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ABC Releases the 2019 Annual Results

Agricultural Bank of China Limited ("ABC" or "the Bank"; Stock code SH: 601288; HK: 1288) released its 2019 annual report on March 30. The report shows that ABC recorded a net profit of RMB 212.92 billion, representing a year-on-year increase of 5.08%. Basic earnings per share stood at RMB 0.59.?

? The Bank saw stable progress in business operations, maintained steady and improving asset quality, and achieved significant progress in serving the real economy.

Achieving fast expansion in business scale with a steady improvement in business performance

By the end of 2019, ABC's total assets reached RMB 24.88 trillion, up RMB 2.27 trillion or 10.0% year-on-year. Deposits and loans grew steadily. The balance of loans and advances reached RMB 13.36 trillion, up RMB 1.42 trillion or 11.9% year-on-year. The deposit balance came to RMB 18.54 trillion, up RMB 1.20 trillion or 6.9% year-on-year. As ABC duly implemented its "Balance Sheet Cleaning Plan", both the balance and ratio of non-performing loans (NPLs) decreased compared with the end of last year. The NPL balance was RMB 187.21 billion, down RMB 2.79 billion year-on-year. The NPL ratio stood at 1.40%, down 0.19 percentage points year-on-year. The provision coverage ratio was 288.75%, up 36.57 percentage points year-on-year, indicating enhanced risk resilience. The Bank successfully issued tier-two capital bonds of RMB 120 billion and perpetual bonds of RMB 120 billion, pushing up the capital adequacy ratio to 16.13%, up 1.01 percentage points year-on-year. The cost-income ratio stood at 30.49%, down 0.78 percentage points year-on-year.

Promoting supply-side structural reform and improving financial services for the real economy

ABC took the initiative in serving major national strategies and key sectors of the real economy and continued to enhance its capabilities to provide integrated financial services. The loans issued to the real sector within the year reached RMB 1.27 trillion, among the top lenders in the industry. The total funding provided to the real sector exceeded RMB 2 trillion. The Bank prioritized major national strategies, initiatives and construction projects. The outstanding loans for such areas as railway, highway, urban infrastructure, water conservancy, and electric programs stood at RMB 3.38 trillion, up RMB 357 billion year-on-year. To facilitate the replacement of old growth engines with new ones, ABC increased credit support for advanced manufacturing and strategic emerging industries to support industrial transformation and upgrading. The total number of customers with loans in the manufacturing industry and outstanding loans to them increased by 45 thousand and RMB 71 billion, respectively. The Bank deeply explored financial services in consumption and people's livelihoods, with the outstanding loans to happiness industries stood at RMB 176.14 billion, up RMB 35.55 billion year-on-year.

Shouldering responsibility to serve "Sannong" and promoting poverty alleviation and rural revitalization through financial services

ABC advanced its "Seven Major Actions" to promote rural revitalization, continuously enhancing the depth and width of financial services provided in rural areas. New loans for counties in 2019 was RMB 547.22 billion, up RMB 109.70 billion year-on-year. The Bank comprehensively upgraded Internet-based financial services to serve Sannong, and built digital archives for 44 thousand administrative villages and 3.08 million agricultural households. The balance of “ABC Huinong e-Loan”, an online loan product for agricultural households, reached RMB 198.6 billion, up 128% year-on-year. The Bank released 20 preferential policies for deeply impoverished regions, launched initiatives such as poverty alleviation assistance from eastern region to the western regions as well as poverty alleviation through consumption and education, successfully lifting Wuqiang and Raoyang County of Hebei Province and Xiushan County of Chongqing Municipality out of poverty. By the end of 2019, the loan balance for 832 poverty-stricken counties was RMB 1.09 trillion, up RMB 167.55 billion or 18.1% year-on-year.

Strengthening inclusive financial service system driven by the dual engines of? “Sannong + small and micro enterprises” and making ground-breaking growth in inclusive finance business

ABC continued to deepen its unique inclusive financial service system driven by the dual engines of “Sannong + small and micro enterprises”, advancing layered and classified management and strengthening the development of sub-branches specialized in such service. The bank selected 100 sub-branches and built the brand of "Model Sub-branches for Inclusive Financial Service", enhancing the bank outlets' capabilities in providing financial services to small and micro businesses. By the end of 2019, the Bank's loan balance for inclusive small and micro enterprises was RMB 592.3 billion, up RMB 217.9 billion or 58.2% year-on-year, 46.3 percentage points higher than the growth rate of all loans. The Bank actively promoted the digital transformation of inclusive finance business with improved digital product portfolio and provided convenient and efficient online credit support for its customers. ABC built an open service platform for small and micro enterprises, which is connected to the national SMEs credit service platform and local government affairs service platform, in a bid to construct an open and sharing inclusive financial service ecosystem.

Keeping up with Fintech developments to promote all-around digital transformation

ABC followed the trend of Fintech development and deeply implemented its digital transformation strategy with the aim of becoming a smart bank offering premium customer experience and a bank with the best digital ecosystem in Sannong and inclusive finance business. The Bank further stepped up its efforts in product innovation and built the "ABC e-Loan" product portfolio consisting of four major online financing products, namely "ABC Personal e-Loan", "ABC Small and Micro Enterprise e-Loan", "ABC Huinong e-Loan", and "ABC Industrial e-Loan". By the end of 2019, the balance of "ABC e-Loan" increased by RMB 589.4 billion to RMB 372.1 billion from the end of last year. The Bank focused on improving scenario-based financial service capabilities and rolled out a scenario-based brand called "ABC Intelligent +" , dedicated to three major scenarios including government affairs and people's livelihoods, consumption and retail, and industrial chain. ABC accelerated the transformation of retail business and branch network in a bid to comprehensively improve its online operations. By the end of 2019, ABC established 22 thousand intelligent branch outlets with intelligent service coverage ratio reaching 100%. The number of mobile banking users exceeded 300 million, with monthly active users reaching more than 72 million, up 36.2% year-on-year.

Intensifying reform and innovation efforts to invigorate business development of the whole bank

ABC launched its reform in building a layered and classified management system and adopted differentiated policies to its branches on credit authorization, budget allocation, performance evaluation and incentive in line with their regional resource endowment and economic conditions, enabling its branches to better serve local economic development. The Bank deepened the reform to enable more institutions conducting direct operation and steadily improved group-wide synergy, with ABC Wealth Management being established and emerging businesses in internet finance, investment banking, wealth management, custody service, private banking gaining rapid growth. ABC enhanced collaborations between domestic and overseas networks as well as between parent company and subsidiaries. Operating performance of non-banking subsidiaries grew as a whole, making a bigger contribution to the Group's profits. The assets of overseas affiliates grew steadily, with stable profitability and asset quality.

2020 is the final year for completing the building of a moderately prosperous society in all respects and the 13th Five-Year Plan. It is also a crucial year to secure a decisive victory for the first Centenary Goal and the fight against poverty. In 2020, ABC will continue to uphold the principle of pursuing progress while ensuring stability. In addition to making all-round efforts to win the battle of the COVID-19 epidemic prevention and control, the Bank will maintain strategic focus, enhance financial service innovation, better serve the real economy, promote the digital transformation comprehensively, and make its financial services more inclusive and efficient to facilitate high-quality economic development.