Reach New Height Shenzhen Development Bank 2010 First Half Report Release 2010.08
SDB At a Glance Financial Results Business Achievements Looking Ahead 1
SDB At a Glance 2
SDB At a Glance Integrity Professionalism Service Efficiency Shenzhen Development Bank ( SDB ) was founded in Shenzhen China 1987, listed in Shenzhen Stock Exchange (Code: 000001) Closing stock price was 17.51 Yuan as of 29th June 2010. SDB provides a broad range of services to commercial, retail, and government customers, through 303 branches and outlets in 20 major cities across China at end of June 2010. Total employees were 15,449. Ping An Insurance Group completed the transfer of all SDB shares owned by Newbridge Asia AIV III, L.P. in May 2010, and Ping An Life subscribed more SDB shares through completion of the Non Public Offering in June 2010. Now Ping An and its related parties, as SDB s biggest shareholder, hold 29.99% of SDB total shares. (RMB mm, %) 2010/6/30 Total Assets 624,398 Total Loans 373,625 Total Deposits 505,988 Non Performing Loan Ratio 0.61% (RMB mm, %) Jan.-Jun. 2010 Operating Income 8,496 Net profit 3,033 Annualized ROAE 26% 3
2010 1H Results Highlights Compared with 1H 2009 Operating Income 8,496 mm yuan 13% Net Profit 3,033 mm yuan 31% Basic EPS 0.98 yuan 31% Compared with 2009 year end Total Assets 624.4bn yuan 6% General Loans excl bills 353.3 bn yuan 12% Total Deposits 506.0 bn yuan 11% Shareholders Equity 30.4bn yuan 49% NPL Ratio 0.61% -7 bp Provision Coverage Ratio 224% 62 pct points BVPS 8.73 yuan 32% 4
Financial Results 5
2010 Jan-Jun Income Statement Summary (RMB mm, %) Jan-Jun 2010 Jan-Jun 2009 Change YOY % Net Interest Income 7,409 6,364 16% Net Fee Revenue 750 478 57% Other non interest income 337 649-48% Operating income 8,496 7,491 13% Expenses (excl. biz tax) 3,591 2,943 22% Business tax 607 522 16% Profit before provision 4,299 4,026 7% Provisions 494 1,104-55% Before tax profit 3,872 2,929 32% Net profit 3,033 2,311 31% 6
2010 Jan-Jun Income Statement Summary (RMB yuan, %, ) Jan-Jun 2010 Jan-Jun 2009 Change YOY %, Pct points Basic EPS 0.98 0.74 31% Diluted EPS 0.98 0.74 31% Cost income ratio (excl. biz tax) 42% 39% 3 pct points Income tax rate 22% 21% 1 pct points Annualized ROAA 1.00% 0.92% 8 bp Annualized ROAE 26% 25% 1pct points 7
2010 Apr-Jun Income Statement Summary (RMB mm, %, ) Apr-Jun 2010 Jan-Mar 2010 Apr-Jun 2009 Change from 1Q 2010 % Net Interest Income 3,799 3,610 3,065 5% Net Fee Revenue 432 318 282 36% Other non interest income 181 156 384 16% Operating income 4,412 4,084 3,731 8% Expenses (excl. biz tax) 1,905 1,685 1,478 13% Business tax 322 285 263 13% Profit before provision 2,185 2,114 1,990 3% Provisions 375 119 582 215% Before tax profit 1,875 1,997 1,412-6% Net profit 1,455 1,578 1,189-8% 8
2010 Jan-Jun Net Interest Income & Margin Net Interest Income (RMB mm, %) Net Interest Margin, Loan Deposit Spread Note: Effects of rate cuts on declining NIM have now been fully reflected on the balance sheet, and the spread has maintained stable since last quarter. 9
2010 Quarterly Net Interest Income & Margin Net Interest Income (RMB mm, %) Net Interest Margin, Loan Deposit Spread Note: Effects of rate cuts on declining NIM have now been fully reflected on the balance sheet, and the spread has maintained stable since last quarter. 10
2010 Jan-Jun Average Daily Balance and Spread AIEA Yield on AIEA AIBL Cost on AIBL (RMB mm, %) ADB General Loans Loan Yield ADB Deposits Deposits Cost 11
2010 Quarterly Average Daily Balance and Spread AIEA Yield on AIEA AIBL Cost on AIBL (RMB mm, %) ADB General Loans Loan Yield ADB Deposits Deposits Cost 12
2010 Jan-Jun Asset Average Daily Balance, Yield Jan-Jun 2010 Jan-Jun 2009 Jan-Jun 2010 vs Jan-Jun 2009 (RMB mm, %, bp) ADB Yield ADB Yield ADB Yield General loans 336,001 5.31% 256,716 5.93% 31% -62 bp -Corporate loans 233,435 5.37% 179,377 5.76% 30% -39 bp - Retail Loans 102,566 5.16% 77,339 6.33% 33% -117 bp Bonds 92,391 2.74% 80,096 3.35% 15% -61 bp Placement at central bank 55,666 1.35% 38,970 1.54% 43% -19 bp Bill&IB 117,415 2.83% 134,499 2.37% -13% 46 bp AIEA 607,381 4.04% 510,281 4.25% 19% -21 bp 13
2010 Jan-Jun Liability Average Daily Balance, Cost Jan-Jun 2010 Jan-Jun 2009 Jan-Jun 2010 vs Jan-Jun 2009 (RMB mm, %, bp) ADB Cost ADB Cost ADB Cost Total Deposits 473,939 1.51% 400,406 1.88% 18% -37 bp - Corporate Deposits 279,138 1.56% 208,298 1.81% 34% -25 bp - Guarantee Deposits 122,007 1.34% 127,829 1.86% -5% -52 bp - Retail Deposits 72,794 1.58% 64,278 2.16% 13% -58 bp Bonds 9,466 5.86% 8,221 5.92% 15% -6 bp IB 99,149 1.92% 83,964 1.02% 18% 90 bp AIBL 584,541 1.65% 492,590 1.80% 19% -15 bp 14
2010 Apr-Jun Asset Average Daily Balance, Yield Apr-Jun 2010 Jan-Mar 2010 Apr-Jun 2010 vs Jan-Mar 2010 (RMB mm, %, bp) ADB Yield ADB Yield ADB Yield General loans 341,826 5.37% 330,112 5.25% 4% 12 bp -Corporate loans 237,107 5.46% 229,721 5.28% 3% 18 bp - Retail Loans 104,718 5.16% 100,391 5.17% 4% -1 bp Bonds 94,690 2.68% 90,066 2.81% 5% -13 bp Placement at central bank 58,174 1.20% 53,130 1.51% 9% -31 bp Bill&IB 111,000 2.99% 123,902 2.68% -10% 31 bp AIEA 609,993 4.11% 604,739 3.98% 1% 13bp 15
2010 Apr-Jun Liability Average Daily Balance, Cost Apr-Jun 2010 Jan-Mar 2010 Apr-Jun 2010 vs Jan-Mar 2010 (RMB mm, %, bp) ADB Cost ADB Cost ADB Cost Total Deposits 484,810 1.53% 462,947 1.48% 5% 5 bp - Corporate Deposits 286,411 1.60% 271,784 1.52% 5% 8 bp - Guarantee Deposits 123,685 1.35% 120,312 1.33% 3% 2 bp - Retail Deposits 74,714 1.58% 70,851 1.57% 5% 1 bp Bonds 9,466 5.79% 9,465 5.93% 0% -14 bp IB 92,320 1.99% 106,054 1.86% -13% 13 bp AIBL 587,847 1.67% 581,199 1.62% 1% 5 bp 16
2010 Jan-Jun Net Fee and Commission Income Realized 57% Growth YoY ( RMB mm,% ) Jan-Jun 2010 Jan-Jun 2009 Change YOY% Bank Card Fee Income 338 168 102% Settlement Fee Income 230 182 27% Consultant Fee Income Brokerage & Trust Fee Income Other Income Total Fee & Commission Expenses Total Net Fee & Commission Income 126 101 25% 57 31 85% 113 88 28% 115 92 25% 750 478 57% 17
2010/6/30 Key Balance Sheet Items (RMB mm, % ) 30 th Jun 2010 31 st Dec 2009 30 th Jun 2009 Change from end 09 Change from end 09,% Total Assets 624,398 587,811 541,226 36,587 6% Total loans (incl. bills) 373,625 359,517 342,346 14,108 4% Gen Loans 353,277 314,232 273,855 39,405 12% Bills 20,348 45,285 68,491-24,937-55% Total Liabilities 593,977 567,341 523,238 26,636 5% Total deposits 505,988 454,635 416,572 51,353 11% Shareholders Equity 30,421 20,470 17,987 9,951 49% BVPS(RMB yuan) 8.73 6.59 5.79 2.14 32% 18
General Loans & Growth General loans (RMB mm, %) + 29% YOY Growth + 12% YTD Growth 353,277 273,855 314,232 19
Deposits & Growth Total Deposits (RMB mm, %) Total Deposits (Daily Average) (RMB mm, %) 416,572 454,635 505,988 400,406 412,393 473,939 20 + 18% YOY Growth + 15% YTD Growth + 21% YOY Growth + 11% YTD Growth
Geo Distribution of Loans & Deposits Total loans (by Geography, %) Total Deposits (by Geography, %) 21
CAR CCAR RWA CAR CCAR RWA (RMB mm) Net Core Capital (RMB mm) 15% YTD Growth 50% YTD Growth 22
Asset Quality (RMB mm, %) 30 th Jun 2010 31 st Dec 2009 31 st Dec 2008 Change from end 2009 % Normal 370,404 355,717 278,120 4% Special Mention 929 1,356 3,694-32% Total NPL 2,292 2,444 1,928-6% - Sub Standard 1,294 1,474 1,928-12% - Doubtful 600 529 -- 14% - Loss 398 441 -- -10% Credit Provision 5,136 3,955 2,027 30% Provision Coverage Ratio 224% 162% 105% 62 pct points 23
Asset Quality Total NPL (RMB mm,%) NPL ratio (%) Special Mention / Total Loan (%) Very low among listed banks Very low among listed banks 24
Loans by Industries & Credit Quality (%) 30 th Jun 2010 NPL ratio % 31 st Dec 2009 NPL ratio % Manufacturing (Light industry) 19.2% 1.00% 16.7% 1.35% Service, technology, culture and sanitary industries 13.8% 0.06% 14.6% 0.04% Commercial 12.0% 1.76% 10.0% 2.13% Real estate 6.5% 1.82% 6.5% 1.48% Transportation,storage and communication 5.4% 0.00% 4.8% 0.34% Retail loans 29.7% 0.26% 27.7% 0.39% Bills 5.4% 0.00% 12.6% 0.00% Others* 8.0% 0.09% 7.1% 0.22% Note: 1.Real estate development loan balance was 14.1 billion yuan, accounting to 3.76% of total loans; by end of June 2010, NPL balance in real estate development loans was 191 million yuan, and the NPL ratio was 1.36%; All NPLs are loans initially made before 2005; New loans made since 2005 were kept in good quality, and the NPL balance was 0%. 2.Others includes: agriculture, husbandry and fisheries, Extraction (Heavy industry), Energy,and Construction. 25
2010 1H NPL Migration (RMB mm,%) From 2009/12/31 to 2010/6/30 NPLs at 2009/12/31 2,444 + Net downgrades before write-off & collections + 575 - Write-off -115 - Collections of NPLs - 612 = Net increase in NPLs = -152 Net downgrades as of total loans 0.15% NPLs at 30 th Jun 2010 2,292 NPL Ratio at 30 th Jun 2010 0.61% Note: In the first half year of 2010, the Bank totally collected NPA (including loans with & without written-off) of 1,679 million yuan, including principal collection of 1,458 million yuan. Among the credit assets principal, 846 million yuan was written-off loan principal, and 612 million yuan was collected from NPL principal which have not been written off. 26
2010 1H Asset Impairment Provisioning (RMB mm) From 2009/12/31 to 2010/6/30 Asset Provisions at 2009/12/31 3,955 + Provision for loans + 461 - Provision for Non-loans -9 - Write-offs -115 + Collections of Written-off loans + 846 -Others -2 = Ending Asset Provisions 2010/06/30 = 5,136 27
Asset Quality Corporate Loans 30 th Jun 2010 31 st Dec 2009 Change from end 2009 % (RMB mm, %, bp) Amount NPL% Amount NPL% NPL Corporate Loan (excl. credit card receivable) 265,229 0.76% 261,876 0.78% - 2 bp - General Loan 244,881 0.82% 216,591 0.95% -13 bp - Bills 20,348 0.00% 45,285 0.00% -- Trade Finance 145,434 0.35% 122,621 0.37% -2 bp 28
Asset Quality Retail Loans 30 th Jun 2010 31 st Dec 2009 Change from end 2009 % (RMB mm, %, bp) Amount NPL% Amount NPL% NPL Retail Loan(excl. credit card receivable) 102,319 0.21% 92,888 0.33% -12 bp -Mortgage 61,328 0.19% 59,399 0.34% -15 bp - Business Loans 13,278 0.36% 11,193 0.52% -16 bp - Car Loan 8,404 0.18% 6,453 0.18% 0 bp -Others 19,309 0.18% 15,842 0.25% -7 bp - Credit Card Receivable * 6,077 1.23% 4,753 1.68% -45 bp * The number is including retail and corporate credit card receivable. 29
Business Achievements 30
2010 1H Commercial Business General Commercial Loan (RMB mm, %) Corporate Deposits (RMB mm, %) 31 + 22% YoY Growth + 11% YTD Growth + 29% YoY Growth + 13% YTD Growth
2010 1H Commercial Business Total trade finance (RMB mm, %) Client No. of Trade Finance (number, %) Trade finance (by Geography),%) + 19% + 17% 32
2010 1H Commercial Business (RMB mm, %) 30 th Jun 2010 % 31 st Dec 2009 % change% Domestic trade finance 135,024 92.8% 115,134 93.9% 17% International trade finance 10,410 7.2% 7,487 6.1% 39% Total trade finance 145,434 100% 122,621 100% 19% Client No. of Trade Finance 6,704 -- 5,738 -- 17% 33
2010 1H Commercial Business To enhance SDB integrated marketing capacity, based on innovated products and advanced business. Online SCF system made smooth progress It was launched and operated in some auto manufacturers, dealers and warehouses in auto sections, e.g. Shanghai General Motors, BMW Brilliance Automotive, Beijing Hyundai Motor, etc. The system linkage with core corporation in other sections like household electrical appliances, steel, and foodstuff was in the implementing process. To continuously innovate and spread e-settlement products Expand basic customer group, and increase settlement deposit. At present, Direct linkage cash management system was launched in many large scale group enterprises. Signed project cooperative agreements with nearly 60 domestic commodities market on Transaction Fund Supervision system. To enhance the marketing management to SME According to the principle of Group-Strategy, by making applicable selling strategy and supporting policy to target SME customers, to implement batch marketing and to smart selling. SCF brand was awarded one of the China Financial Service Top 10 Brands in The 7 th Customer Satisfaction Research on China Market Brand, and The Best SCF Bank in The 4 th China (Suzhou) International Logistics and Supply Chain Cooperation and Development Forum. 34
2010 1H Retail Business Retail Loans (excl C/C) (RMB mm, %) Retail Business Loans Home Mortgage Loan Car Loan 35 + 29% YOY Growth + 10% YTD Growth + 25% YOY Growth + 19% YTD Growth + 94% YOY Growth + 30% YTD Growth + 22% YOY Growth + 3% YTD Growth
2010 1H Retail Business Credit Card Credit Card Receivable (RMB mm, %) No. of Credit Card (Thousand, %) + 45% YOY Growth + 28% YTD Growth + 23% YOY Growth + 8% YTD Growth Wealth Management 1. 1. Bank Bank WM WM products products Sales Sales 33.7 33.7 bn bn yuan, yuan, 427% 427% up up YOY YOY 2. 2. Fund Fund Sales Sales-- 1,890mn 1,890mn yuan, yuan, 290% 290% YOY YOY Growth Growth 3. 3. Insurance Insurance Sales Sales 950mn 950mn yuan, yuan, 280% 280% YOY YOY Growth Growth 36
2010/6/30 Retail Business Comprehensively accelerate the retail expending, series of measures being developed and implemented. Boost the comprehensive retail growth. Increase the clients dependence to SDB. Fully accelerated the built of the integrated sales system on the basis of the specialized operations. Improve the ability of raising retail deposit and managing valuable customers. Our financial products Jucaibao and Jinwawa were awarded Best Comprehensive Service Brand and Best Creative New Brand from 2009 Reliable Banking Financial Top 10 Products. 37
Looking Ahead 38
2010 Second Half year Key Initiatives Operations and IT System Upgrade Active Balance Sheet Management Corporate Banking E Supply Chain Finance &SME Retail Banking Primary or Secondary Bank for Customers Explore constructively with PA new biz opportunities together Keep improve management processes and training 39
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Thank You! IR Contact :ir@sdb.com.cn 41