Outstanding Results, Quality Assets and Satisfactory Market Development, a New Page for Chong Hing Bank

On February 26, Chong Hing bank (Share Code: 01111) hosted the 2014 Annual Results Announcement, which was attended by Mr. Zhang Zhaoxing, Chairman of Yuexiu Group and Chong Hing Bank, and Ms. Margaret May Yee Ko Leung, Deputy Chairman and Managing Director of Chong Hing Bank.

Chong Hing Bank, at the first anniversary of her merger into Yuexiu Group, published a wonderful list of business achievements, i.e., substantial growth in operating results, well kept assets quality and satisfactory business development in China, and has won the admiration of the media and the capital market.

The key achievements in 2014 include:

1. The profit attributable to the owner’s capital, after deduction of the profit from the sale of Chong Hing Bank Center, is HKD793,000,000, 42% more than the previous year.
2. The return rate for the shareholders’ fund rises substantially by 195 basis points and reaches 9.35%.
3. The net interest margin increases from 1.52% in the first half of 2014 to 1.64% in the second half, broadening by 32 basis points by the year.
4. The total customer loans increase by 26% to HKD56,925,000,000, and the increase partly comes from the growth of cross-border financing and corporate lending.
5. The Bank has sufficient fund to support business growth and the total assets surpass for the first time the threshold of HKD100 billion and reaches HKD108 billion. The total assets increase by 27%, where the customer loans increase by 26%, the Bank’s short-term fund and deposit by 31% and the investment in securities by 19%. The net interest income increases by 35% over the previous year and reaches HKD1,372,000,000.
6. The Bank boasts of robust and healthy core business and finance, sound asset quality, low rate of impairment loans (0.04%) and high rate of provision coverage (1,086.76%). And the rate of restructured loan is 0.01%.
7. The opening of Guangzhou and Foshan sub-branches turns a new page in the development of inland business.
8. Combined with the mid-term cash dividend in September, 2014, which was HKD0.19 per share, the total dividend for 2014 is HKD0.6 per share (In 2013, the total dividend was HKD0.47 per share).

Ms. Margaret May Yee Ko Leung, Deputy Chairman and Managing Director of Chong Hing Bank, said: “Chong Hing Bank, thanks to the concerted efforts of all the staff, achieved satisfactory results in 2014. Through good assets and debts management, we have actively developed quality and high-reward customers and promoted cross-border businesses in inland, and under perfect risk management, have actively developed banking business in inland and effectively improved bank profits. The Bank’s business in Hong Kong has maintained stable development and the business expansion in domestic market has been satisfactory. Shantou Branch has successfully opened sub-branches in Guangzhou and Foshan and the deposit balance is satisfactory. Looking ahead, the Bank will develop both Hong Kong and inland markets, carry forward Chong Hing Bank’s long standing quality and professional services and conduct innovations in products, services and human resources. We will take advantage of the excellent service network, reliable customer relationship and the powerful industrial basis of Yuexiu Group, grasp the opportunity for financial services in the Pearl River Delta, and aim at more achievements in innovation and development for the Bank.

Mr. Zhang Zhaoxing, Chairman of Yuexiu Group and Chong Hing Bank, said: “Chong Hing Bank became a member of Yuexiu Group on February 14, 2014. The acquisition of Chong Hing Bank is the first time that a local state enterprise has purchased an overseas bank and the largest that Guangzhou has ever effected since the reform and opening-up drive, therefore, it’s of unique significance to Yuexiu Group’s development. Yuexiu Group now runs three major businesses of real estate, finance and construction of traffic infrastructure, and owns RMB300 billion in total assets. The banking business is a key point in Yuexiu Group’s future development strategy, and Chong Hing Bank will play a fundamental role in the Group’s business. Yuexiu Group will employ its vast resources to support Chong Hing Bank in the preparation of overall strategy, establishment of inland branches and development of quality customers in inland. When Chong Hing Bank needs to increase its capital in business development, Yuexiu Group will respond positively as the leading shareholder.

Chairman Zhang Zhaoxing said in the end: “Looking ahead, Chong Hing Bank will uphold the Group’s core tenet of “Surpass for excellence”, make full use of the opportunities under the CEPA framework as well as that for financial services in the Pearl River Delta, the rich resources in Guangdong and Hong Kong and the vigorous support of Yuexiu Group, and, while maintaining stable services, accelerate the construction of inland business network to upgrade cross-border comprehensive financial services, aim to become a competitive financial institution that headquarters in Hong Kong, operates in Guangzhou and other inland regions and exerts an influence over Asia-Pacific region, creating more value for shareholders”.