacy Ratio The Group calculated the capital adequacy ratios pursuant to the Administrative Measures for the Capital of Commercial Banks (Trial Implementation) issued by China Banking and Insurance Regulatory Commission ( CBIRC ) and the relevant requirements. Since the adoption of the Advanced Approach of Capital Management upon the first approval from CBIRC in 2014, the Bank steadily implemented and applied it in accordance with the regulatory requirements. Pursuant to the Administrative Measures for the Capital of Commercial Bank (Trial Implementation), the Bank met the conditions of completing the parallel period. Upon the approval of CBIRC, the Bank expands the application scope of the Advanced Approach and ends the parallel run period. By the end of September 2018, the Group s capital adequacy ratio, Tier 1 Capital adequacy ratio and core Tire 1 Capital ratio were 14.08%, 11.93% and 10.87% respectively, which all met the regulatory requirements. Calculated pursuant to the Administrative Measures for the Capital of Commercial Banks (Trial Implementation) issued by CBIRC notes (in millions of RMB unless otherwise stated) Item The Group The Bank Net Core Tier 1 Capital 619, ,223 Net Tier 1 Capital 679, ,099 Net Capital 801, ,067 Core Tier 1 Capital adequacy ratio (%) Tier 1 Capital adequacy ratio (%) Capital adequacy ratio (%) Notes: (1) Pursuant to the Administrative Measures for the Capital of Commercial Banks (Trial Implementation), the above calculation excluded BoCom Insurance and BoCommLife Insurance. (2) According to capital adequacy ratio calculated by adopting the Advanced Approach of Capital Management, the credit risk was assessed by the internal rating based approach, the market risk by the internal models approach and the operational risk by the standardised approach. Calculated pursuant to the Administrative Measures for the Capital Adequacy Ratio of Commercial Banks issued by CBIRC and relevant requirements Item The Group The Bank Core Capital Adequacy Ratio (%) Capital adequacy ratio (%)

10 (4) Leverage Ratio The Group calculated the leverage ratio pursuant to the Measures for the Administration of the Leverage Ratio of Commercial Banks (Revised) issued by CBIRC in January As at 30 September 2018, the Group s leverage ratio was 6.73%, which met the regulatory requirements. Calculated pursuant to the Measures for the Administration of the Leverage Ratio of Commercial Banks (Revised) (2015, No. 1) issued by CBIRC Item 30 September 2018 (in millions of RMB unless otherwise stated) 30 June 31 March 31 December Net Tier 1 Capital 679, , , ,429 Adjusted on-and-offbalance sheet assets 10,095,931 10,026,128 10,010,549 9,731,368 Leverage ratio (%) (5) Liquidity Coverage Ratio According to the Measures for Disclosure of Liquidity Coverage Ratio of Commercial Banks, commercial banks should disclose the daily average liquidity coverage ratio within the quarter since The daily average liquidity coverage ratio of the Group in the third quarter of 2018 was % (the daily average within the quarter is the simple arithmetic average of daily data of the quarter, the number of daily data on which the average is based is 92). The ratio decreased slightly by 0.9 percentage points from the last quarter mainly due to the decrease of qualified high-quality liquid assets. The details of average of liquidity coverage ratio and specific items thereof in the third quarter are listed as follows:

11 Serial Number (in millions of RMB unless otherwise stated) Amount before Amount after conversion conversion The qualified high-quality liquid assets 1 The qualified high-quality liquid assets 1,468,098 Cash Outflows 2 Retail deposits, small business deposits, 1,389, ,565 including: 3 Stable deposit 145,015 7,079 4 Less stable deposit 1,244, ,486 5 Unsecured wholesale funding, including: 3,844,302 1,642,661 6 Business relationship deposit (excluding 2,373, ,039 agency business) 7 Non-business relationship deposit (including 1,466,643 1,046,423 all counterparties) 8 Unsecured debts 4,199 4,199 9 Secured funding 11, Other items, including: 1,433, , Cash outflow related to derivatives and other 600, ,926 collateral/pledged assets 12 Cash outflow related to loss of funding on asset-blocked securities 13 Committed credit and liquidity facilities 832,735 47, Other contractual obligation to extend funds 44,524 44, Contingent funding obligations 981,580 31, Total expected cash outflows 2,505,565 Cash Inflow 17 Secured lending (including reverse repos and 56,782 55,890 securities borrowing) 18 Inflows from fully performing exposure 734, , Other cash inflows 632, , Total expected cash inflows 1,423,640 1,169,881 Amount after adjustment 21 The qualified high-quality liquid assets 1,468, Net cash outflows 1,335, Liquidity Coverage Ratio (%)

12 V. FINANCIAL STATEMENTS (1) Unaudited Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income (All amounts expressed in millions of RMB unless otherwise stated) Three months ended 30 September Nine months ended 30 September Interest income 89,392 79, , ,424 Interest expense (54,875) (48,274) (164,763) (139,519) Net interest income 34,517 31,572 95,175 92,905 Fee and commission income 11,134 10,191 33,880 33,236 Fee and commission expense (923) (844) (2,487) (2,628) Net fee and commission income 10,211 9,347 31,393 30,608 Net gains arising from trading activities 6, ,286 2,102 Net gains arising from financial investments ,739 Net gains/(losses) on derecognition of financial assets measured at amortised cost (132) N.A. (115) N.A. Share of profits of associates and joint venture 27 (14) Insurance business income 1,411 1,700 5,533 12,468 Other operating income 3,897 3,218 11,538 9,526 Credit impairment losses on loans and advances to customers (13,579) (6,816) (28,781) (21,621) Insurance business expense (1,339) (1,729) (5,062) (11,591) Other operating expenses (22,114) (19,319) (57,752) (51,237) Profit before tax 19,057 18,581 66,527 65,936 Income tax (2,378) (3,011) (8,854) (11,144) Net profit for the period 16,679 15,570 57,673 54,

13 (All amounts expressed in millions of RMB unless otherwise stated) Three months ended 30 September Nine months ended 30 September Other comprehensive income Items that may be reclassified subsequently to profit or loss: Debt instruments at fair value through other comprehensive income Net gains recorded in equity 618 N.A. 2,076 N.A. Net gains reclassified from equity to profit or loss (49) N.A. (45) N.A. Available-for-sale financial assets Changes in fair value recorded in equity N.A. 85 N.A. 46 Changes in fair value reclassified from equity to profit or loss N.A. (42) N.A. (1,831) Net gains/(losses) arising from cash flow hedge Changes in fair value recorded in equity Changes in fair value reclassified from equity to profit or loss (254) 6 (313) 74 Others Translation difference on foreign operations 1,929 (589) 2,273 (1,172) 2,532 (490) 4,368 (2,831) Items that will not be reclassified subsequently to profit or loss: Net gains on equity investments designated at fair value through other comprehensive income (134) N.A. 27 N.A. Actuarial gains/(losses) on pension benefits (1) 15 (16) 35 Change in fair value attributable to change in the credit risk of financial liabilities at fair value through profit or loss (46) N.A. (40) N.A

14 Three months ended 30 September Nine months ended 30 September Other comprehensive income for the period 2,351 (475) 4,339 (2,796) Comprehensive income for the period 19,030 15,095 62,012 51,996 Net profit attributable to: Shareholders of the Bank 16,533 15,444 57,304 54,419 Non-controlling interests ,679 15,570 57,673 54,792 Total comprehensive income attributable to: Shareholders of the Bank 18,805 14,998 61,518 51,670 Non-controlling interests ,030 15,095 62,012 51,996 Basic and diluted earnings per for profit attributable to the holders of the Bank (in RMB yuan)

15 (2) Unaudited Condensed Consolidated Interim Statement of Financial Position (All amounts expressed in millions of RMB unless otherwise stated) As at As at 30 September 31 December ASSETS Cash and balances with central banks 862, ,571 Due from banks and other financial institutions 708, ,468 Financial assets at fair value through profit or loss 356, ,037 Loans and advances to customers 4,725,194 4,473,255 Financial investments fair value through other comprehensive income 447,027 N.A. Financial investments available-for-sale N.A. 402,138 Financial investments amortised cost 2,004,175 N.A. Financial investments loans and receivables N.A. 387,733 Financial investments held-to-maturity N.A. 1,511,375 Investment in associates and joint venture 3,581 3,357 Property and equipment 147, ,492 Deferred income tax assets 24,627 16,456 Other assets 112, ,372 Total assets 9,391,537 9,038,254 LIABILITIES Due to banks and other financial institutions 2,093,784 2,106,192 Financial liabilities at fair value through profit or loss 51,766 60,308 Due to customers 5,705,985 5,545,366 Certificates of deposits issued 297, ,482 Current tax liabilities 4,866 7,943 Deferred income tax liabilities Debt securities issued 303, ,662 Other liabilities 244, ,510 Total liabilities 8,702,452 8,361,983 EQUITY Share capital 74,263 74,263 Preference s 59,876 59,876 Capital surplus 113, ,663 Other reserves 314, ,827 Retained earnings 120, ,514 Equity attributable to holders of the bank 682, ,143 Non-controlling interests 6,627 5,128 Total equity 689, ,271 Total equity and liabilities 9,391,537 9,038,

16 (3) Unaudited Condensed Consolidated Interim Statement of Cash Flows (All amounts expressed in millions of RMB unless otherwise stated) Nine months ended 30 September Cash flows from operating activities: Profit before tax: 66,527 65,936 Adjustments for: Provision for impairment allowances on loans and advances to customers 28,781 21,621 Provision for/(reversal of) credit impairment of financial investments (689) 141 Provision for/(reversal of) credit impairment of other receivables Provision for/(reversal of) credit impairment of interest receivables 1,341 Provision for/(reversal of) impairment foreclosed assets Provision for/(reversal of) impairment allowance on repossessed assets (1) Provision for/(reversal of) insurance contracts reserve (198) 8,470 Depreciation and amortisation 7,562 6,830 Provision for/(reversal of) outstanding litigation and unsettled obligation 63 4 Net gains on disposal of property and equipment (19) (67) Net gains on disposal of foreclosed assets (9) Interest income from financial investments (63,360) (59,162) Unwind of discount on allowances during the period (1,353) (1,358) Fair value losses/(gains) (7,624) (77) Share of profit of associates and joint venture (167) (37) Net gains arising from financial investments (30) (2,739) Interest expense on debt securities issued 8,387 6,987 Operating cash flows before movements in operating assets and liabilities 39,883 46,685 Net decrease/(increase) in mandatory reserve deposits 62,974 (36,679) Net decrease/(increase) in due from banks and other financial institutions 53,742 (72,513) Net increase in financial assets at fair value through profit or loss (37,413) (15,113) Net increase in loans and advances to customers (312,784) (323,643) Net decrease/(increase) in other assets 16,463 (21,000) Net increase in due to banks and other financial institutions 134, ,147 Net decrease in financial liabilities at fair value through profit or loss (4,850) (17,108) Net increase in due to customers 160, ,290 Net increase in other liabilities 24,068 14,263 Net increase in value-added tax and surcharge payable Income tax paid (11,304) (8,913) Net cash flows from operating activities 126,288 28,

17 (All amounts expressed in millions of RMB unless otherwise stated) Nine months ended 30 September Cash flows from investing activities: Purchase of financial investments (766,393) (420,765) Disposal or redemption of financial investments 576, ,228 Dividends received Interest received from financial investments 62,814 61,917 Acquisition of intangible assets and other assets (320) (525) Disposal of intangible assets and other assets Purchase and construction of property and equipment (22,313) (18,254) Disposal of property and equipment Net cash used in investing activities (148,613) (113,456) Cash flows from financing activities: Cash received on debt securities issued 25,902 61,096 Cash payments for distribution of dividends, profits or interest expenses (24,149) (27,346) Capital contribution by non-controlling interests 1,125 1,969 Repayment of principals of debt securities and certificates of deposit issued (14,895) (28,906) Dividends paid to non-controlling interests (65) (18) Net cash flows from financing activities (12,082) 6,795 Effect of exchange rate changes on cash and cash equivalents 2,811 (4,611) Net increase/(decrease) in cash and cash equivalents (31,596) (82,603) Cash and cash equivalents at the beginning of the period 228, ,396 Cash and cash equivalents at the end of the period 197, ,793 Net cash flows from operating activities include: Interest received 192, ,425 Interest paid (144,454) (122,140)

18 VI. PUBLICATION OF THE THIRD QUARTER REPORT The results announcement will be simultaneously published on the website of the Hong Kong Stock Exchange at as well as the website of the Bank at for the reference of holders. The third quarter 2018 report prepared in accordance with China Accounting Standard for Business Enterprises will be available on the website of the Shanghai Stock Exchange at and the website of the Bank. Shanghai, the PRC 26 October 2018 By order of the Board Bank of Communications Co., Ltd. Peng Chun Chairman of the Board of Directors The Directors of the Bank as at the date of this announcement are Mr. Peng Chun, Mr. Ren Deqi, Mr. Wong Tung Shun, Peter*, Mr. Hou Weidong, Mr. Wang Taiyin*, Mr. Song Guobin*, Mr. He Zhaobin*, Ms. Wong Pik Kuen, Helen*, Mr. Liu Hanxing*, Mr. Luo Mingde*, Mr. Liu Haoyang*, Mr. Yu Yongshun #, Ms. Li Jian #, Mr. Liu Li #, Mr. Yeung Chi Wai, Jason #, Mr. Woo Chin Wan, Raymond #, and Mr. Cai Haoyi #. * Non-executive Directors # Independent Non-executive Directors