TIDMB052
RNS Number : 3132H
Agricultural Bank of China Lon Br
05 April 2022
Agricultural Bank of China Limited
(Incorporated in the People's Republic of China with Limited
Liability)
Auditor's Report and Consolidated Financial Statements
For the year ended 31 December 2021
Opinion
We have audited the consolidated financial statements of
Agricultural Bank of China Limited (the "Bank") and its
subsidiaries (the "Group") set out on pages 1 to 208, which
comprise: the consolidated statement of financial position as at 31
December 2021; the consolidated statement of profit or loss; the
consolidated statement of comprehensive income; the consolidated
statement of changes in equity and the consolidated statement of
cash flows for the year then ended and notes to the consolidated
financial statements, including a summary of significant accounting
policies.
In our opinion, the consolidated financial statements give a
true and fair view of the consolidated financial position of the
Group as at 31 December 2021, and of its consolidated financial
performance and its consolidated cash flows for the year then ended
in accordance with International Financial Reporting Standards
("IFRSs") issued by the International Accounting Standards Board
("IASB") and have been properly prepared in compliance with the
disclosure requirements of the Hong Kong Companies Ordinance.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing ("ISAs") issued by the IASB. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the consolidated
financial statements section of our report. We are independent of
the Group in accordance with the Code of Ethics for Professional
Accountants issued by the International Ethics Standards Board for
Accountants ("the Code"), together with any ethical requirements
that are relevant to our audit of the consolidated financial
statements in the People's Republic of China, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements and the Code. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these
matters.
Key audit matters (continued)
Measurement of expected credit losses for loans and advances to
customers
Refer to the accounting policy in "Note II 8.5 Impairment of financial
instruments, Note III 2 Measurement of the expected credit loss
allowance", and "Note IV 8 Credit impairment losses, Note IV 17
Loans and advances to customers, Note IV 44.1 Credit risk" to
the consolidated financial statements.
How the matter was addressed in
The Key Audit Matter our audit
The Group uses an expected credit Our audit procedures to assess
loss ("ECL") model to measure the ECL for loans and advances to customers
loss allowance for loans and advances included the following:
to customers in accordance with -- with the assistance of KPMG's
International Financial Reporting IT specialists, understanding and
Standard 9, Financial instruments. assessing the design, implementation
and operating effectiveness of
The determination of loss allowance key internal controls of financial
for loans and advances to customers reporting over the approval, recording
using the expected credit loss and monitoring of loans and advances
model is subject to the application to customers, the credit risk staging
of a number of key parameters and process and the measurement of
assumptions, including the credit ECL for loans and advances to customers.
risk staging, probability of default,
loss given default, exposures at -- with the assistance of KPMG's
default and discount rate, adjustments financial risk specialists, assessing
for forward-looking information the appropriateness of the ECL
and other adjustment factors. Extensive model in determining loss allowances
management judgment is involved and the appropriateness of the
in the selection of those parameters key parameters and assumptions
and the application of the assumptions. in the model, which included credit
risk staging, probability of default,
loss given default, exposure at
default, adjustments for forward-looking
information and other adjustments,
and assessing the appropriateness
of related key management judgment.
Key audit matters (continued)
Measurement of expected credit losses for loans and advances to
customers (continued)
Refer to the accounting policy in "Note II 8.5 Impairment of financial
instruments, Note III 2 Measurement of the expected credit loss
allowance", and "Note IV 8 Credit impairment losses, Note IV 17
Loans and advances to customers, Note IV 44.1 Credit risk" to
the consolidated financial statements.
How the matter was addressed in
The Key Audit Matter our audit
In particular, the determination -- for key parameters involving
of the loss allowance is heavily judgement, critically assessing
dependent on the external macro input parameters by seeking evidence
environment and the Group's internal from external sources and comparing
credit risk management strategy. to the Group's internal records
The ECL for corporate loans and including historical loss experience
advances are derived from estimates and type of collateral. As part
including the historical losses, of these procedures, we challenged
internal and external credit grading management's revisions to estimates
and other adjustment factors. The and input parameters by comparing
ECL for personal loans and advances with prior period and considered
are derived from estimates whereby the consistency of judgement.
management takes into consideration
historical overdue data, the historical -- comparing the macroeconomic
loss experience for personal loans forward- looking information used
and other adjustment factors. in the model with market information
to assess whether they were aligned
with market and economic development.
-- assessing the completeness and
accuracy of data used in the ECL
model. For key internal data, we
compared the total balance of the
loans and advances' list used by
management to assess the ECL with
the general ledger to check the
completeness of the data. We also
selected samples to compare individual
loan and advance information with
the underlying agreements and other
related documentation, to check
the accuracy of the data and samples
to check the accuracy of external
data by comparing them with public
resources.
Key audit matters (continued)
Measurement of expected credit losses for loans and advances to
customers (continued)
Refer to the accounting policy in "Note II 8.5 Impairment of financial
instruments, Note III 2 Measurement of the expected credit loss
allowance", and "Note IV 8 Credit impairment losses, Note IV 17
Loans and advances to customers, Note IV 44.1 Credit risk" to
the consolidated financial statements.
How the matter was addressed in
The Key Audit Matter our audit
Management also exercises judgement -- for key parameters used in the
in determining the quantum of loss ECL model which were derived from
given default based on a range system- generated internal data,
of factors. These include the financial assessing the accuracy of input
situation of the borrower, the data by comparing the input data
security type, the seniority of with original documents on a sample
the claim, the recoverable amount basis. In addition, we involved
of collateral, and other repayment KPMG's IT specialists to assess
sources of the borrower. Management the logics and compilation of the
refers to valuation reports of loans and advances' overdue information
collateral issued by qualified on a sample basis.
third party valuers and considers
the influence of various factors -- evaluating the reasonableness
including the market price, status of management's assessment on whether
and use when assessing the value the credit risk of the loan and
of collaterals. The enforceability, advance has, or has not, increased
timing and means of realisation significantly since initial recognition
of collateral can also have an and whether the loan and advance
impact on the recoverable amount is credit-impaired by selecting
of collateral. risk-based samples. We analysed
the portfolio by industry sector
to select samples in industries
more vulnerable to the current
economic situation with reference
to other borrowers with potential
credit risk. We checked loan overdue
information, making enquiries of
the credit managers about the borrowers'
business operations, checking borrowers'
financial information and researching
market information about borrowers'
businesses, to check the credit
risk status of the borrower, and
the reasonableness of the loans'
credit risk stage.
Key audit matters (continued)
Measurement of expected credit losses for loans and advances to
customers (continued)
Refer to the accounting policy in "Note II 8.5 Impairment of financial
instruments, Note III 2 Measurement of the expected credit loss
allowance", and "Note IV 8 Credit impairment losses, Note IV 17
Loans and advances to customers, Note IV 44.1 Credit risk" to
the consolidated financial statements.
How the matter was addressed in
The Key Audit Matter our audit
We identified the measurement of -- evaluating the reasonableness
ECL of loans and advances to customers of loss given default for selected
as a key audit matter because of samples of corporate loans and
the inherent uncertainty and management advances to customers that are
judgment involved and because of credit-impaired, by checking the
its significance to the financial financial situation of the borrower,
results and capital of the Group. the security type, the seniority
of the claim, the recoverable amount
of collateral, and other repayment
sources of the borrower. Evaluating
management's assessment of the
value of any collateral, by comparison
with evaluation result based on
the category, status, use of the
collateral and market prices. For
valuation reports of collateral
issued by qualified third party,
we evaluated the competence, professional
quality and objectivity of the
external appraiser. We also evaluated
the timing and means of realisation
of collateral, evaluated the forecast
cash flows, challenged the viability
of the Group's recovery plans;
based on the above work, we selected
samples and assessed the accuracy
of calculation for loans and advances'
credit losses by using the ECL
model.
Key audit matters (continued)
Measurement of expected credit losses for loans and advances to
customers (continued)
Refer to the accounting policy in "Note II 8.5 Impairment of financial
instruments, Note III 2 Measurement of the expected credit loss
allowance", and "Note IV 8 Credit impairment losses, Note IV 17
Loans and advances to customers, Note IV 44.1 Credit risk" to
the consolidated financial statements.
How the matter was addressed in
The Key Audit Matter our audit
-- performing retrospective review
of expected credit loss model components
and significant assumptions, to
back-test past estimates element
against actual outcomes, and assess
whether the results indicate possible
management bias on loss estimation.
-- assessing the reasonableness
of the disclosures in the financial
statements in relation to expected
credit losses for loans and advances
against prevailing accounting standards.
Key audit matters (continued)
Measurement of interests in and consolidation of structured entities
Refer to the accounting policy in "Note II 2 Consolidation, Note
III 5 Consolidation of structured entities", and "Note IV 41 Structured
entities" to the consolidated financial statements.
How the matter was addressed in
The Key Audit Matter our audit
Structured entities are generally Our audit procedures to assess
created to achieve a narrow and the measurement of interests in
well defined objective with restrictions and consolidation of structured
around their ongoing activities. entities included the following:
-- assessing the design, implementation
The Group may acquire an ownership and operating effectiveness of
interest in a structured entity, key internal controls of financial
through initiating, investing or reporting over measurement of interests
retaining shares in a Wealth Management in and consolidation of structured
Products ("WMPs"), securitization entities.
products, funds, trust investment
plans, debt investment plans and -- selecting significant structured
asset management plans. The Group entities of each key product type
may also retain partial interests and performing the following procedures:
in derecognised assets due to guarantees
or securitisation structures. - inspecting the related contracts,
internal establishment documents
and information disclosed to the
investors to understand the purpose
of the establishment of the structured
entity and the involvement the
Group has with the structured entity
and to assess management's judgment
over whether the Group has the
ability to exercise power over
the structured entity;
- inspecting the risk and reward
structure of the structured entity,
including any capital or return
guarantee, provision of liquidity
support, commission paid and distribution
of the returns, to assess management's
judgment as to the exposure, or
rights, to variable returns from
the Group's involvement in such
an entity;
Key audit matters (continued)
Measurement of interests in and consolidation of structured entities
(continued)
Refer to the accounting policy in "Note II 2 Consolidation, Note
III 5 Consolidation of structured entities", and "Note IV 41 Structured
entities" to the consolidated financial statements.
How the matter was addressed in
The Key Audit Matter our audit
In determining whether the Group - inspecting management's analysis
retain any partial interests in of the structured entity, including
a structured entity or should consolidate qualitative analysis and the calculation
a structured entity, management of the magnitude and variability
is required to consider the power associated with the Group's economic
it possesses, its exposure to variable interests in the structured entity,
returns, and its ability to use to assess management's judgment
its power to affect returns. These over the Group's ability to affect
factors are not purely quantitative its own returns from the structured
and need to be considered collectively entity;
in the overall substance of the
transactions. - assessing management's judgment
over whether the structured entity
We identified the recognition of should be consolidated or not.
interests in and consolidation -- assessing the reasonableness
of structured entities as a key of the disclosures in the financial
audit matter because of the complex statements in relation to the measurement
nature of certain of these structured of interests in and consolidation
entities and because of the judgment of structured entities against
exercised by management in the prevailing accounting standards.
qualitative assessment of the terms
and the nature of each entity.
Key audit matters (continued)
Measurement of financial instruments' fair value
Refer to the accounting policy in "Note II 8.3 Determination of
fair value, Note III 3 Fair value of financial instruments", and
"Note IV 46 Fair value of financial instruments" to the consolidated
financial statements.
The Key Audit Matter How the matter was addressed in
our audit
Financial instruments carried at Our audit procedures to assess
fair value account for a significant measurement of financial instruments'
part of the Group's assets and fair value included the following:
liabilities. The effect of fair
value adjustments of financial -- assessing the design, implementation
instruments may impact either the and operating effectiveness of
profit or loss or other comprehensive key internal controls of financial
income. reporting over the model building,
model validation, independent valuation
The valuation of the Group's financial and front office and back office
instruments, held at fair value, reconciliations for financial instruments.
is based on a combination of market
data and valuation models which -- assessing the level 1 fair value
often require a considerable number of financial instruments, on a
of inputs. Many of these inputs sample basis, by comparing the
are obtained from readily available fair value applied by the Group
data, in particular for level 1 with publicly available market
and level 2 financial instruments data.
in the fair value hierarchy, the
valuation models for which use
quoted market prices and observable
inputs, respectively. Where one
or more significant unobservable
inputs, such as credit risk, liquidity
and discount rate, are involved
in the valuation techniques, as
in the case of level 3 financial
instruments, then estimates need
to be developed which can involve
extensive management judgments.
Key audit matters (continued)
Measurement of financial instruments' fair value (continued)
Refer to the accounting policy in "Note II 8.3 Determination of
fair value, Note III 3 Fair value of financial instruments", and
"Note IV 46 Fair value of financial instruments" to the consolidated
financial statements.
How the matter was addressed in
The Key Audit Matter our audit
We identified measurement of financial -- for level 2 and level 3 financial
instruments' fair value as a key instruments, on a sample basis,
audit matter because of the assets involving KPMG's valuation specialists
and liabilities measured at fair to assess whether the valuation
value are material to the group method selected is appropriate
and the degree of complexity involved with reference to the prevailing
in the valuation techniques and accounting standards. Our procedures
the degree of judgment exercised included: developing parallel models,
by management in determining the obtaining inputs independently
inputs used in the valuation models. and verifying the inputs; assessing
the appropriate application of
fair value adjustment that form
an integral part of fair value,
by inquiring of management about
any changes in the fair value adjustment
methodologies and assessing the
appropriateness of the inputs applied;
and comparing our valuation results
with that of the Group.
-- assessing the reasonableness
of the disclosures in the consolidated
financial statements in relation
to fair value of financial instruments
against prevailing accounting standards,
including fair value hierarchy
information and sensitivity to
key inputs.
Information other than the consolidated financial statements and
auditor's report thereon
The directors are responsible for the other information. The
other information comprises all the information included in the
annual report other than the consolidated financial statements and
our auditor's report thereon.
Our opinion on the consolidated financial statements does not
cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is
materially inconsistent with the consolidated financial statements
or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this
regard.
Responsibilities of the directors for the consolidated financial
statements
The directors are responsible for the preparation of the
consolidated financial statements that give a true and fair view in
accordance with IFRSs issued by IASB and the disclosure
requirements of the Hong Kong Companies Ordinance, and for such
internal control as the directors determine is necessary to enable
the preparation of consolidated financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the
directors are responsible for assessing the Group's ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but
to do so.
The directors are assisted by the Audit Committee in discharging
their responsibilities for overseeing the Group's financial
reporting process.
Auditor's responsibilities for the audit of the consolidated
financial statements
Our objectives are to obtain reasonable assurance about whether
the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue
an auditor's report that includes our opinion. This report is made
solely to you, as a body, in accordance with section 405 of the
Hong Kong Companies Ordinance, and for no other purpose. We do not
assume responsibility towards or accept liability to any other
person for the contents of this report.
Auditor's responsibilities for the audit of the consolidated
financial statements (continued)
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs will
always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of
these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise
professional judgement and maintain professional scepticism
throughout the audit. We also:
l Identify and assess the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal
control.
l Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Group's internal control.
l Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures
made by the directors.
l Conclude on the appropriateness of the directors' use of the
going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group's
ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in
our auditor's report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor's report. However, future
events or conditions may cause the Group to cease to continue as a
going concern.
l Evaluate the overall presentation, structure and content of
the consolidated financial statements, including the disclosures,
and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair
presentation.
l Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for
our audit opinion.
Auditor's responsibilities for the audit of the consolidated
financial statements (continued)
We communicate with the Audit Committee regarding, among other
matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Audit Committee with a statement that we
have complied with relevant ethical requirements regarding
independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence
and, where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with the Audit Committee, we
determine those matters that were of most significance in the audit
of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in
our auditor's report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
The engagement partner on the audit resulting in this
independent auditor's report is Wong Yuen Shan.
KPMG
Certified Public Accountants
8th Floor, Prince's Building 10 Chater Road
Central, Hong Kong 30 March 2022
Consolidated statement of profit or loss for the year ended 31
December 2021
(Amounts in millions of Renminbi, unless otherwise stated)
Note Year ended 31 December
IV 2021 2020
Interest income 1 1,008,014 930,932
Interest expense 1 (430,027) (385,853)
Net interest income 1 577,987 545,079
Fee and commission income 2 98,721 91,166
Fee and commission expense 2 (18,392) (16,621)
Net fee and commission income 2 80,329 74,545
Net trading gain 3 14,241 16,405
Net gain/(loss) on financial investments 4 15,035 (7,312)
Net gain on derecognition of financial
assets measured at amortized cost 11 1
Other operating income 5 34,143 30,614
Operating income 721,746 659,332
Operating expenses 6 (260,275) (229,897)
Credit impairment losses 8 (165,886) (164,699)
Impairment losses on other assets (114) (204)
Operating profit 295,471 264,532
Share of results of associates and
joint ventures 409 518
Profit before tax 295,880 265,050
Income tax expense 9 (53,944) (48,650)
Profit for the year 241,936 216,400
Consolidated statement of profit or loss
for the year ended 31 December 2021 (continued)
(Amounts in millions of Renminbi, unless otherwise stated)
Note Year ended 31 December
IV 2021 2020
Attributable to:
Equity holders of the Bank 241,183 215,925
Non-controlling interests 753 475
241,936 216,400
Earnings per share attributable to the ordinary equity holders
of the Bank (expressed in
RMB yuan per share)
- Basic and diluted 11 0.65 0.59
The accompanying notes form an integral part of these
consolidated financial statements.
Consolidated statement of comprehensive income for the year
ended 31 December 2021
(Amounts in millions of Renminbi, unless otherwise stated)
Year ended 31 December
2021 2020
Profit for the year 241,936 216,400
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss:
Fair value changes on other debt instrument
investments at fair value through other
comprehensive income 8,504 (8,855)
Loss allowance on other debt instrument
investments at fair value through other
comprehensive income 3,572 3,754
Income tax impact for fair value changes
and loss allowance on other debt instrument
investments at fair value through other
comprehensive income (2,865) 1,440
Foreign currency translation differences (1,724) (2,591)
Subtotal 7,487 (6,252)
Items that will not be reclassified subsequently
to profit or loss:
Fair value changes on other equity investments
designated at fair value through
other comprehensive income (282) (114)
Income tax impact for fair value changes
on other equity investments designated
at fair value through other comprehensive
income 115 29
Subtotal (167) (85)
Other comprehensive income, net of tax 7,320 (6,337)
Total comprehensive income for the year 249,256 210,063
Consolidated statement of comprehensive income for the year
ended 31 December 2021 (continued)
(Amounts in millions of Renminbi, unless otherwise stated)
Year ended 31 December
2021 2020
Total comprehensive income attributable to:
Equity holders of the Bank 248,399 209,637
Non-controlling interests 857 426
249,256 210,063
The accompanying notes form an integral part of these
consolidated financial statements.
Consolidated statement of financial position as at 31 December
2021
(Amounts in millions of Renminbi, unless otherwise stated)
Note As at 31 December
IV 2021 2020
Assets
Cash and balances with central banks 12 2,321,406 2,437,275
Deposits with banks and other financial
institutions 13 218,500 434,185
Precious metals 96,504 87,357
Placements with and loans to banks
and other financial institutions 14 446,944 546,948
Derivative financial assets 15 21,978 61,937
Financial assets held under resale
agreements 16 837,637 816,206
Loans and advances to customers 17 16,454,503 14,552,433
Financial investments 18
Financial assets at fair value through
profit or
loss 460,241 583,069
Debt instrument investments at amortized
cost 6,372,522 5,684,220
Other debt instrument and other equity
investments at fair value through
other comprehensive income 1,397,280 1,555,370
Investment in associates and joint
ventures 20 8,297 8,865
Property and equipment 21 153,299 151,154
Goodwill 1,381 1,381
Deferred tax assets 22 143,027 133,355
Other assets 23 135,636 151,292
Total assets 29,069,155 27,205,047
Consolidated statement of financial position as at 31 December
2021 (continued)
(Amounts in millions of Renminbi, unless otherwise stated)
Note As at 31 December
IV 2021 2020
Liabilities
Borrowings from central banks 24 747,213 737,161
Deposits from banks and other financial
institutions 25 1,622,366 1,394,516
Placements from banks and other financial
institutions 26 291,105 390,660
Financial liabilities at fair value
through profit or
loss 27 15,860 27,817
Derivative financial liabilities 15 19,337 65,282
Financial assets sold under repurchase
agreements 28 36,033 109,195
Due to customers 29 21,907,127 20,372,901
Debt securities issued 30 1,507,657 1,371,845
Deferred tax liabilities 22 655 334
Other liabilities 31 500,443 524,590
Total liabilities 26,647,796 24,994,301
Consolidated statement of financial position as at 31 December
2021 (continued)
(Amounts in millions of Renminbi, unless otherwise stated)
Note As at 31 December
IV 2021 2020
Equity
Ordinary shares 32 349,983 349,983
Other equity instruments 33 359,872 319,875
Preference shares 79,899 79,899
Perpetual bonds 279,973 239,976
Capital reserve 34 173,556 173,556
Investment revaluation reserve 35 34,927 25,987
Surplus reserve 36 220,792 196,071
General reserve 37 351,616 311,449
Retained earnings 925,955 828,240
Foreign currency translation reserve (2,096) (372)
Equity attributable to equity holders
of the Bank 2,414,605 2,204,789
Non-controlling interests 6,754 5,957
Total equity 2,421,359 2,210,746
Total equity and liabilities 29,069,155 27,205,047
Approved and authorized for issue by the Board of Directors on
30 March 2022.
Gu Shu Zhang Qingsong Chairman Vice Chairman
The accompanying notes form an integral part of these
consolidated financial statements.
Consolidated statement of changes in equity for the year ended
31 December 2021
(Amounts in millions of Renminbi, unless otherwise stated)
Total equity attributable to equity holders of the Bank
Foreign
Note Ordinary Other Capital Investment Surplus General Retained currency Non-
IV shares equity reserve revaluation reserve reserve earnings translation Subtotal controlling Total
instruments reserve reserve interests
As at 31
December
2020 349,983 319,875 173,556 25,987 196,071 311,449 828,240 (372) 2,204,789 5,957 2,210,746
Profit for the
year - - - - - - 241,183 - 241,183 753 241,936
Other
comprehensive
income - - - 8,940 - - - (1,724) 7,216 104 7,320
Total
comprehensive
income for
the
year - - - 8,940 - - 241,183 (1,724) 248,399 857 249,256
Capital
contribution
from equity
holders 33 - 39,997 - - - - - - 39,997 37 40,034
Appropriation
to
surplus
reserve 36 - - - - 24,721 - (24,721) - - - -
Appropriation
to
general
reserve 37 - - - - - 40,167 (40,167) - - - -
Dividends paid
to ordinary
equity
holders 10 - - - - - - (64,782) - (64,782) - (64,782)
Dividends paid
to other
equity
instrument
holders 10 - - - - - - (13,798) - (13,798) - (13,798)
Dividends paid
to non-
controlling
equity
holders - - - - - - - - - (97) (97)
As at 31
December
2021 349,983 359,872 173,556 34,927 220,792 351,616 925,955 (2,096) 2,414,605 6,754 2,421,359
Consolidated statement of changes in equity
for the year ended 31 December 2021 (continued)
(Amounts in millions of Renminbi, unless otherwise stated)
Total equity attributable to equity holders of the Bank
Foreign
Note Ordinary Other Capital Investment Surplus General Retained currency Non-
IV shares equity reserve revaluation reserve reserve earnings translation Subtotal controlling Total
instruments reserve reserve interests
As at 31
December
2019 349,983 199,886 173,556 29,684 174,910 277,016 741,101 2,219 1,948,355 5,506 1,953,861
Profit for the
year - - - - - - 215,925 - 215,925 475 216,400
Other
comprehensive
income - - - (3,697) - - - (2,591) (6,288) (49) (6,337)
Total
comprehensive
income for
the
year - - - (3,697) - - 215,925 (2,591) 209,637 426 210,063
Capital
contribution
from equity
holders 33 - 119,989 - - - - - - 119,989 25 120,014
Appropriation
to
surplus
reserve 36 - - - - 21,161 - (21,161) - - - -
Appropriation
to
general
reserve 37 - - - - - 34,433 (34,433) - - - -
Dividends paid
to ordinary
equity
holders 10 - - - - - - (63,662) - (63,662) - (63,662)
Dividends paid
to other
equity
instrument
holders 10 - - - - - - (9,530) - (9,530) - (9,530)
As at 31
December
2020 349,983 319,875 173,556 25,987 196,071 311,449 828,240 (372) 2,204,789 5,957 2,210,746
The accompanying notes form an integral part of these
consolidated financial statements.
Consolidated statement of cash flows for the year ended 31
December 2021
(Amounts in millions of Renminbi, unless otherwise stated)
Note Year ended 31 December
IV 2021 2020
Cash flows from operating activities
Profit before tax 295,880 265,050
Adjustments for:
Amortization of intangible assets and other
assets 2,322 2,147
Depreciation of property, equipment and
right-of-use assets 17,475 17,404
Credit impairment losses 165,886 164,699
Impairment losses on other assets 114 204
Interest income arising from investment
securities (252,804) (238,995)
Interest expense on debt securities issued 39,188 35,746
Revaluation loss/(gain) on financial instruments
at fair value through profit or loss 4,019 (2,968)
Net gain on investment securities (1,285) (750)
Share of result of associates and joint
ventures (409) (518)
Net gain on disposal of property, equipment
and other assets (921) (1,003)
Net foreign exchange loss 16,877 26,972
286,342 267,988
Consolidated statement of cash flows
for the year ended 31 December 2021 (continued)
(Amounts in millions of Renminbi, unless otherwise stated)
Note Year ended 31 December
IV 2021 2020
Cash flows from operating activities (continued)
Net change in operating assets and operating
liabilities:
Net decrease/(increase) in balances with
central banks, deposits with banks and
other
financial institutions 313,337 (330,552)
Net (increase)/decrease in placements with
and
loans to banks and other financial institutions (4,992) 29,377
Net decrease/(increase) in financial assets
held under resale agreements 48,919 (49,415)
Net increase in loans and advances to customers (2,026,482) (1,832,315)
Net increase in borrowings from central
banks 10,483 128,514
Net (decrease)/increase in placements from
banks and other financial institutions (99,232) 65,941
Net increase in due to customers and deposits
from banks and other financial institutions 1,712,770 1,375,364
Decrease in other operating assets 173,587 94,748
(Decrease)/increase in other operating
liabilities (116,370) 253,209
Cash from operations 298,362 2,859
Income tax paid (58,747) (63,795)
Net cash from/(used in) operating activities 239,615 (60,936)
Consolidated statement of cash flows
for the year ended 31 December 2021 (continued)
(Amounts in millions of Renminbi, unless otherwise stated)
Note Year ended 31 December
IV 2021 2020
Cash flows from investing activities
Cash received from disposal/redemption
of investment securities 1,619,583 1,987,387
Cash received from investment income 247,470 228,563
Cash received from disposal of investment
in associates and joint ventures 2,793 -
Cash received from disposal of property,
equipment and other assets 5,790 8,350
Cash paid for purchase of investment
securities (2,178,694) (2,669,040)
Increase in investment in associates
and joint ventures (2,146) (1,676)
Cash paid for purchase of property,
equipment and other assets (26,033) (22,844)
Net cash used in investing activities (331,237) (469,260)
Cash flows from financing activities
Contribution from issues of other
equity instruments 40,000 120,000
Cash payments for transaction cost
of other equity instruments issued (3) (11)
Cash received from debt securities
issued 1,635,127 1,731,396
Repayments of debt securities issued (1,497,003) (1,468,391)
Cash payments for interest on debt
securities issued (40,429) (35,050)
Cash payments for transaction cost
of debt securities issued (39) (6)
Cash payments for principal portion
and interest
portion of lease liability (5,010) (4,968)
Capital contribution from non-controlling
interests 37 25
Dividends paid (78,677) (73,192)
Net cash from financing activities 54,003 269,803
Net decrease in cash and cash equivalents (37,619) (260,393)
Cash and cash equivalents as at 1
January 1,175,153 1,454,581
Effect of exchange rate changes on
cash and cash equivalents (12,772) (19,035)
Cash and cash equivalents as at 31
December 38 1,124,762 1,175,153
Consolidated statement of cash flows
for the year ended 31 December 2021 (continued)
(Amounts in millions of Renminbi, unless otherwise stated)
Note Year ended 31 December
IV 2021 2020
Net cash flows from operating activities
include:
Interest received 717,022 655,726
Interest paid (342,465) (315,177)
The accompanying notes form an integral part of these
consolidated financial statemen
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April 05, 2022 08:55 ET (12:55 GMT)
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