Overview In 3Q2016, against the backdrop of the complicated and changeable operating environment,ping An Bank(PAB) kept a stable development trend. Both its scale and profits maintained sound and steady growth. Rapid development of various business, smooth progress on reformation and transformation, continuous optimization of productivity as well as constant enhancement in risk compensation capabilities have laid solid foundations for achieving annual operation targets. 1
Contents Financial Summary 01 1.1 Earnings and Scale 1.2 Quality and Efficiency 1.3 Income and Expense 1.4 Regulatory Indicators Performance Highlights Business Initiatives for 4Q2016 02 03 2
1.1 Earnings and Scale (in RMB 100 mn) Jan - Sep 2016 Jan - Sep 2015 YOY Change Change % 1. Net Profit 187.19 177.40 9.79 5.52% 30 Sep 2016 31 Dec 2015 YTD Change Change % 2. Total Assets 27,912 25,071 2,841 11.3% Total Loans 14,545 12,642 1,903 15.1% Including: Loans and Advances 14,305 12,161 2,144 17.6% (1) Corporate Loans 9,484 7,750 1,734 22.4% (2) Retail Loans 3,118 2,934 184 6.3% (3) Credit Cards 1,703 1,477 226 15.3% 3. Total Liabilities 25,930 23,456 2,474 10.6% Total Deposits 23,884 21,231 2,653 12.5% Including: General Deposits 19,129 17,339 1,790 10.3% (1) Corporate Deposits 16,310 14,536 1,774 12.2% (2) Retail Deposits 2,819 2,803 16 0.6% 4. Shareholders Equity 1,982 1,615 367 22.7% 3
1.2 Quality and Efficiency (in RMB 100 mn) 30 Sep 2016 31 Dec 2015 YTD 1. Asset Quality NPL Balance 223.00 176.45 26.38% NPL Ratio 1.56% 1.45% +0.11 pp Provision Coverage Ratio 164.39% 165.86% -1.47pps Provision-to-Loan Ratio 2.56% 2.41% +0.15 pp 2. Return on Assets Jan - Sep 2016 2015 YoY Annualized Average Return on Total Assets 0.94% 0.93% +0.01 pp Annualized Weighted Average Return on Equity 14.45% 14.94% -0.49 pp 3. Net Interest Spread 2.62% 2.63% -0.01 pp 4. Net Interest Margin 2.73% 2.77% -0.04 pp 5. Cost/Income Ratio (Excluding Business Tax) 27.70% 31.31% -3.61 pps 4
1.3 Income and Expense (In RMB 100 mn) Jan - Sep 2016 YOY Amount % of Total Change Change % Change in % of Total 1. Operating Income 819.68 100% 108.16 15.20% Net Interest Income 545.63 66.57% 63.57 13.19% -1.18% Net Non-interest Income 274.05 33.43% 44.59 19.43% 1.18% Including: Net Fee Income 241.74 29.49% 39.51 19.54% 1.07% 2. Expense 258.08-21.04-7.54% Operating Expense 227.08 27.70% -1.58-0.69% -4.44% 3. Profit Before Provisions 561.60 129.20 29.88% 4. Less: Asset Impairment Loss 316.15 116.80 58.59% 5. Net Profit 187.19 9.79 5.52% 6. EPS (RMB) 1.09 0.03 2.83% 5
1.4 Regulatory Indicators (Unit: %) Benchmark 30 Sep 2016 31 Dec 2015 1. Capital Adequacy Capital Adequacy Ratio 10.5 11.97 10.94 Tier 1 Capital Adequacy Ratio 8.5 9.67 9.03 Core Tier 1 Capital Adequacy Ratio 7.5 8.64 9.03 2.Liquidity Liquidity Ratio 25 51.75 54.29 Loan-to-deposit Ratio N/A 73.12 69.01 Liquidity Coverage Ratio 80 (Current year) 96.36 140.82 Note: The Central Bank has implemented a Macro Prudential Assessment (MPA) regulatory requirement since 2016 to carry out multi-dimensional guidance and evaluation on financial institutions through a comprehensive indicator system. All PAB s critical indicators are in conformity with regulatory standards. 6
Contents Financial Summary Performance Highlights 01 02 2.1 Steady Growth in Deposits 2.2 Steady Growth in Loans 2.3 Improvement in Profitability 2.4 Further Structure Optimization 2.5 Continuous Efficiency Improvement 2.6 Accelerate Transformation and Innovation 2.7 Consolidate Development Foundation 2.8 Enhancement in Risk Control Business Initiatives for 4Q2016 03 7
2.1 Steady Growth in Deposits Industry-Leading Growth in Deposits Balance of Total Deposits (in RMB 100 mn) Total deposits kept steady growth in Q3, up by RMB 265.3 bn or 13% YTD. General deposits amounted to RMB 1.9 tn, up by RMB 179 bn or 10% YTD. 21,231 +13% 23,884 Growth of total deposits and general deposits ranked in the industry leading level. 2015 3Q2016 Steady Growth in Deposits Corporate, retail and non-deposit-taking FIs deposits increased by RMB 177.4 bn, RMB 1.6 bn and RMB 83.1 bn YTD, or 12%, 1% and 21%, respectively. Under the background of high pressure on retail deposit growth in Q3, PAB s retail deposits kept positive growth, ranking leading level in the industry. Balance of General Deposits (in RMB100 mn) 17,339 16% +10% 19,129 15% 84% 85% 2015 3Q2016 Corporate deposits Retail deposits 8
2.2 Steady Growth in Loans Maintain Sound Growth in Loans Total Loans (in RMB100 mn) Loans in Q3 maintained a sound growth 12,642 14,545 momentum with the balance of total loans up by RMB 190.3 bn or 15% YTD. +15% Balance of general loans up by RMB 214.4 bn or 18% YTD. 2015 3Q2016 Accelerated Growth in Retail Loans General Loans (in RMB100 mn) Excluding SME loans, corporate loans up by RMB 173.5 bn or 23% YTD; retail loans growth up significantly by RMB 30.2 bn. 12,161 8% 29% +18% 14,305 5% 29% SME loans kept decreasing by RMB 16.4 bn or 18%YTD. 63% 66% 2015 3Q2016 Corporate loans Retail loans SME Loans 9
2.3 Improvement in Profitability Operating Income (in RMB 100 mn) Profit before Provisions (in RMB 100 mn) 712 +15% 820 432 +30% 562 Jan-Sep 2015 Jan-Sep 2016 Jan-Sep 2015 Jan-Sep 2016 Provisions (in RMB 100 mn) Net Profit (in RMB 100 mn) 316 177 187 199 +59% +5.5% Jan-Sep 2015 Jan-Sep 2016 Jan-Sep 2015 Jan-Sep 2016 10
2.4 Further Structure Optimization Net Non-Interest Income (in RMB 100 mn) Promote Proportion of Non-Interest Income to Total 229 +19% 274 Rapid growth in income: net noninterest income increased RMB 4.5 bn or 19% YoY to RMB 27.4 bn. Rising proportion to total: net noninterest income as percentage of total reached to 33.4%, up by 2.1 pps as compared with last year. Jan-Sep 2015 Jan-Sep 2016 Non-Interest Income as % of Total Optimized income structure:fee incomes from bank cards, agency and 31.3% +2.1pps 33.4% trust, wealth management, and custody showed prominent growth. 2015 Jan-Sep 2016 11
2.5 Continuous Efficiency Improvement Industry-leading Interest Spreads NIS NIM Deposit-Loan Spread Under the background of the reform program to replace the business tax with VAT and interest marketization, interest spreads in the industry were generally under pressure. Excluding the impact of the reform program to replace the business tax with VAT, PAB s interest spreads maintained stable. Optimization of Productivities Cost-to-income ratio for Jan- Sep 2016 was 27.7%,drop by 3.6% and 4.4% as compared with last year and corresponding period of last year, respectively. 2.76% 2.67% 2.63% 2.62% 2015 1Q2016 1H2016 3Q2016 40.8% 2.87% 2.77% 2.79% 2.73% 2015 1Q2016 1H2016 3Q2016 Cost-to-Income Ratio 36.3% 31.3% 4.96% 4.89% 4.71% 4.56% 2015 1Q2016 1H2016 3Q2016 27.7% 2013 2014 2015 Jan-Sep 2016 12
Investment Banking Inter-bank Business Retail Business Corporate Business 2.6 Accelerate Transformation and Innovation Strategy Transformation: active progress on strategy transformation and prominent growth in business development. AUM:had wealth management customers of 328,500 and AUM amounted to RMB 760.7 bn at the end of Sep, up by 15% and 14% YTD, respectively. Internet Finance: mobile bank users accumulated to 17.21 mn at the end of Sep, up by 110% YTD; registered users of Orange Bank accumulated to 10.08 mn, up by 99% YTD. Credit card: balances of loans amounted to RMB 170.3 bn, up by 15% YTD; 6.5 mn cards were newly issued, up by 47% YoY; and the total transaction amounted to RMB 821.1 bn, up by 44% YoY. Model Innovation: building an integrated financial service platform featured with Trading bank+ and Investment bank+ and implementing C+SIE financial marketing model creatively. Internet Finance: the Orange-e-platform had a registered user base of 2.51 mn, facilitating sustainable development of transactions such as B2B E-commerce and industry chain finance efficiently. IOT Finance: push forward the strategic layout of IOT finance, improving business model and application context gradually. Offshore Finance: scale and effect of offshore investment and finance business kept increasing with offshore deposit of RMB 110.2 bn and offshore loan of RMB 86.7 bn at the end of the period. Custody: net value under custody amounted to RMB 5.21 Hang-E-Tong: continuous client coverage expansion, with tn at the end of Sep, up by 39% YTD. 1,315 cooperative clients and 800 new clients added in the Industry funds: conforming to national significant economic and industrial development strategy, actively year; the transaction amount reached to RMB 3.33 tn, of which RMB 2.62 tn derived from online transaction. supporting development of material economy and keeping Gold Bank: clients with gold account increased by 1.75 cooperation with government, industry leaders, listed mn YTD and active users amounted to 0.24 mn; gold companies and other quality clients to achieve sound account users totaled 3.18 mn, ranking in the leading level efficiency. of the industry. Asset securitization: successfully entered the Top 30 list Asset Management: AUM exceeded RMB 1 tn at the end of debt financing projects lead underwriters, and of Sep, up by 39% YTD. participated in a number of securitization projects as finance consultant. 13
2.7 Consolidate Development Foundation Smoothly Implement Capital Supplement The 20 bn preferred shares issued in private in March and the 10 bn Tier-2 Capital bonds issued in April are utilized for supplement other Tier-1 Capital and Tier-2 Capital respectively, to safeguard the development of our business. Enhanced Network Coverage In Jan-Sep 2016, PAB newly established 5 branches (Hefei, Taizhou, Mianyang, Huzhou, Rizhao), and the total outlets reached 1,042. Tianjin FTA Rizhao Luoyang Taizhou Among the branches in operation, Hefei, Taizhou, Huzhou, Changsha, Shaoxing, Luoyang, Tianjin FTA and Nansha FTA outperformed in terms of deposits at the date of opening. Mianyang Huzhou Hefei Shaoxing Changsha Nansha FTA 14
2.8 Enhancement in Risk Control Intensify clear up and dissolve Under the background of economic downturn and pressure on asset quality generally faced in the industry, PAB had cleared NPLs of RMB 3.8 bn in Jan-Sep 2016, and dissolved NPLs in various ways. Intensify provisioning efforts Provisions of RMB 31.6 bn were newly made in Jan-Sep 2016, up by RMB 11.7 bn or 59% YoY; balances of provision amounted to RMB 36.7 bn, up by RMB 7.4 bn or 25% YTD. The provision-to-loan ratio was 2.56% at the end of Sep, up by 15bps YTD, reflecting the risk compensation capability has further enhanced. NPL Ratio Provision-to-Loan Ratio Provision Coverage Ratio 166% 164% 2.41% 2.56% 1.45% 1.56% 2015 3Q2016 2015 3Q2016 2015 3Q2016 15
Contents Financial Summary 01 Performance Highlights 02 Business Initiatives for 4Q2016 03 16
Business Initiatives For 4Q2016 Preparing for a good beginning of 2017 Endeavor to propel retail transformation Propel reformation of BUs and Branches Explore new business growth opportunities Enhance risk management 17
Thank You