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Announcements & Notices

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement CHINA BOHAI BANK CO, LTD 渤海銀行股份有限公司 (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 9668) ANNOUNCEMENT ON COMPLETION OF ISSUE OF FINANCIAL BONDS The board of directors (the “Board”) of CHINA BOHAI BANK CO, LTD (the “Bank”) is pleased to announce that, as considered and approved at the 2024 first extraordinary general meeting of the Bank and approved by the People’s Bank of China, the Bank issued the “CHINA BOHAI BANK CO, LTD 2025 Financial Bonds (Tranche 1)” (the “Bonds”) in China national inter-bank bond market The bookkeeping of the Bonds was filed on April 25, 2025, and the Bonds have accrued interest with effect from April 29, 2025 The total issue size of the Bonds is RMB10 billion The Bonds are three-year fixed rate bonds with a coupon rate of 188% The proceeds from the issue of the Bonds will be used for supplementing medium- and long-term stable funds, optimizing the liability structure, and promoting the sound development of businesses By order of the Board CHINA BOHAI BANK CO, LTD WANG Jinhong Chairman Tianjin, China April 29, 2025 As of the date of this announcement, the Board of the Bank comprises Mr WANG Jinhong and Mr QU Hongzhi as executive directors; Mr AU Siu Luen, Ms YUAN Wei, Mr DUAN Wenwu, Mr HU Aimin and Mr ZHANG Yunji as non-executive directors; and Mr TSE Yat Hong, Mr SHUM Siu Hung Patrick, Ms WANG Aijian, Mr LIU Junmin and Mr LIU Lanbiao as independent non- executive directors

OF ISSUE COMPLETION FINANCIAL ANNOUNCEMENT

2025-04-29 18:00:51

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Announcements & Notices

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement CHINA BOHAI BANK CO, LTD 渤海銀行股份有限公司 (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 9668) CLOSURE OF REGISTER OF MEMBERS The board of directors (the “Board”) of CHINA BOHAI BANK CO, LTD (the “Bank”) hereby announces that the 2024 annual general meeting of the Bank (the “2024 AGM”) will be held on Wednesday, June 18, 2025 The Bank will publish the relevant notice of the meeting and the circular to shareholders and other corporate communication documents in due course In order to determine the shareholders who are entitled to attend the 2024 AGM, the register of members of the Bank will be closed from Monday, May 19, 2025 to Wednesday, June 18, 2025 (both days inclusive) The record date for determining the shareholders’ eligibility to attend and vote at the 2024 AGM is Wednesday, June 18, 2025 In order to attend and vote at the 2024 AGM, holders of H shares of the Bank whose transfer documents have not been registered shall deposit all transfer documents accompanied by the relevant share certificate(s) at the H share registrar of the Bank, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, No 183 Queen’s Road East, Wanchai, Hong Kong for registration not later than 4:30 pm on Friday, May 16, 2025 By order of the Board CHINA BOHAI BANK CO, LTD WANG Jinhong Chairman Tianjin, China April 29, 2025 As of the date of this announcement, the Board of the Bank comprises Mr WANG Jinhong and Mr QU Hongzhi as executive directors; Mr AU Siu Luen, Ms YUAN Wei, Mr DUAN Wenwu, Mr HU Aimin and Mr ZHANG Yunji as non-executive directors; and Mr TSE Yat Hong, Mr SHUM Siu Hung Patrick, Ms WANG Aijian, Mr LIU Junmin and Mr LIU Lanbiao as independent non- executive directors

MEMBERS OF CLOSURE REGISTER

2025-04-29 18:00:18

上一页下一页

Announcements & Notices

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement CHINA BOHAI BANK CO, LTD 渤海銀行股份有限公司 (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 9668) INSIDE INFORMATION FINANCIAL AND OTHER INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 2025 This announcement is made by CHINA BOHAI BANK CO, LTD (the “Bank”) pursuant to Rule 1309 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) The board of directors of the Bank would like to inform shareholders and potential investors of the Bank of the financial and other information of the Bank and its subsidiary (the “Group”) for the three months ended March 31, 2025 I Unaudited financial information of the Group for the three months ended March 31, 2025 prepared under the International Financial Reporting Standards For the three months ended March 31, 2025 RMB’000 Operating income 7,892,117 Net profit 3,108,720 Other comprehensive income (1,510,314) As at March 31, 2025 RMB’000 Total assets 1,787,173,443 Total liabilities 1,675,450,209 Other equity instruments 11,000,000 1 II Unaudited financial information, capital adequacy ratio and other information of the Group for the three months ended March 31, 2025 prepared under the Chinese Accounting Standards for Business Enterprises During the term of the capital bonds of the Bank, pursuant to the relevant requirements of the National Financial Regulatory Administration and the People’s Bank of China, the Bank shall strictly comply with the Measures for the Administration of the Issuance of Financial Bonds in the National Inter-bank Bond Market and the Information Disclosure Guidelines for Financial Bonds in Inter-bank Bond Market The unaudited financial information, capital adequacy ratio and other information of the Bank for the three months ended March 31, 2025 prepared under the Chinese Accounting Standards for Business Enterprises will be published on the website of China Central Depository & Clearing Co, Ltd (http://wwwchinabondcom cn) and the website of China Foreign Exchange Trade System & National Interbank Funding Center (http://wwwchinamoneycomcn), details of which are as follows: As at March 31, 2025, the Group’s capital adequacy ratio, tier 1 capital adequacy ratio and core tier 1 capital adequacy ratio were 1107%, 910% and 816%, respectively, which were in compliance with the relevant PRC regulatory requirements Among which, total net capital amounted to RMB129305 billion, net tier 1 capital amounted to RMB106318 billion, net core tier 1 capital amounted to RMB95318 billion, and total risk-weighted assets amounted to RMB1,167935 billion As at March 31, 2025, the balance of tier 2 capital bonds and non-fixed term capital bonds of the Bank amounted to RMB23 billion and RMB11 billion, respectively Shareholders and potential investors of the Bank are reminded that the above-mentioned financial information has not been reviewed or audited by the auditors of the Bank Differences may arise between such financial information and the information disclosed in the reviewed report or audited report due to review and audit adjustments Shareholders and potential investors of the Bank are advised to exercise caution and should not rely solely on such information when dealing in the shares of the Bank By order of the Board CHINA BOHAI BANK CO, LTD WANG Jinhong Chairman Tianjin, China April 29, 2025 As of the date of this announcement, the Board of the Bank comprises Mr WANG Jinhong and Mr QU Hongzhi as executive directors; Mr AU Siu Luen, Ms YUAN Wei, Mr DUAN Wenwu, Mr HU Aimin and Mr ZHANG Yunji as non-executive directors; and Mr TSE Yat Hong, Mr SHUM Siu Hung Patrick, Ms WANG Aijian, Mr LIU Junmin and Mr LIU Lanbiao as independent non-executive directors 2

THE INFORMATION FOR OTHER THREE

2025-04-29 17:59:33

Financial Reports

Annual Report 2024 Denitions 3 Group, our Group the Bank and its subsidiary H Shares the overseas listed foreign shares issued by the Bank with a nominal value of RMB100 each, which are subscribed for and traded in Hong Kong dollars and listed and traded on the Hong Kong Stock Exchange HKEX Hong Kong Exchanges and Clearing Limited Hong Kong Stock Exchange The Stock Exchange of Hong Kong Limited IFRS International Financial Reporting Standards and International Accounting Standards (“IAS”), the related standards, amendments and interpretations issued by the International Accounting Standards Board (“IASB”) Listing Rules the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited Model Code the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules Reporting Period the year ended December 31, 2024 SASAC the State-owned Assets Supervision and Administration Commission of the State Council (中華人民共和國國務院國有資產監督管理委員會) SFO the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) Tianjin SASAC the State-owned Assets Supervision and Administration Commission of Tianjin People’s Government CHINA BOHAI BANK CO, LTD Annual Report 2024 Chairman’s Statement 5 Chairman’s Statement The year 2024 marked the 75th anniversary of the founding of the People’s Republic of China, as well as a crucial year for China Bohai Bank to realize the goals and tasks of high-quality development and deepening reform, transformation and development The Bank diligently adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and fully studied and implemented the spirit of the important statements from General Secretary Xi Jinping on finance works and his important speech made during his visit to Tianjin Adhering to keeping political consciousness in mind and prioritizing the well-being of the people in the financial endeavours, with serving the real economy as fundamental purpose, the Bank focused on the implementation of the “five priorities”, thus continuously deepening and solidifying high-quality development with achievements consistently made In 2024, despite the extremely severe and complex internal and external business environment, we maintained a vigorous and proactive spirit, confronting challenges head-on Focusing on our core mission of high-quality development, our operations steadily progressed and improved in quality The year 2024 was a year of “progression” for China Bohai Bank Attributable to the enhanced Party building, the improving development momentum, the optimized business structure, the stronger customer base, the enriched product portfolio and the accumulated innovative power, the Bank recorded increase in both operating income and net profit Furthermore, deposit exceeded RMB1 trillion and asset quality remained stable, with stable outlook for international ratings The year 2025 is pivotal for China Bohai Bank to accelerate its high-quality development We will continue to study and implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, firmly implement the decisions and deployments of the Party Central Committee, insist on strengthening the Party’s overall leadership, exercise full and rigorous Party self-governance, and enhance the in-depth integration of Party building and business, thus paving a new path and promoting rejuvenation The Bank will strengthen its tactical capability to achieve strategic objectives, implement structural adjustment to achieve functional enhancement, and optimize its business model to achieve business system transformation The Bank will continuously strengthen fundamental management, optimize asset and liability planning and coordination, incur liabilities at low cost, optimize asset layout and refine capital management The Bank will also implement the building up of risk control compliance and digital transformation throughout its operations Furthermore, the Bank will promote the implementation of the “Nine-Five-Three-One” system Specifically, the Bank will focus on the transformation of the “Nine Major Banks”, thereby facilitating differentiated operation through specialized transformation The Bank will deeply implement the “Five Factories” approach in a more practical manner, focus on the construction of customer factory, product factory, collection factory, talent factory and branch factory, and promote stable and long-lasting operational development Moreover, the Bank will deepen the “Three Systems” reform, reshape the organizational structure, strengthen the appraisal-orientated operation, and optimize the remuneration allocation With the “One Core” in serving Tianjin as a demonstration, a role model will be set for the Bank in serving the real economy Taking actions to achieve results, our excellent performance will bring us success We will celebrate the 20th anniversary of China Bohai Bank with our outstanding achievements, and start a new chapter for the high-quality development of China Bohai Bank! WANG Jinhong Chairman March 26, 2025 CHINA BOHAI BANK CO, LTD Annual Report 2024 6 President’s Statement President’s Statement In 2024, the senior management of China Bohai Bank diligently adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and insisted on the general principle of pursuing progress while ensuring stability in accordance with the directives of the Party Committee of the head office and the Board of Directors Our senior management systematically implemented various works on transformation and development, with steady improvements in vitality, motivation, cohesion and major indicators, thus further solidifying the positive momentum of high-quality development In 2024, we were determined to fulfill our missionary commitment By intensifying and solidifying the “five priorities”, we continued to strengthen our customer base, innovate products and services, and upgrade business models, thus achieving new results in serving the real economy Leveraging on the implementation of business positioning of “Nine Major Banks”, and closely followed policy directions and industry trends, we iterated our operating concepts and management modes, and continued to improve quality and optimize structure, making new breakthroughs in high-quality development As of the end of the Reporting Period, our total assets amounted to RMB1,843842 billion, representing a year-on-year increase of 641%; and total liabilities amounted to RMB1,733717 billion, representing a year-on-year increase of 713% Net assets per share attributable to ordinary Shareholders of the Bank was RMB558, representing an increase of RMB026 as compared to the end of the previous year The non-performing loan ratio of the Bank was 176% Our development was stable as a whole Our achievements would not have been possible without the support of various parties These achievements are also attributable to the determination and hard work of the Bank’s cadres and employees We sincerely thank all sectors of society for their support and trust in China Bohai Bank, and we extend our gratitude to all our cadres and employees for their diligence, commitment, and contributions In 2025, the senior management of China Bohai Bank will continue to guide all cadres and employees in fully implementing the guiding principles from the 20th National Congress of the Communist Party of China (CPC) and the second and third plenary sessions of the 20th CPC Central Committee, and diligently adhering to the important statements from General Secretary Xi Jinping on finance works and the spirit of the Central Economic Work Conference Adhering to the decision and deployment of the CPC Central Committee and the State Council, we will fully comply with the work requirements of the regulatory policies and the Tianjin Committee of the CPC and Tianjin Municipal People’s Government As guided by the Party Committee of the head office, adhering to the basic principles of serving the real economy with financial services, we will insist on making the best use of existing resources, optimizing allocation of new resources and enhancing quality, and put every effort in completing various tasks and missions, thereby celebrating the 20th anniversary of China Bohai Bank with new achievements in the high-quality development of the Bank QU Hongzhi President March 26, 2025 CHINA BOHAI BANK CO, LTD Annual Report 2024 Statement of the Chairman of the Board of Supervisors 7 Statement of the Chairman of the Board of Supervisors The year 2024 marked the 75th anniversary of the founding of the People’s Republic of China It was a crucial year for further deepening reform comprehensively to advance Chinese modernization, as well as the opening year for China Bohai Bank to comprehensively push itself forward towards the goal of high-quality development As guided by the spirit of the third plenary session of the 20th CPC Central Committee, the Board of Supervisors of China Bohai Bank always adheres to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era Striving to the implementation of the decisions and deployments of the Party Central Committee as well as meeting the work requirements of the Tianjin Committee of the CPC and Tianjin Municipal People’s Government, with the construction of a financial power as its mission, the Board of Supervisors faithfully performed its duties under the laws and regulations and the Articles of Association of the Bank With a focus on the “Ten Special Tasks” of the Party Committee of the head office, the Board of Supervisors continuously improved the quality and efficiency of supervision, thereby playing a positive role in facilitating the implementation of the high-quality development strategy throughout the Bank During the Reporting Period, the Board of Supervisors of the Bank earnestly performed its supervisory functions It improved the duty performance supervision by continuously urging the Board of Directors of the Bank, the senior management and their members to duly perform their duties and responsibilities Moreover, the Board of Supervisors enhanced the financial supervision by actively paying close attention to the Bank’s important financial decisions and their implementation, as well as the internal control supervision by focusing on the improvement in the management of internal control compliance It also optimized risk management supervision by continuously deepening comprehensive risk management With the strengthening of self-construction, improvement in mechanisms and systems and coordination enhancement, the Board of Supervisors conducted on-site research and special training, thereby striving to improve its working standards Taking bold actions and focusing on practical works, in 2025, the Board of Supervisors of the Bank will continuously and thoroughly adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, insist on the general principle of pursuing progress while ensuring stability, deeply grasp keeping political consciousness in mind and putting people first in the financial work, strive to accomplish the “five priorities”, and promote the development of China Bohai Bank with new results through practical efforts and performance BAI Xinyu Chairman of the Board of Supervisors March 26, 2025 CHINA BOHAI BANK CO, LTD Annual Report 2024 Honors and Awards 9 Honors and Awards At the 7th Annual Meeting of Beijing Financial Assets Exchange, the Bank won the “2024 Most Innovative Institution” award and the “2024 Most Powerful Institution in Market Breakthrough” award granted by Beijing Financial Assets Exchange for serving the high-quality development of interbank bond market At the 2024 Best Investment Bank selection hosted by Wind, the Bank ranked first in Rapid Progress Award for Bank Bond Underwriting In the collection of the 2024 “China Ding” Outstanding Cases in the Financial Industry hosted by China Internet Information Center, the Bank was selected for “Outstanding Case for Financial Consumer Protection of the Year” In the selection of the “2024 Banking Industry ESG Development Practices” hosted by China Banking and Insurance News, the Bank was included in the list of “Top 20 Banks in ESG Comprehensive Performance”, with an AA rating At the “2024 Bankers’ Financial Innovation Forum and Bankers’ Financial Innovation Results Conference” hosted by The Chinese Banker magazine, the Bank was selected for “2024 Bankers’ Outstanding Case for Risk Management Innovation of the Year” and “2024 Bankers’ Outstanding Case for Transaction Banking Innovation of the Year” In the collection of “21st Century Outstanding Cases of Financial Development 2024” hosted by 21st Century Business Herald, the Bank was recognized as “Financial Institution with New Quality Productive Forces of 2024” and “Financial Institution for Consumer Rights Protection of 2024” At the “2024 China Financial Development Forum and the 15th Golden Censer Awards” hosted by National Business Daily, the Bank won the “Excellence in Corporate Finance Award of the Year”, and its subsidiary CBHB Wealth Management Co, Ltd won the “Competitive Banking Wealth Management Products of the Year” In the collection of “Five Major Finance Cases” hosted by National Business Daily, the Bank was selected in “Five Priorities in Finance Industry – Digital Finance Case” In the collection of “2024 Outstanding Cases of Financial Enterprise Gala” hosted by The Economic Observer, the Bank was rated as “Outstanding Inclusive Bank of the Year” For the “2024 China Banking Industry Gamma Award” hosted by Securities Times (Securities Firms China), the Bank won the “2024 Gamma Award for Technological Innovation” At the 7th Capital Market Summit & Golden Jubilee Awards Ceremony 2024 hosted by China Investment Network, the Bank was recognized as “2024 Outstanding Regional Service Bank” At the 2024 Huaxia Institutional Investor Annual Conference & the 18th Golden Cicada Awards Presentation hosted by China Times, the Bank won the “2024 Outstanding Financial Institution Empowering the Elderly Care Industry” award In the selection of the “ESG Golden Antelope Award at the 2024 ESG and High Quality Development Innovation Forum” and “2024 Golden Tangerine Award” hosted by The Time Weekly, the Bank won the “2024 Green Finance Pioneer” award and “Best Digital Finance Institution” award, respectively The Bank was awarded the “Market Influencer of the Year”, “Market Innovator of the Year”, “Active Repo Trader”, “X-Repo Active Institution”, “X-Lending Star”, “X-Lending Active Institution”, “Star of X-Bond Spread Trading Strategy”, “Best X-Bargain Performance Award”, “Rising Star of iBean Derivatives” and “Star of X-Bargain Interest Rate” by China Foreign Exchange Trade System The “CBHB Preferred Tianjin Local Government Bond Basket” was recognized as “Active Basket” and “Quotation Star”; the “CBHB Tianjin Local Government Green Bond Basket” was recognized as “Active Basket” CHINA BOHAI BANK CO, LTD Annual Report 2024 Summary of Accounting Data and Financial Indicators 11 Summary of Accounting Data and Financial Indicators I KEY ACCOUNTING DATA AND FINANCIAL INDICATORS (Unit: RMB’000) Increase 2024 2023 (decrease) (%) 2022 2021 2020 Operating results data: Operating income 25,481,589 24,997,370 194 26,465,220 29,194,364 32,492,170 Profit before taxation 5,333,030 5,163,077 329 6,511,454 10,303,797 10,085,092 Net profit 5,255,815 5,080,903 344 6,107,475 8,629,724 8,444,571 Net profit attributable to equity holders 5,255,815 5,080,903 344 6,107,475 8,629,724 8,444,571 of the Bank Net cash flows generated from operating 92,909,178 81,308,605 1427 26,830,977 82,987,687 52,085,407 activities Indicators per share (RMB): Basic earnings per share attributable to 024 023 435 029 043 047 ordinary Shareholders of the Bank Diluted earnings per share attributable to 024 023 435 029 043 047 ordinary Shareholders of the Bank Net cash flows generated from operating 523 458 1419 151 467 327 activities per share Financial ratios (%): Average return on total assets(1) 029 030 A decrease of 038 058 067 001 percentage point Weighted average return on net assets(2) 444 448 A decrease of 581 888 1068 004 percentage point December 31, December 31, Increase December 31, December 31, December 31, 2024 2023 (decrease) (%) 2022 2021 2020 Scale indicators: Total assets 1,843,842,128 1,732,733,836 641 1,659,459,902 1,582,707,598 1,393,523,125 Gross loans and advances to customers(3) 936,490,691 932,644,435 041 957,216,978 955,355,247 887,537,545 Total liabilities 1,733,717,300 1,618,331,135 713 1,549,508,868 1,476,143,521 1,290,277,295 Gross deposits from customers(3) 1,046,088,795 915,161,978 1431 843,873,695 820,589,157 746,725,783 Total equity 110,124,828 114,402,701 (374) 109,951,034 106,564,077 103,245,830 Net assets per share attributable to ordinary 558 532 489 507 488 469 Shareholders of the Bank (RMB)(4) Share capital 17,762,000 17,762,000 – 17,762,000 17,762,000 17,762,000 Notes: (1) Average return on total assets equals net profit divided by average value of total assets at the beginning and end of the period (2) Weighted average return on net assets is calculated pursuant to the Compilation Rules for Information Disclosures by Companies that Offer Securities to the Public (No 9): Calculation and Disclosure of Rate of Return on Equity and Earnings per Share (2010 Revision) (《公開發行證券的公司信息披露編報規則第 9 號－淨資產收益率和每股收益的計算及披露（2010 年修訂）》) issued by the CSRC (3) Gross loans and advances to customers and gross deposits from customers exclude interests accrued (4) Net assets per share attributable to ordinary Shareholders of the Bank equals equity attributable to holders of ordinary shares of the Bank at the end of the period, which has excluded other equity instruments, divided by total share capital at the end of the period CHINA BOHAI BANK CO, LTD Annual Report 2024 Summary of Accounting Data and Financial Indicators 13 Notes: (1) Net interest spread is calculated as the difference between the average yield on total interest-earning assets and the average cost of total interest-bearing liabilities (2) Net interest margin is calculated by dividing net interest income by the average balance of total interest-earning assets; gains arising from the trading financial assets business are not classified as interest income for accounting purposes, the corresponding interest expense on interest-bearing liabilities of which is adjusted accordingly, restating prior years’ information on a comparable basis (3) Cost-to-income ratio is calculated by dividing total operating expenses (excluding tax and surcharges, etc) by operating income (4) NPL ratio equals the balance of non-performing loans divided by gross loans and advances to customers (excluding interests accrued) (5) Allowance coverage ratio equals the sum of allowance for impairment losses on the loans measured at amortised cost and allowance for impairment losses on the loans measured at fair value through other comprehensive income divided by the NPL balances (6) Allowance to gross loan ratio equals the sum of allowance for impairment losses on the loans measured at amortised cost and allowance for impairment losses on the loans measured at fair value through other comprehensive income divided by gross loans and advances to customers (excluding interests accrued) (7) Since January 1, 2024, the Group calculates the capital adequacy ratios for each tier and leverage ratio according to the Rules on Capital Management of Commercial Banks (《商業銀行資本管理辦法》), China Accounting Standards for Business Enterprises (中國企業會計準則) and other relevant regulations The Group calculates the data in prior years according to the Capital Rules for Commercial Banks (Provisional) (《商業銀行資本管理辦法（試行）》), Leverage Ratio Rules for Commercial Banks (Revised) (《商業銀行槓桿率管理辦法（修訂）》), China Accounting Standards for Business Enterprises (中國企業會計準則) and other relevant regulations (8) Proportion of loans to the single largest customer and proportion of loans to top ten customers are the ratio of the gross loan of the single largest customer to the net capital and the ratio of the gross loan of the top ten customers to the net capital, respectively CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 15 II DEVELOPMENT STRATEGIES Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the Bank thoroughly studied and implemented the spirit of the 20th CPC National Congress and the second and third plenary sessions of the 20th CPC Central Committee, the spirit of the Central Financial Work Conference and the Central Economic Work Conference, and the spirit of the important speech made by General Secretary Xi Jinping during his visit to Tianjin, adhered to the Party’s overall leadership over financial work, and deeply grasped keeping political consciousness in mind and putting people first in the financial work The Bank took quality enhancement as the premise and basis, making the best use of existing resources as the urgent need and key, optimizing allocation of new resources as the path and pillar, promoted the “Ten Special Tasks”, focused on the construction of “customer factory, product factory, collection factory, talent factory and branch factory”, and strived to build a responsible, professional and refined China Bohai Bank The Bank adhered to make itself a modern financial enterprise with Chinese characteristics with strong political guidance, clear strategic positioning, effective corporate governance, improved business quality and efficiency, controllable overall risks and healthy and sustainable development In terms of business strategy, the Bank focused on serving the national strategic objectives and the real economy, as well as Tianjin’s “Ten Actions”, “Three Points on Quantity and Quality” and “Three Upgrades”, made great efforts to promote the “five priorities”, namely technology finance, green finance, inclusive finance, pension finance and digital finance, and the “two specialties”, namely industrial finance and shipping finance, so as to realize the development of both supporting the real economy and its own high-quality development For the corporate banking business, the Bank was positioned as an industrial bank, a transaction bank and a light-model bank, focusing on building industrial strategic customer groups, specializing in serving basic and special customer groups, growing government and institution customer groups and expanding regional key customer groups For the retail banking business, the Bank was positioned as an account-oriented bank, a wealth management bank and an ecosystem-based bank, and focused on reducing cost in liability business, improving quality of asset business, increasing transaction volume of wealth management business, and strengthening business development foundation For the financial markets business, the Bank was positioned as a bond bank, an asset management bank and an agency bank By taking investment and research capabilities as the core, trend management as the starting point, and customer service as the orientation, the Bank improved the major products for coordination and refined the major products for revenue generation, thus realizing coordinated operation of business lines and integrated customer operation III SCOPE OF BUSINESSES The business scope of the Bank includes: absorbing public deposits; offering short-term, medium-term and long- term loans; arranging settlement of domestic and international accounts; handling acceptance and discount of bill; issuing financial securities; acting as agent to issue, settle and underwrite government bonds and proprietary trading bonds issued by government and financial institutions; inter-bank borrowing and lending; trading of foreign currencies by itself and on behalf of its customers; settlement and sale of foreign exchange; bank card business; letters of credit and financial guarantees; acting as agent on inward and outward payments; acting as insurance agent; offering safe-deposit facilities; derivative trading; securities investment custody; insurance fund custody; selling securities investment fund; and other business approved by the banking regulatory institutions of the State Council (For projects subject to approval in accordance with the law, business activities shall be carried out upon approval of relevant authorities) CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 17 Stabilizing and recovering profitability indicators with continuous cost reduction and efficiency enhancement During the Reporting Period, the Group continued to strengthen its efforts in serving the real economy, actively expanded its core customer base, continuously optimized its business structure, seized market opportunities, and implemented cost reduction and efficiency enhancement measures Hence, both operating income and net profit recorded year-on-year increase During the Reporting Period, the Group achieved an operating income of RMB25,482 million, representing an increase of RMB484 million or 194% as compared to the previous year; a net profit of RMB5,256 million, representing an increase of RMB175 million or 344% as compared to the previous year; and a cost-to-income ratio of 3901%, representing a decrease of 150 percentage points as compared to the previous year V ANALYSIS OF FINANCIAL STATEMENTS (I) Items in the Consolidated Statement of Profit or Loss and Other Comprehensive Income 1 Changes in items in the consolidated statement of profit or loss and other comprehensive income During the Reporting Period, the Group realized a net profit of RMB5,256 million, representing an increase of 344% as compared to the previous year, mainly attributable to the growth in operating income and the continuous cost reduction and efficiency enhancement The following table sets forth the changes in items in the consolidated statement of profit or loss and other comprehensive income of the Group for the periods indicated: (Unit: RMB’000) Increase (decrease) 2024 2023 Change (%) Net interest income 15,542,470 17,645,989 (2,103,519) (1192) Net non-interest income 9,939,119 7,351,381 2,587,738 3520 Operating income 25,481,589 24,997,370 484,219 194 Operating expenses (10,488,740) (10,713,146) 224,406 (209) Impairment losses on assets (9,659,819) (9,121,147) (538,672) 591 Profit before taxation 5,333,030 5,163,077 169,953 329 Income tax expense (77,215) (82,174) 4,959 (603) Net profit 5,255,815 5,080,903 174,912 344 Total comprehensive income 5,675,967 5,401,667 274,300 508 2 Net interest income During the Reporting Period, the net interest income of the Group amounted to RMB15,542 million, representing a decrease of 1192% as compared to the previous year CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 19 The following table sets forth the average balance, interest income and average yield for components of loans and advances to customers of the Group for the periods indicated: (Unit: RMB’000) 2024 2023 Average Interest Average Average Interest Average balance income yield (%) balance income yield (%) Corporate loans and advances 606,269,281 27,486,177 453 540,016,610 24,945,056 462 Personal loans 230,450,603 10,783,079 468 315,300,208 17,705,626 562 Discounted bills 76,609,078 1,107,269 145 76,514,078 1,169,830 153 Gross loans and advances to customers 913,328,962 39,376,525 431 931,830,896 43,820,512 470 Interest income arising from deposits with the central bank, deposits with banks and other financial institutions and placements with banks and other financial institutions and interest income arising from financial assets held under resale agreements During the Reporting Period, the Group’s interest income arising from deposits with the central bank, deposits with banks and other financial institutions and placements with banks and other financial institutions totaled RMB1,902 million, representing a year-on-year decrease of 1659%, mainly due to the decline in market interest rates; and the interest income arising from financial assets held under resale agreements amounted to RMB495 million, representing a year-on-year decrease of 001% Interest income arising from financial investments During the Reporting Period, the Group’s interest income arising from financial investments amounted to RMB13,109 million, representing a year-on-year decrease of 447% (3) Interest expense During the Reporting Period, the Group’s interest expense amounted to RMB39,339 million, representing a year-on-year decrease of 781% Interest expense on deposits from customers During the Reporting Period, the Group’s interest expense on deposits from customers amounted to RMB22,163 million, representing a year-on-year decrease of 937%, mainly due to the Group’s active optimization of its deposit structure and greater efforts to expand low-cost deposits Coupled with the decline in market interest rates, the average cost ratio of deposits decreased by 032 percentage point as compared to the previous year The following table sets forth the average balance, interest expense and average cost on deposits from customers of the Group for the periods indicated: (Unit: RMB’000) 2024 2023 Average Interest Average Average Interest Average balance expense cost (%) balance expense cost (%) Corporate deposits 564,246,664 13,192,836 234 565,872,493 15,290,213 270 Of which: Demand deposits 172,577,904 1,851,484 107 197,120,230 2,753,609 140 Time deposits 391,668,760 11,341,352 290 368,752,263 12,536,604 340 Personal deposits 201,128,221 5,582,102 278 202,090,737 5,933,207 294 Of which: Demand deposits 28,945,771 84,101 029 37,969,166 258,735 068 Time deposits 172,182,450 5,498,001 319 164,121,571 5,674,472 346 Pledged deposits and others 154,413,047 3,387,981 219 129,231,508 3,231,238 250 Total deposits from customers 919,787,932 22,162,919 241 897,194,738 24,454,658 273 CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 21 (1) Net fee and commission income During the Reporting Period, the net fee and commission income of the Group amounted to RMB2,974 million, representing a year-on-year decrease of 2563%, mainly due to the decrease in agency service and asset management business fees as compared to the previous year The following table sets forth the principal components of the Group’s net fee and commission income for the periods indicated: (Unit: RMB’000) Increase 2024 2023 (decrease) (%) Fee and commission income 3,995,271 5,077,664 (2132) Of which: A gency service and asset management business fees 1,835,317 3,044,037 (3971) Settlement and clearing fees 997,376 937,790 635 G uarantee and commitment fees 614,786 530,773 1583 Custodian service fees 279,383 293,830 (492) Consulting service fees 127,014 139,813 (915) Bank card fees 96,237 91,432 526 Others 45,158 39,989 1293 Fee and commission expense 1,021,212 1,078,743 (533) Net fee and commission income 2,974,059 3,998,921 (2563) (2) Other net non-interest income During the Reporting Period, other net non-interest income of the Group amounted to RMB6,965 million, representing a year-on-year increase of 10776%, mainly due to the increase in net trading income by 8747% and the increase in net gains on financial investments by 11613% as compared to the previous year The following table sets forth the principal components of other net non-interest income of the Group for the periods indicated: (Unit: RMB’000) Increase 2024 2023 (decrease) (%) Net trading income 941,146 502,026 8747 Net gains on financial investments 5,972,326 2,763,298 11613 Other operating income 51,588 87,136 (4080) Total 6,965,060 3,352,460 10776 4 Operating expenses During the Reporting Period, the operating expenses of the Group amounted to RMB10,489 million, representing a year-on-year decrease of 209% Among them, staff costs amounted to RMB5,955 million, representing a year-on-year decrease of 008%; other operating expenses amounted to RMB4,534 million, representing a year-on-year decrease of 462%; and cost-to-income ratio was 3901%, representing a year-on-year decrease of 150 percentage points The decrease was mainly attributable to the Group’s in-depth implementation of the cost reduction and efficiency enhancement measures, continuous efforts to establish the mindset of operating with “limited financial resources”, and continuous optimization of control measures in respect of branch construction, network operation and expense management, thus steadily enhancing input and output efficiency CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 23 (II) Items in the Consolidated Statement of Financial Position 1 Items of assets As of the end of the Reporting Period, the total assets of the Group amounted to RMB1,843,842 million, representing an increase of 641% as compared to the end of the previous year, which was mainly due to an increase in asset scale led by the rapid development of financial investment The following table sets forth the composition of total assets of the Group as of the dates indicated: (Unit: RMB’000) December 31, 2024 December 31, 2023 Increase Proportion Proportion (decrease) Amount (%) Amount (%) (%) Cash and deposits with the central bank 148,162,149 804 103,494,179 597 4316 Deposits with banks and other financial institutions 11,405,462 062 20,938,491 121 (4553) Placements with banks and other financial institutions 4,885,299 026 12,353,608 071 (6045) Derivative financial assets 2,448,184 013 1,551,181 009 5783 Financial assets held under resale agreements 18,531,145 101 6,532,553 038 18367 Loans and advances to customers 925,361,742 5019 920,394,849 5312 054 Financial investments 700,438,320 3799 633,136,792 3654 1063 Property and equipment 3,217,544 017 3,586,673 021 (1029) Deferred tax assets 12,362,922 067 14,759,051 085 (1623) Right-of-use assets 3,606,436 020 3,886,770 022 (721) Other assets 13,422,925 072 12,099,689 070 1094 Total assets 1,843,842,128 10000 1,732,733,836 10000 641 (1) Loans and advances to customers As of the end of the Reporting Period, the Group’s gross loans and advances granted to customers (including discounts) amounted to RMB936,491 million, representing an increase of 041% as compared to the end of the previous year The following table sets forth the distribution of loans and advances to customers of the Group by product type as of the dates indicated: (Unit: RMB’000) December 31, 2024 December 31, 2023 Increase Proportion Proportion (decrease) Amount (%) Amount (%) (%) Corporate loans and advances 654,736,013 6991 566,740,133 6077 1553 Discounted bills 59,727,587 638 93,160,915 999 (3589) Personal loans 222,027,091 2371 272,743,387 2924 (1859) Gross loans and advances to customers 936,490,691 10000 932,644,435 10000 041 Interests accrued 13,115,173 12,350,216 Total 949,605,864 944,994,651 CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 25 (3) Financial derivatives transactions The Group’s financial derivatives transactions mainly consist of interest rate swaps, foreign exchange swaps and foreign exchange forwards, etc The Group flexibly uses various derivative financial instruments to hedge exchange rate and interest rate risks, carries out strategic transactions and reasonably manages the portfolio of derivative financial instrument position, and keeps a sound trading style As of the end of the Reporting Period, the notional amount and fair value of the main types of unexpired derivative financial instruments held by the Group are set out as follows: (Unit: RMB’000) December 31, 2024 December 31, 2023 Notional Fair value Notional Fair value amount Assets Liabilities amount Assets Liabilities Interest rate swaps 254,969,033 32,172 (11,129) 248,318,596 14,753 (4,386) Exchange rate swaps 139,026,375 1,318,613 (922,071) 79,142,406 726,267 (501,555) Exchange rate forwards 30,687,855 919,113 (847,959) 43,718,277 578,565 (473,145) Precious metal swaps 4,010,073 168,443 (9,620) 4,845,954 218,193 – Option contracts 1,912,240 9,843 (9,104) 1,132,332 13,403 (11,526) Total 430,605,576 2,448,184 (1,799,883) 377,157,565 1,551,181 (990,612) 2 Items of liabilities As of the end of the Reporting Period, the total liabilities of the Group amounted to RMB1,733,717 million, representing an increase of 713% as compared to the end of the previous year, which was mainly due to an increase in total liabilities led by the increase in deposits from customers and debt securities issued The following table sets forth the composition of total liabilities of the Group as of the dates indicated: (Unit: RMB’000) December 31, 2024 December 31, 2023 Increase Proportion Proportion (decrease) Amount (%) Amount (%) (%) Borrowing from the central bank 121,378,473 700 133,787,964 827 (928) Deposits from banks and other financial institutions 150,561,544 868 158,762,222 981 (517) Financial liabilities measured at fair value through profit or loss 171,916 001 – – N/A Placements from banks and other financial institutions 23,144,745 134 34,920,012 216 (3372) Derivative financial liabilities 1,799,883 010 990,612 006 8169 Financial assets sold under repurchase agreements 57,818,338 334 66,634,253 412 (1323) Deposits from customers 1,067,561,795 6158 934,593,879 5775 1423 Income tax payable (621,775) (004) 849,131 005 (17322) Debt securities issued 290,863,182 1678 267,923,368 1656 856 Lease liabilities 3,722,824 021 4,115,588 025 (954) Other liabilities 17,316,375 100 15,754,106 097 992 Total liabilities 1,733,717,300 10000 1,618,331,135 10000 713 Note: As at December 31, 2024, borrowing from the central bank of RMB121,378,473,000 included the principal amount at a fixed interest rate of RMB119,873,000,000, and the interest payable on the borrowing from the central bank of RMB1,505,473,000 CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 27 3 Total equity As of the end of the Reporting Period, the total equity of the Group amounted to RMB110,125 million, representing a decrease of RMB4,278 million as compared to the end of the previous year, primarily due to the decrease in other equity instruments as a result of the redemption of undated capital bonds of RMB20,000 million issued in prior years and the issuance of new undated capital bonds of RMB11,000 million during the Reporting Period, coupled with the increase in net profit for the current year The following table sets forth the composition of the items in the Group’s total equity as of the dates indicated: (Unit: RMB’000) Increase December 31, December 31, (decrease) 2024 2023 (%) Share capital 17,762,000 17,762,000 – Other equity instruments 11,000,000 19,961,604 (4489) Other reserves 1,732,924 (2,718,089) N/A Capital reserve 10,689,841 10,732,077 (039) Surplus reserve 7,929,133 7,828,688 128 General reserve 21,106,229 20,678,511 207 Retained earnings 39,904,701 40,157,910 (063) Total 110,124,828 114,402,701 (374) 4 Off-balance sheet items that may have a significant impact on the financial position and operating results The off-balance sheet items of the Group are set out in “Audit Report and Financial Report: Notes to the Consolidated Financial Statements” in this annual report (III) Items in the Consolidated Statement of Cash Flows During the Reporting Period, net cash flow generated from operating activities of the Group amounted to RMB92,909 million, of which cash inflow generated from changes in operating assets amounted to RMB1,080 million, cash inflow generated from changes in operating liabilities amounted to RMB88,227 million Net cash flow used in investing activities of the Group amounted to RMB43,307 million, of which proceeds from disposal sale and redemption of investments amounted to RMB765,126 million, purchases of investments amounted to RMB809,167 million Net cash flow generated from financing activities of the Group amounted to RMB5,113 million, of which proceeds from debt securities issued amounted to RMB422,032 million, repayment of debt securities issued amounted to RMB400,724 million CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 29 VI ANALYSIS OF CAPITAL ADEQUACY RATIOS In calculating its capital adequacy ratios, the Bank considers itself and the financial institutions it invests directly or indirectly in compliance with the Rules on Capital Management of Commercial Banks (《商業銀行資本管理辦法》) The Group and the Bank calculate the capital adequacy ratios for each tier as at December 31, 2024 in accordance with the Rules on Capital Management of Commercial Banks (《商業銀行資本管理辦法》) and the relevant requirements and the capital adequacy ratios for each tier as at December 31, 2023 in accordance with the Capital Rules for Commercial Banks (Provisional) (《商業銀行資本管理辦法（試行）》) and the relevant requirements The items involved are as follows: (Unit: RMB’000) December 31, 2024 December 31, 2023 The Group The Bank The Group The Bank Core tier 1 capital 99,124,828 98,686,728 94,441,097 94,223,505 Core tier 1 capital regulatory deductions (2,766,797) (4,983,084) (5,635,246) (7,839,745) Net core tier 1 capital 96,358,031 93,703,644 88,805,851 86,383,760 Other tier 1 capital 11,000,000 11,000,000 19,961,604 19,961,604 Net tier 1 capital 107,358,031 104,703,644 108,767,455 106,345,364 Tier 2 capital 26,857,792 26,857,792 17,051,284 17,051,284 Tier 2 capital regulatory deductions – – – – Net capital 134,215,823 131,561,436 125,818,739 123,396,648 Capital adequacy ratio Note (%) 1163 1142 1158 1137 Tier 1 capital adequacy ratio (%) 930 909 1001 980 Core tier 1 capital adequacy ratio (%) 835 813 817 796 Note: Capital adequacy ratio equals net capital/risk-weighted assets*100% See table below for details of risk-weighted assets The Group and the Bank measure risk-weighted assets as at the end of 2024 in accordance with the Rules on Capital Management of Commercial Banks (《商業銀行資本管理辦法》), among which, credit risk-weighted assets are calculated using the method of weighting, market risk-weighted assets are calculated using the simplified standardized approach, and operational risk-weighted assets are calculated using the standardized approach The Group and the Bank measure risk-weighted assets as at the end of 2023 in accordance with the Capital Rules for Commercial Banks (《商業銀行資本管理辦法（試行）》), among which, credit risk-weighted assets are calculated using the method of weighting, market risk-weighted assets are calculated using the standardized approach, and operational risk-weighted assets are calculated using basic indicator approach (Unit: RMB’000) December 31, 2024 December 31, 2023 The Group The Bank The Group The Bank Credit risk-weighted assets 1,091,241,849 1,089,229,765 1,027,021,912 1,025,855,790 Of which: On-balance sheet credit risk 998,590,937 996,578,853 955,466,268 954,300,146 Off-balance sheet credit risk 89,201,282 89,201,282 68,502,384 68,502,384 Counterparty credit risk 3,449,630 3,449,630 3,053,260 3,053,260 Market risk-weighted assets 18,214,061 18,214,061 9,964,652 9,964,652 Operational risk-weighted assets 44,987,310 44,660,881 49,660,324 49,392,011 Total risk-weighted assets 1,154,443,220 1,152,104,707 1,086,646,888 1,085,212,453 CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 31 IX LOAN QUALITY ANALYSIS During the Reporting Period, the Bank put greater efforts in non-performing asset disposal through means such as cash collection, write-off of bad debts, bankruptcy reorganization and transfer, thus strengthening asset quality, which remained steady in general The Bank controlled the proportion of pure credit platform business by downsizing consumer online loans and reduced high-risk assets to a greater extent, resulting in rapid reduction in personal loan assets The high-risk assets of personal loans were disposed rapidly, resulting in a more optimal asset structure and stronger risk management capability The overall risk exposures in personal loan business were controllable Looking forward, the Bank will continuously increase the measures for non-performing asset disposal, put greater efforts in disposal of non-performing assets, and continuously lower various non-performing indicators (I) Distribution of Loans by Five-category Classification (Unit: RMB’000) December 31, 2024 December 31, 2023 Proportion Proportion Amount (%) Amount (%) Normal loans 893,947,790 9546 887,214,612 9512 Special mention loans 26,063,028 278 28,871,484 310 NPLs 16,479,873 176 16,558,339 178 Of which: Substandard loans 5,601,532 060 5,531,097 059 Doubtful loans 2,363,425 025 5,572,424 060 Loss loans 8,514,916 091 5,454,818 059 Gross loans and advances to customers 936,490,691 10000 932,644,435 10000 (II) Loan Migration (Unit: %) December 31, 2024 December 31, 2023 December 31, 2022 Migration rate of normal loans 222 111 133 Migration rate of special mention loans 1630 833 1993 Migration rate of substandard loans 5126 6389 7456 Migration rate of doubtful loans 3016 3949 1565 Note: The above figures do not include asset transfers (III) Distribution of Loans and NPLs by Product Type (Unit: RMB’000) December 31, 2024 December 31, 2023 Proportion NPL NPL ratio Proportion NPL NPL ratio Amount (%) amount (%) Amount (%) amount (%) Corporate loans and advances 654,736,013 6991 7,267,965 111 566,740,133 6077 10,418,084 184 Of which: Short-term corporate loans 263,760,443 2816 3,534,104 134 220,021,985 2359 5,307,835 241 Medium and long-term corporate loans 390,975,570 4175 3,733,861 096 346,718,148 3718 5,110,249 147 Discounted bills 59,727,587 638 – – 93,160,915 999 13,524 001 Of which: Bank acceptance bills 58,738,511 627 – – 92,640,303 993 – – Commercial acceptance bills 989,076 011 – – 520,612 006 13,524 260 Personal loans 222,027,091 2371 9,211,908 415 272,743,387 2924 6,126,731 225 Of which: Residential and commercial housing loans 149,664,942 1598 2,963,768 198 159,565,607 1711 1,547,054 097 Personal consumption loans 37,512,214 401 4,638,758 1237 75,937,149 814 3,372,526 444 Personal business loans 34,849,935 372 1,609,382 462 37,240,631 399 1,207,151 324 Gross loans and advances to customers 936,490,691 10000 16,479,873 176 932,644,435 10000 16,558,339 178 CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 33 (VII) Distribution of Loans by Overdue Period As of the end of the Reporting Period, the overdue loans amounted to RMB26,15423 million, representing a decrease of RMB2,73309 million as compared to the end of the previous year (Unit: RMB’000) December 31, 2024 December 31, 2023 Proportion Proportion Amount (%) Amount (%) Overdue within three months 10,911,339 116 13,057,400 140 Overdue more than three months to one year 6,095,515 065 5,455,126 059 Overdue more than one year to three years 6,374,601 068 7,750,545 083 Overdue more than three years 2,772,773 030 2,624,251 028 Total overdue loans 26,154,228 279 28,887,322 310 Gross loans and advances to customers 936,490,691 10000 932,644,435 10000 (VIII) Loans to Ten Largest Customers Who Are Single Borrowers (Unit: RMB’000) December 31, 2024 NPL % of net % of Borrowers Industry Amount amount capital base gross loans Customer A Lease and business services 7,848,950 – 585 084 Customer B Lease and business services 7,093,890 – 529 076 Customer C Construction 5,570,000 – 415 059 Customer D Lease and business services 4,198,360 – 313 045 Customer E Lease and business services 4,168,900 – 311 045 Customer F Lease and business services 4,150,000 – 309 044 Customer G Lease and business services 4,139,095 – 308 044 Customer H Lease and business services 3,774,500 – 281 040 Customer I Lease and business services 3,541,700 – 264 038 Customer J Lease and business services 3,519,919 – 262 038 Total – 48,005,314 – 3577 513 (IX) Restructured Loans Restructured loans refer to loans for which the Bank has made adjustments to the repayment terms of the loan contract due to the borrower’s financial difficulties in accordance with the requirements of the Rules on Risk Classification of Financial Assets of Commercial Banks As of the end of the Reporting Period, the balance of restructured loans amounted to RMB1,6205283 million, representing an increase of 6888% as compared to the end of the previous year (X) Repossessed Assets As of the end of the Reporting Period, the Bank had no repossessed assets CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 35 (XIV) Large Exposure The Bank has strictly implemented the regulatory requirements of the Rules on Large Exposure of Commercial Banks (《商業銀行大額風險暴露管理辦法》) and continuously enhanced the management of large exposures The Bank has established and improved the organizational structure for the management of large exposures, and built an operating mechanism that is mutually connected and effectively checks and balances It focuses on large customer risk exposures, and strictly controls the gateway of credit approval Adhering to the philosophy of moderate credit line and effective management for credit approval, the Bank strives to gain better control over new credit line approval, strictly monitors new risk exposures of customers with large outstanding credit, and improves the coordinated monitor system for customers with large credit in headquarters and branches During the Reporting Period, all large exposures indicators of the Bank met expected internal and external requirements X MAIN BUSINESS OPERATION AND MANAGEMENT (I) Corporate Banking Business During the Reporting Period, taking serving the national strategic objectives and the real economy as its fundamental purpose, with technology finance, green finance, inclusive finance, pension finance, digital finance and other fields as key development direction, and centering on the operational philosophy of “putting customer as focus, taking market as direction, treating specialized business as major operation and gaining comprehensive income as goal”, the corporate banking focused on the establishment of “an industrial bank, a transaction bank and a light-model bank”, enhanced regional strategic support and branch factory construction, continuously optimized products and services, strengthened risk control capability, and improved digitalized operation management standards, striving to achieve high-quality development of the corporate banking business Customer development During the Reporting Period, the corporate banking focused on industry strategic customer group, basic and special customer groups, government and institution customer groups, and regional key customer group, further reinforcing its customer base In terms of the industry strategic customer group, the corporate banking optimized and upgraded the strategic customer service model, clarified the stratification criteria for strategic clients, and delved deeper into the foundation for marketing cooperation, so as to improve the service level and value contribution for strategic customers In terms of the basic and special customer groups, the corporate banking continued to strengthen the refined management of corporate customers by gradually establishing a digital system for corporate customer operation and management In terms of the government and institution customer groups, the corporate banking expanded its reach to customers in the finance, education, healthcare, housing and construction, government affairs, and livelihood sectors by closely monitoring customer needs and providing high-quality services In terms of the regional key customer group, the corporate banking made active response to the national regional development strategy, gave great support for the construction of the Beijing-Tianjin-Hebei region, the Yangtze Economic Belt, the Chengdu- Chongqing Economic Circle and the Guangdong-Hong Kong-Macao Greater Bay Area, empowering regional economic development As of the end of the Reporting Period, the Bank had a total of 118,960 corporate customers, representing an increase of 1283% as compared to the end of the previous year, and a total of 71,754 effective customers, representing an increase of 1160% as compared to the end of the previous year Liability business During the Reporting Period, the corporate banking continued to promote steady growth in liability size and optimized the liability structure to enhance the overall quality and efficiency of the liability business It placed emphasis on expanding customer sources, refined the hierarchical management of customers, strengthened the breadth and depth of customer cooperation, and consolidated the deposit base It also improved the product structure spectrum, focused on scenario and channel construction, and broadened the channels for deposit growth The corporate banking paid close attention to the changes in macroeconomic policies, interbank updates and regulatory environment in order to make dynamic adjustments to its business strategies, strengthen liability cost management and guide the reduction in interest payment costs As of the end of the Reporting Period, the gross corporate deposits amounted to RMB655,434 million, representing an increase of RMB89,267 million or 1577% as compared to the end of the previous year CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 37 Strategized shipping finance and promoted the integration of port, industry and city Taking the lead in establishing a shipping center, the transaction banking focused on policy guidance to actively establish an ecosystem for shipping finance, focused on industrial agglomeration to support port-specific industries, and focused on resource coordination by hosting the “Conference on Promoting High-Quality Integrated Development of Port, Industry and City”, while facilitating the signing of comprehensive strategic cooperation agreements between the head office and branches of China Bohai Bank and the head office and branches of the China Export & Credit Insurance Corporation It created the “CBHB Credit Insurance Easy (渤銀信保易)” brand to support Chinese enterprises in “going global” Expanded transaction scenarios and engaged in chain finance The transaction banking developed the “Boyin e-Chain (渤銀 e 鏈)” supply chain financial service system, with RMB257,191 million granted for various supply chain products, a year-on-year increase of 3669% It developed and launched the online version of “New-Generation System for Domestic Letters of Credit”, leading its industry peers in terms of functionality It expanded solutions for various scenarios such as letters of credit for electricity tariffs, equipment and fine wine It newly developed the “CBHB Haina Pool (渤銀海納池)” to empower corporate asset and liability management, and serving customers across the entire industry and industrial park development with the “New-Generation Corporate Account Overdraft” service, granting a total of RMB64,900 million Focused on basic settlement and retained satisfactory deposits The transaction banking launched scenario settlement products such as “CBHB E-Commerce Link (渤銀 E 商通)”, “CBHB E-Enterprise Link (渤銀 E 企通)” and “CBHB BoPay (渤銀渤聯付)”, and continued to facilitate the fund pool business of the group, with scenario settlement deposit balances reaching RMB41,000 million, serving 705 customer accounts It created the “CBHB Treasury (渤銀司庫)” brand to help enterprises improve their efficiency of financial resource allocation The new version of the corporate online banking won the “Best User Experience Award for Corporate Online Banking” at the China Financial Certification Authority Digital Finance Golden List Awards Promoted online bills and supported inclusive development The transaction banking introduced the “Instant Discount (秒貼)” product, with the direct bill discount turnover reaching RMB120 billion during the Reporting Period, representing a year-on-year increase of 120% The new-generation bill business served over 400 medium, small and micro enterprises, handling a discount size of more than RMB50,000 million During the Reporting Period, the “New-Generation Bill” was awarded the title of “2023 Excellent Acceptance Institution, Excellent New-Generation Bill System Business Promotion Institution” by the Shanghai Commercial Paper Exchange Optimized cross-border services and established brand reputation The transaction banking continued to enrich its product offering and service “toolbox”, focused on making breakthroughs of the scenarios of electronic customs duty payment and guarantee letters, and established the “CBHB Tariff Ease (渤銀關稅通)” brand It launched coverage for all customs districts where the Bank’s branches are located at once, filling a long-standing gap and surpassing industry peers It constructed comprehensive product systems such as “CBHB Global Fast Payment (渤銀全球速匯)” and “CBHB Credit Insurance Easy (渤銀信保易)”, providing full- journey cross-border financial services covering domestic and international, local and foreign currency, online and offline, and investment and commercial banking In 2024, the industry-first “CBHB Global Fast Payment (渤銀全球速匯)” won the “2024 Bankers’ Outstanding Case for Transaction Banking Innovation of the Year” award from The Chinese Banker magazine for its unique functions and excellent customer experience CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 39 Inclusive finance business During the Reporting Period, the Bank thoroughly implemented the national decision and deployment on inclusive finance, strictly implemented regulatory policy requirements, improved the quality and efficiency of financial services for small and micro enterprises, and promoted the expansion, coverage, cost reduction and quality improvement of inclusive finance business, thereby solidly advancing the priority on inclusive finance Adhering to the development strategy of “doing small, doing well, and doing real”, with the development philosophy of empowering “digital, platform, scenario and ecology” through technology, the Bank explored the establishment of a new model for digital inclusive finance, embedding inclusive financial services into various scenarios of production and operation of small and micro enterprises, and comprehensively facilitating the high-quality development of financial services for inclusive small and micro enterprises The Bank took the initiative to engage with small and micro enterprise entities, focusing on enhancing the precision of services in key areas Aiming at the business domains of “two zones, two chains and one ecosystem”, and focusing on key customer groups such as core corporate supply chains, technology innovation enterprises, platform-based enterprises and “housing mortgage” customers, the Bank established a joint meeting mechanism to support the implementation of regional characteristic inclusive ecological scenario projects, thereby improving the accessibility and quality of financial services for small and micro enterprises The Bank accelerated the iteration and innovation of its key products It redesigned its inclusive financial product system, and developed an assembly line for online inclusive finance products that spans the entire process of pre-lending, during-lending and post-lending based on the principles of full-process modularization, parameterization and configurability It also accelerated the construction of digital inclusive finance, and continued to innovate and optimize its online products The Bank switched its customer acquisition model from scattered orders to batch processing, switched its marketing model from passive to active, and switched its product model from offline to online, which significantly enhanced service efficiency and customer experience, and facilitated the inclusive finance service brand building with Bohai characteristics As of the end of the Reporting Period, the balance of inclusive loans of the Bank was RMB55,271 million, representing an increase of RMB3,800 million as compared to the end of the previous year; the number of inclusive loan accounts was 129,465, representing an increase of 13,800 as compared to the end of the previous year; and the average loan execution rate was 432% (II) Retail Banking Business During the Reporting Period, the retail banking accelerated its transformation into “account-oriented bank”, “wealth management bank” and “ecosystem-based bank” Guided by customer needs, it strived to enrich and optimize its product portfolio and increase its scale of business Guided by high-quality development, it significantly optimized its customer and business structure Driven by scenario-based ecosystem cooperation, it continuously broadened and extended its service boundaries It leveraged digital technology engine to deepen customer professional management, and strengthened asset allocation and value-added service capabilities, thereby promoting the steady development of retail banking As of the end of the Reporting Period, the balance of retail deposits amounted to RMB212,275 million, representing an increase of RMB11,273 million during the year The total number of retail customers was 8,202,600, representing an increase of 490,100 during the year CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 41 Asset business During the Reporting Period, the retail asset business firmly followed the national credit policy, and focused on satisfying the diversified credit needs of customers to continuously improve customer service capabilities Firstly, the Bank greatly optimized its retail asset structure, by reducing inefficient assets while increasing the allocation of high-quality assets Secondly, adhering to innovation leadership in products and services, the Bank granted an increasing number of housing mortgage loans so as to fully support residents’ demand for rigid and improvement housing loans Thirdly, it resolutely accelerated the development of personal business loans, providing financial support to small and micro enterprises as well as individual business owners, and made every effort to enhance the quality and efficiency of inclusive financial services Fourthly, the Bank continuously optimized the functions of its self-operated consumer loans, thereby supporting the expansion of domestic demand and the promotion of consumption As of the end of the Reporting Period, the personal loan balance was RMB222,027 million Credit card business During the Reporting Period, the Bank encouraged the return of credit card business to its origins, and promoted the change of the business philosophy of credit card business to improve the “service functionality” Focusing on its high-quality consumers, the Bank made credit cards an effective carrier to enhance the stickiness of high-quality retail consumers In response to China’s current trend, the Bank launched a new Hi Card Credit Card “Shan Hai Jing” (山海經) to enhance the brand influence As of the end of the Reporting Period, the Bank had issued a total of 1,265,200 credit cards and achieved the loan scale of RMB3,886 million (III) Financial Market Business During the Reporting Period, closely aligned with the requirements of the Central Financial Work Conference to “promote the high-quality development of the bond market” and “serve as the main force in supporting the real economy and the anchor for maintaining financial stability”, the Bank’s financial market business implemented the work requirements of the Bank’s transformation and revitalization of high-quality development and the “Ten Special Tasks”, focused on investment and research capabilities, took trend management as the starting point, and followed the guidance of customer service, strengthened the bond business model and product innovation, firmly established the liquidity bottom line, made steady progress in the scale of various businesses, and greatly improved the transaction ranking The Bank adhered to the coordinated growth in customer management, provided one-stop comprehensive financial services including currency, bonds, foreign exchange, precious metals, interest rates, exchange rates and credit derivatives, and effectively served the real economy development Bond business Facing the complicated and changeable bond market, the Bank strengthened the bond business development, flexibly utilized multi-strategy portfolio in asset allocation, actively explored bond trading value, earnestly fulfilled its obligation as a comprehensive market maker in the inter-bank bond market, enriched the variety of market-making transactions, and steadily improved comprehensive income from bonds During the Reporting Period, the Bank’s “Bond Center” coordinated the whole Bank’s bond business development, met customers’ direct financing and indirect financing needs through comprehensive financial service schemes, actively participated in projects such as technology finance, green finance, inclusive finance, pension finance and digital finance, and strengthened financial support for key economic areas so that the Bank could elevate the customer level and comprehensive income During the Reporting Period, the trading volume of the Bank’s bond business exceeded RMB534 trillion, representing an increase of 4586% over the previous year The Bank won the “Market Influencer of the Year”, “Market Innovator of the Year”, “X-Lending Star in January, August and December”, “X-Lending Active Institution from January to December”, “Star of X-Bond Spread Trading Strategy in February”, “Best X-Bargain Performance Award in March”, “Rising Star of iBean Derivatives in May”, “Star of X-Bargain Interest Rate in September” and other awards from China Foreign Exchange Trade System (CFETS) The “CBHB Preferred Tianjin Local Government Bond Basket” was recognized as “Active Basket” in April and July and “Quotation Star” in July by CFETS, respectively The “CBHB Tianjin Local Government Green Bond Basket” was recognized as “Active Basket” in November CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 43 Interbank customer management During the Reporting Period, the Bank solidly promoted the integrated interbank customer management By strengthening the application of customer territorial management and classification and stratification, the Bank kept building customer KYP profiles to continuously improve the average contribution of interbank customers During the Reporting Period, the Bank achieved a coverage rate of 8679% of target territorial interbank customers, and 6497% penetration rate of diversified products At the same time, the Bank promoted the construction of interbank customer manager team, improved the effectiveness of the financial interbank customer marketing platform, and implemented iterative upgrades to the interbank online banking system, so as to continuously enhance the digital management ability and improve the professional management level Wealth management business During the Reporting Period, the Group continuously enriched wealth management product types, optimized product functions and provided customers with quality wealth management services The wealth management subsidiary of the Bank actively expanded the agency sales channels outside the bank and broadened the asset management customer base It had reached agency sales cooperation with 52 institutions During the Reporting Period, the Group issued 418 wealth management products with a total sales amount of RMB444,803 million As of the end of the Reporting Period, the Group had 349 wealth management products, with a balance of RMB173,549 million, of which net-worth wealth management products accounted for 9556% Among the wealth management products, closed-end products accounted for 5113%, and open- end products accounted for 4887% The assets of wealth management products were mainly allocated in the fixed income category, of which bonds, bank deposits, non-standardized debts, public funds and equity assets accounted for 5576%, 1621%, 1434%, 320% and 244% respectively, while the remaining assets, including bonds purchased under resale agreements and interbank deposit, accounted for 805% (IV) Online Financial Business During the Reporting Period, the Bank resolutely implemented the decisions and deployments of the Party Central Committee regarding the development of digital finance, adhered to the philosophy of serving the people through finance, and accelerated the transformation of its online financial business from function construction to traffic management Focusing on the positioning of the three major banks in the retail business and realizing new breakthroughs in the construction of the two core platforms In 2024, the Bank’s revamped official website (wwwcbhbcomcn) made its debut, featuring an industry- leading split-screen layout, card-based zoning, and a multi-dimensional navigation system to achieve a structural overhaul The upgrade introduced intelligent search, barrier-free services, and multi-terminal adaptation, among other digital and intelligent functionalities, to enhance user experience CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 45 During the Reporting Period, adhering to the guidance of Party building, and focusing on the “Ten Actions”, the internal development of the “Three Points on Quantity and Quality” and the external support of the “Three Upgrades”, the Bank worked on financial management and strengthened supportive guarantees, thus securing and supporting the Bank’s operation and development The Bank improved comprehensive budget management, continued to enhance resource allocation, and optimized the allocation system with economic value added as the core Focusing on enhancing the management on revenue generation, the Bank regularly analyzed the effectiveness of revenue generation and monitored the effective implementation of various revenue generation measures Adhering to the principle of “all costs are controllable”, the Bank proactively implemented various cost reduction and efficiency enhancement works through establishment of price management system, reasonable control on project investments, reduction in expenses for organization construction and other measures Hence, various costs were effectively under control The Bank continued to improve the quality of accounting information to ensure that financial condition and operating results can be truly, completely and accurately reflected It also optimized the value analysis, result analysis and profitability analysis functions of the management accounting system, thereby providing data in supporting operating decisions In order to prevent financial management risks, the Bank implemented financial supervision and management and formulated innovative expense management measures (VI) Information Technology Construction During the Reporting Period, the Bank focused on serving the national strategic objectives and the real economy and Tianjin’s “Ten Actions”, took the initiative to promote the “five priorities”, and improved the quality and enhanced efficiency of digital finance Through cloud computing, artificial intelligence, blockchain and big data technologies, the Bank continued to enhance its independent control over key core technologies, and empowered business development and product innovation through the dual engines of digital technology and data elements, thereby supporting the real economy and achieving high-quality development The Bank fully recognizes the strategic significance of financial standardization During the Reporting Period, the Bank actively implemented relevant requirements for standardization in the financial sector, and has formulated the Work Plan for Strengthening the Implementation of Standards in the Financial Sector of China Bohai Bank It also improved the mechanism for benchmarking and compliance of its financial products and services, conducted self-evaluation of standardization in online banking and smart devices, and effectively implemented standard self-declaration and disclosure During the Reporting Period, the Bank continued to optimize its technology talent system, and strengthened the cultivation and reserve of supporting technology talents As of the end of the Reporting Period, the Bank had 1,512 technology personnel, accounting for 110% of its contract employees Centering on the “Talent Pool Construction” initiative, the Bank accelerated the cultivation of digital talents with the goal of improving the quality and efficiency of technology empowerment, actively driving digital finance innovation with talent innovation, thereby providing strong talent support for promoting digital transformation During the Reporting Period, the Bank made every effort to promote high-quality development in terms of information technology construction, with an investment in technology of RMB1,337 million The Bank strengthened and empowered its digital finance operation, built up digital finance infrastructure with high standards, and accelerated the development of the new-generation distributed core system, the new- generation Integrated Funds Business Management System and the Data Lake-Warehouse Integrated System Fully leveraging on the dual drivers of digital technology and data, the Bank allocated more resources on loans for key digital enterprises such as those using specialized and sophisticated technologies to produce novel and unique products, and further improved the construction of customer tagging system of “Getting All Around with Mobile (一機走天下)” and industry chain layout for corporate business With the introduction of Mobile Banking 70, and new versions of portal system and Bohai on the Palm (掌上渤海), the Bank further facilitated the construction of integrated marketing system for retail digital marketing and operation platforms The agency funds transaction system for financial market (phase I) and quantitative transaction system were put into operation, which facilitated the digital operation The Bank intended to build up systems for large models and digitalize intelligent risk management report for retail operation At the same time, the Bank promoted application scenarios such as Q&A Assistant, and facilitated the development of digital productivity and intelligent upgrades with the use of large model technology, providing customers with convenient, intelligent and secure financial service experiences while helping the Bank enhance the quality and efficiency of its financial services to the real economy in all aspects CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 47 The Bank has senior management personnel (the chief risk management officer) in charge of risk management line, who shall be responsible for leading the relevant departments of the risk management line to carry out work under the risk management framework of the Bank The chief risk management officer maintains independence and can directly report the overall risk management to the Board of Directors The Bank has established a risk prevention system consisting of three lines of defense against each main risk to which it is exposed The first line of defense of risk management is formed by various business departments, branches and sub-branches, which are directly responsible for carrying out their risk management functions The second line of defense is departments of risk management line, Assets and Liabilities Management Department, Internal Control and Compliance Department, the General Office (Public Relations Department) and Office of the Board of Directors, which assume responsibilities for formulating policies and procedures, supervising and managing risk The third line of defense of risk management is the Audit Department, which assumes audit responsibilities for the performance of the first and second lines of defense (II) Credit Risk During the Reporting Period, the Bank practiced the risk management culture and philosophy featuring “comprehensive, proactive, agile and effective (全面、主動、敏捷、到位)”, and comprehensively improved its risk management capabilities, thereby achieving healthy and stable asset quality, as well as steady and controllable credit risks The first is to consolidate asset quality The Bank firmly tightened the chord of risk prevention and control and guarded the bottom line of avoiding major risks We continued to excel in the collection and resolution of key monitored assets and set up a special team for risk resolution of large key monitored customers We reinforced the working mechanism for the disposal of non-performing assets, and upgraded the Asset Resolution Department at the head office to a first-tier department, managing it as a business development line The asset resolution departments at the branch level are assigned by the head office and are under vertical management by the head office We commenced the tracking and evaluation of designated group customers, developed a tracking list of large group customers, and delegated monitoring responsibilities to individuals We closely monitored the risks of large group customers, conducted real-time monitoring of sudden public opinion and abnormal business trends of large enterprise group customers, and widely collected and deeply analyzed customer risk information We continued to intensify efforts to recover and resolve non-performing assets, strengthened appraisal incentives and constraints to further stimulate the enthusiasm for working and innovation, and enhanced the quality and efficiency of risk resolution, thereby supporting the overall business development of the Bank As of the end of the Reporting Period, the Bank had an NPL ratio of 176%, representing a decrease of 002 percentage point as compared to the end of the previous year; the allowance coverage ratio was 15519%, and the allowance to gross loan ratio was 273%, which achieved the dual objectives of stabilizing asset quality and defending against expected credit risks The second is to strengthen basic management The Bank upgraded unified credit management and control, and successfully launched the unified comprehensive credit 30 system Building on the existing system functions, we extended the scope of integrated application for low-risk businesses, achieving three-in-one parallel application for group limits, customer limits, and business plans We added system application scenarios that treat a unique credit customer within the group as a single customer, and the entire process supports quick supplementation of image materials and a reuse mechanism for customer data In addition, we optimized 37 function points across various business scenarios and branch processes, significantly enhancing the adaptability of the Bank’s unified comprehensive credit management system While preventing multiple and excessive credit extensions, we fully ensured the efficiency of business application and approval processes Implementing a centralized risk management and control strategy, we continued to optimize resource allocation to support the real economy to maintain efficiency, prevent and control risks while improving quality, and guide capital allocation through credit approval to convey risk preferences and management requirements in pursuit of strict risk management and control We strengthened the promotion and implementation of regulatory systems, and continuously optimized and implemented proactive, reasonable, categorized, and dynamically adjusted credit strategies We persistently enhanced the supervision and monitoring of credit approvals, improved the management capabilities of credit approval, and elevated the quality and efficiency of credit approval We redesigned the risk control foundation for retail credit, supporting six major retail credit business segments, continuously optimized the retail risk governance structure and organizational system, refined retail risk management processes, and iteratively upgraded the retail risk management toolkit to develop a retail credit risk control system CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 49 In addition to effectively managing intraday positions, the Bank managed cash flow, balancing liquidity and profitability and ensuring safety payment and implementing integration management of local and foreign currency For medium- and long-term liquidity risk management, the Bank strengthened management measures on dynamic arrangement concerning maturity structure of assets and liabilities, price guidance, investment and financing strategy update and internal limit, implemented initiative supplementing of liabilities and adjustments to asset structure, realised an expanded stable source of capital and improved the maturity structure of assets and liabilities The Bank’s core indicators of liquidity risk mainly include liquidity ratio, liquidity coverage ratio, net stable funding ratio and liquidity matching rate To ensure that the core indicators are in line with the Bank’s risk appetite, the Bank has formulated a planning scheme with reference to the above indicator preferences and broken it down accordingly into the liquidity management scheme of each business The Bank’s internal limits on liquidity risk mainly include limits on debt securities pledged, liquidity support, settlement fund and mismatch limit, guiding various operating departments to manage liquidity risks in daily operation Enforcing the establishment and analysis of customer behaviour models, leveraging liquidity management models that use prudent assumptions on the Bank’s cash inflows and outflows from its assets and liabilities, and by monitoring, analysing and managing its compliance with regulatory indicators and internal limits, the Group has been able to maintain a sound liquidity position The Bank formulates investment guidelines and regularly assesses and adjusts its investment strategies for debt securities in light of actual risk management needs, clearly defines the ceiling for collateral bonds of businesses through internal limits This ensures the availability of sufficient quality liquid assets which are readily realisable, and structurally ensures the potential liquidity needs of the Bank are well taken care of The Bank focuses on the adjustment and optimisation of asset structure, and establishes a 3-level liquidity reserve system focusing on high liquidity assets such as cash, provision and interest rate debt, currency fund and bond fund, thus effectively fulfilling the liquidity risk management requirements under normal and emergency situation and meeting different payment requirements In addition, the Bank continues to expand its various debt channels, actively strengthens the degree of participation in the issuance of financial bonds, inter-bank customer relationship management and open market operations of the PBOC, expands interbank credit, builds up emergency fund reserves, attempts to expand the Bank’s medium- and long-term stable sources of liabilities, so as to improve the Bank’s financing ability under high liquidity pressure In order to cope with the potential impact arising from fluctuation of capital market and changes of macroeconomic environment, the Bank modifies stress testing scenarios and performs liquidity risk stress tests on a regular basis, including the test of cash flow gaps in the future 7 days, 30 days and 90 days and implementation of shortest lifetime management of the Bank by introducing the internal and external factors to test the Bank’s tolerance of liquidity risks under different stress scenarios through stimulation of decline in the price of marketable securities and outflow of deposits Also, the Bank monitors early-warning indicators daily, in consideration of its business size, complexity, level of risk and organisational structure, the Bank has emergency plans in place and explicit internal labour division and emergency procedures, and organises involved departments of head office and branches to launch crisis response exercises to ensure the liquidity under a crisis situation CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 51 (IV) Market Risk (Including the Interest Rate Risk in the Banking Book) The Bank, in strict compliance with relevant requirements such as the Guidance on Market Risk Management of Commercial Bank (《商業銀行市場風險管理指引》) and the Guidelines for the Management of Interest Rate Risk in the Banking Book of Commercial Banks (Revised) (《商業銀行銀行賬簿利率風險管理指引（修訂）》), implements an independent and comprehensive market risk (including interest rate risk in the banking book, similarly hereinafter) management mode The Board of Directors of the Bank is responsible for reviewing and approving the market risk management strategies, policies and procedures, so as to define the acceptable market risk level of the Bank The Assets and Liabilities Management Committee under the senior management is responsible for developing, regularly reviewing and overseeing the policies, procedures and workflows relating to market risk, and delineates market risk limits based on the risk appetite outlined by the Board of Directors The Assets and Liabilities Management Department at the head office is responsible for leading the establishment of the market risk identification, measurement, monitoring, reporting and control mechanisms to ensure that the market risk borne by the Bank is controlled within the risk appetite set by the Board of Directors The Bank’s market risk management is governed by a comprehensive, sound and prudent principle, and its overall goal is to control the market risk level within its tolerance, by organically combining the identification, measurement, monitoring and control of market risks with the Bank’s major operational and management activities including strategic planning, business decision-making and financial budgeting The Bank has formulated the Market Risk Management Policy and Administrative Measures for the Classification of Trading Books and Banking Books on this basis, actively implemented relevant market risk regulatory requirements, and established a market risk management system covering all aspects of identification, measurement, monitoring and control The Bank uses gap analysis, duration analysis, foreign exchange exposure analysis, and scenario analysis to identify and measure market risk, conducts regular stress tests, and monitors and controls risk through limit management In respect of managing the interest rate risk in the banking book, the Bank primarily applies measurement tools such as gap management, sensitivity analysis and duration analysis The Bank constantly optimizes a net interest margin analysis system that combines dynamic and static conditions On the basis of quantitative models and qualitative analysis, the Bank continuously reinforces the research and judgment of interest rate trends, so as to provide decision-making basis for tasks such as allocation of asset-liability structure As for trading books, the Bank mainly measures, manages and controls through basis point value, value at risk (VAR), position limit, duration and stop-loss limits to ensure that the anticipated income of the trading books matches the trading exposure In response to exchange rate risk, the Bank sets market risk limits, and effectively manages on-balance sheet foreign exchange risk exposure through derivative financial instruments, such as exchange rate swaps and exchange rate forwards, so as to keep the Bank’s total foreign currency exposures to a low level During the Reporting Period, the cumulative foreign exchange exposure ratio within the scope of consolidation of the Bank was 147% Both the interest rate risk and the exchange rate risk were kept within the internal limits and controllable on the whole The Bank’s market risk-weighted assets measurement uses the simplified standardized approach, and the market risk capital provision covers interest rate risk and specific risks in the trading books, as well as all exchange rate risks and commodity risks As the trading position is relatively small, the market risk capital occupation is low During the Reporting Period, the Bank had no significant and material market risk incidents CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 53 The Group’s exchange rate risk exposure The following table sets forth the distribution of the Group’s foreign exchange rate risk exposure as at December 31, 2024: (Unit: RMB’000) Other currencies USD equivalent equivalent RMB to RMB to RMB Aggregate RMB Total assets 1,746,497,951 80,229,173 17,115,004 1,843,842,128 Total liabilities 1,667,227,817 54,426,162 12,063,321 1,733,717,300 Net exposure amount of balance sheet 79,270,134 25,803,011 5,051,683 110,124,828 (V) Operational Risk Operational risk is the risk of losses due to problems with internal processes, staff and IT systems, and external events It includes legal risk but excludes strategic risk and reputational risk During the Reporting Period, the Bank initiated the optimization of its operational risk management system, defined the objectives and work plan for such optimization, and revised the operational risk management preferences and operational risk management policies Dedicated posts have been set up for operational risk management in the major departments at the head office The Bank determined the methodology for self- assessment of operational risk control, carried out a pilot assessment to explore the formation of a mechanism for the collection of data on operational risk losses, and completed the collection of data on operational risk losses It pushed forward the construction of the business continuity management system at the branch level to meet the standard, carried out the reorganization of the operational risk management system, and put the new operational risk management system into operation for trial run During the Reporting Period, the Bank had no material operational risk incidents (VI) Capital Management 1 Capital management structure, management objectives and management measures The Bank has established a sound capital management system The Board of Directors assumes the ultimate responsibility for capital management, determines the capital risk appetite, reviews and approves the capital management policies, and authorizes the senior management to exercise capital management functions The senior management authorizes the Assets and Liabilities Management Committee to specifically exercise the capital management functions and implement the capital planning and capital adequacy ratio objective management The Assets and Liabilities Management Department is responsible for daily capital management, building the capital management system and process, and taking the lead in implementing the requirements and objectives of the Board of Directors and the senior management on capital management, in order to ensure that the capital management meets the risk appetite requirements CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 55 During the Reporting Period, based on the overall requirements of comprehensive risk management and with reference to the management requirements in relation to Pillar 2 under the Rules on Capital Management of Commercial Banks (《商業銀行資本管理辦法》), the Bank continued to improve its internal capital adequacy assessment system with comprehensive risk coverage At present, the Bank has formed a relatively standardized governance structure, a supporting policy management system, a complete assessment process, a regular monitoring and reporting mechanism, and an internal audit system, which have met the external regulatory requirements and internal management needs The current internal capital adequacy assessment process has a sound governance structure and clear division of responsibilities in place to control various risks effectively The capital level is commensurate with the risk appetites and risk management level and the capital planning is compatible with the operating conditions, risk change trends, and long-term development strategies 3 The management plan for capital planning and capital adequacy ratio The Bank has formulated the Capital Management Plan of CHINA BOHAI BANK CO, LTD for 2023-2027 (《渤海銀行股份有限公司2023-2027年資本管理規劃》) in accordance with the relevant regulatory requirements and submitted it to the Board of Directors for consideration and approval Building on prudent and sound capital management objectives, and taking into account such factors as macroeconomic situation, regulatory policies and the Bank’s strategic transformation planning, risk appetites and risk assessment results, and financing capabilities, the Bank reasonably determined its internal management objective of capital adequacy ratio and prudently estimated the future capital supply and demand Adhering to the overarching principle of “endogenous capital replenishment as the main body and exogenous capital supplementation as the support”, fully considering the availability, timeliness and financing costs of various capital replenishment instruments, balancing short-term and medium-to-long-term capital needs while ensuring the long-term sustainability of different capital sources, the Bank has formulated medium- and long-term capital plans and capital replenishment plans in line with its development goals, aiming to continuously enhance its capital strength and achieve a more balanced capital structure, thereby ensuring robust risk resilience in the Bank’s capital framework The Bank determined the annual capital adequacy ratio management target within the framework of medium- and long-term capital planning, formulated the annual management plan and incorporated it into the bank-wide operation plan to ensure its compatibility with various business plans, and kept capital adequacy ratio at all levels in line with regulatory requirements and internal management targets through such means as dynamic monitoring, analysis and reporting of the capital adequacy ratio, optimization of the asset structure, improvement in the refined management, and timely issuance of capital instruments (VII) Information Technology Risk During the Reporting Period, in accordance with regulatory requirements such as comprehensive risk management and internal control, as well as internal requirements such as risk appetite and information technology risk management policies, the Bank implemented the financial technology transformation and development strategy, effectively performed its duties on the three lines of defense of information technology risk management, continuously improved information technology risk management methods and management mechanism, and continued to promote the rectification of information technology risk issues No material information system emergencies occurred The information technology risk was controllable as a whole, and the information technology risk preference had not been broken, providing a guarantee for the realization of the financial technology strategic goals During the Reporting Period, the Bank had no material information technology risk incidents CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 57 (IX) Strategic Risk During the Reporting Period, the Bank further specified its development path and accelerated the implementation of its strategies The strategic risks were stable and manageable in general No major strategic risk incidents occurred Clarifying strategic direction and further defining development path Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the Bank thoroughly studied and implemented the spirit of the 20th CPC National Congress and the second and third plenary sessions of the 20th CPC Central Committee, the spirit of the Central Financial Work Conference and the Central Economic Work Conference, and the spirit of the important speech made by General Secretary Xi Jinping during his visit to Tianjin Guided by the implementation of the “Three Points on Quantity and Quality” requirements, the Bank promptly revised its Fourth “Five-Year Plan” The revised plan further defines the strategic positioning and development direction of the Bank, ensuring seamless alignment with the next planning cycle while pursuing foresight and guidance for planning Focusing on overcoming challenges and accelerating implementation of strategies The Bank took enhancing quality as the premise and basis to strengthen the foundation of development, making the best use of existing resources as the urgent need and key to operate with greater agility, and optimizing allocation of new resources as the path and pillar to build up development momentum, striving to attain new achievements in high-quality growth (X) Reputational Risk Reputational risk refers to the risk of forming negative evaluation of the Bank by stakeholders, public or media due to the Bank’s behaviors, employees’ behavior or external events, etc, which in turn damages the brand value, has an adverse effect on the normal operation, and even affects market stability and social stability During the Reporting Period, the overall public opinion of the Bank was good, and no major reputation incident occurred During the Reporting Period, the Bank strictly implemented the supervisory requirements, continuously optimized the working mechanism and strengthened the whole process management, in order to actively improve the capability to manage reputational risk: firstly, it strengthened the control over public sentiment, and continuously improved the immediacy and accuracy of dynamic public opinion monitoring; adhered to the concept of prevention-oriented reputational risk management, it continuously increased efforts in public opinion investigation, judgment, warning and alerts, striving to improve forward-looking reputational risk management; it effectively reinforced the managing accountability of the party at the source of the incident, strengthened the risk prevention and control at source, and continuously improved the management quality and efficiency; it actively studied and determined the risks of public opinion and reported to the superior authorities in charge, and appropriately addressed various public opinion incidents; it strengthened the awareness towards reputational risk prevention throughout the Bank and enhanced the ability of the Bank in response to public opinion emergencies by organizing bank-wide reputational risk inspections and drills related to public opinion incidents Secondly, the Bank strengthened positive publicity The Bank proactively fulfilled its responsibilities as a state-owned joint-stock bank Focusing on the themes of “five priorities”, “Three Upgrades” and “Three Points on Quantity and Quality”, the Bank exhibited a “strong” momentum towards new development through multi-channel publicity in different forms including interview conducted by national and mainstream media, special interviews with the management of the Bank and forums and awards, and continuously enhanced its brand image and accumulated reputation capital CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 59 Secondly, the Bank has basically completed its strategic deployment in major provincial capitals and economically important cities across the country The Bank’s network is concentrated in the economically developed regions in China with a focus on supporting national strategies The branches and sub-branches in major free trade zones across the country and the Hong Kong Special Administrative Region can serve as a bridgehead for its international business and services to international customers Thirdly, the Bank has scarce resources such as a wealth management subsidiary and capital operation center licenses Business synergies are created within the Group The increasingly improved and diversified services to customers are conducive to the provision of multi-category, multi-channel, multi-chain and full-cycle integrated financial services solutions to various target customers of the Bank Fourthly, the Bank has become an H-share listed bank It has realized a supervision and improvement mechanism for the Bank’s corporate governance and information disclosure based on capital market rules, which is conducive to the continuous improvement of the corporate governance level of the Bank, expanding international vision and establishing an international brand XIII FUTURE DEVELOPMENT OUTLOOK (I) Economic, Financial and Banking Industry Outlook In 2025, the global trend towards trade protectionism is expected to intensify, potentially exacerbating the “decoupling” of global supply and industrial chains, increasing the risk of trade friction, and heightening geopolitical uncertainties The pattern of deglobalization is likely to deepen further in the coming years In China, the third plenary session of the 20th CPC Central Committee put an emphasis on an economic system reform, and aimed to further comprehensively deepen reforms and advance the modernization of China At the Central Economic Work Conference, it was proposed that in 2025, more proactive and effective macro policies should be implemented: the fiscal policy will be more active by raising the fiscal deficit rate, issuing more ultra-long special treasury bonds, and increasing the issuance and use of local government special-purpose bonds to expand the scope of investment and the use of project capital funds The scale of broad-based fiscal spending is expected to further increase Monetary policy will be appropriately accommodative, with timely cuts to required reserve ratios and interest rates, while leveraging the role of monetary policy instruments in adjusting both the monetary aggregate and structure, and working in concert with the fiscal policy to jointly promote economic recovery and improvement The role of household consumption as a growth engine is expected to significantly strengthen, and investment will continue to grow steadily While external uncertainties may disrupt exports, positive factors remain More proactive and effective macro policies will support the improvement of the business environment of the banking industry In 2025, the banking industry will maintain stable improvement in general In particular, the implementation of the package of new policies is expected to take effect, and the balance sheets of local governments, enterprises, and households are expected to see improvements successively, with the growth rate of asset size remaining generally stable and the asset structure being further optimized Banks will continue to face downward pressure on the pricing of its assets, while deposit rates are expected to decrease in line with policy rates As some medium- and long-term deposits gradually enter the re-pricing cycle, and high-cost interbank liabilities may be further regulated, the pressure on liability costs is expected to ease Considering both assets and liabilities, the declining net interest margins of the banking industry in 2025 is expected to be bottomed out and narrowed The policies in pursuit of steady growth will have a positive effect on the disposal and resolution of risks in key areas, and the local government debts and real estate risks are expected to be mitigated, while asset quality indicators for the banking industry are expected to remain relatively stable Along with the implementation of the policies to issue special treasury bonds and local government special-purpose bonds to supplement bank capital, the capacity of the banking industry in maintaining robust operations is expected to improve CHINA BOHAI BANK CO, LTD Annual Report 2024 Changes in Share Capital and Information on Shareholders 61 Changes in Share Capital and Information on Shareholders I CHANGES IN ORDINARY SHARES There was no change in the Bank’s ordinary shares during the Reporting Period The Bank’s ordinary shares are as follows: December 31, 2023 Changes during December 31, 2024 Number Percentage the Reporting Number Percentage (shares) (%) Period (shares) (shares) (%) Domestic Shares 11,561,445,000 6509 – 11,561,445,000 6509 H Shares 6,200,555,000 3491 – 6,200,555,000 3491 Total ordinary shares 17,762,000,000 10000 – 17,762,000,000 10000 Note: As of the end of the Reporting Period, the Bank had 75 Shareholders, including 11 holders of Domestic Shares and 64 holders of H Shares II SHAREHOLDING OF TOP 10 SHAREHOLDERS OF ORDINARY SHARES As of the end of the Reporting Period, shareholding of top 10 Shareholders of ordinary shares of the Bank was as follows: Number of shares Changes during held at the end of the Reporting Period the Reporting Period Shareholding Name of Shareholder Nature of Shareholder (shares) (shares) percentage (%) Class of shares TEDA Investment Holding Co, Ltd(2) State-owned legal person – 3,612,500,000 2034 Domestic Shares HKSCC Nominees Limited(3) Overseas legal person (105,500) 3,311,646,400 1864 H Shares Standard Chartered Bank (Hong Kong) Limited Overseas legal person – 2,888,555,000 1626 H Shares China Shipping Investment Co, Ltd State-owned legal person – 1,975,315,000 1112 Domestic Shares State Development & Investment Corp, Ltd State-owned legal person – 1,686,315,000 949 Domestic Shares China Baowu Steel Group Corporation Limited State-owned legal person – 1,686,315,000 949 Domestic Shares Oceanwide Industry Co, Ltd Domestic non-state-owned legal person – 1,370,706,739 772 Domestic Shares Tianjin Shanghui Investment Domestic non-state-owned legal person – 1,156,000,000 651 Domestic Shares Holding Company Limited Shine Enterprise (Tianjin) Co, Ltd Domestic non-state-owned legal person – 29,424,331 017 Domestic Shares Tianjin Xianghe Enterprise Management Domestic non-state-owned legal person – 14,712,166 008 Domestic Shares Consulting Co, Ltd Tianjin Firstwood Co, Ltd Domestic non-state-owned legal person – 14,712,166 008 Domestic Shares Notes: (1) The above information is prepared based on the share registration as of December 31, 2024 of the Bank’s Share Registrar (2) TEDA Investment Holding Co, Ltd confirmed that, as of the end of the Reporting Period, in addition to the 3,612,500,000 Domestic Shares of the Bank directly held, Jinlian (Tianjin) Finance Lease Co, Ltd, one of its affiliates, also held 48,438,000 H Share of the Bank through HKSCC Nominees Limited As such, TEDA Investment Holding Co, Ltd and its affiliate held a total of 3,660,938,000 shares of the Bank, representing shareholding of 2061% (3) The shares held by HKSCC Nominees Limited as agent are the total amount of shares in the Bank’s H-share investors’ accounts traded on the trading platform of HKSCC Nominees Limited CHINA BOHAI BANK CO, LTD Annual Report 2024 Changes in Share Capital and Information on Shareholders 63 (IV) State Development & Investment Corp, Ltd State Development & Investment Corp, Ltd was founded in 1995 The company has always adhered to serving the national strategy, regarded promoting structural optimization, building a better life, promoting technological innovation, and leading industrial upgrading as its mission, and played the leading and driving role of state-owned capital in important industries and key fields The company targets to build a worldclass capital investment company with a focus on four major business segments, namely “energy industry”, “digital/technology”, “people’s livelihood and health” and “industrial finance” Registered capital: RMB338 billion; legal representative: FU Gangfeng; Add: International Investment Building, No6-6 Fuchengmen North Street, Xicheng District, Beijing; controlling shareholder: SASAC; actual controller: SASAC As of the end of the Reporting Period, none of the shares of the Bank held by State Development & Investment Corp, Ltd had been pledged or frozen (V) China Baowu Steel Group Corporation Limited China Baowu Steel Group Corporation Limited, formerly known as “Shanghai Baosteel Group Corporation (上海寶鋼集團公司)” and “Baosteel Group Corporation (寶鋼集團有限公司)”, with its predecessor being Baoshan Iron and Steel (Group) Corporation (寶山鋼鐵（集團）公司), was founded on January 1, 1992, and is a legally established wholly state-owned corporation for which the SASAC performs the duties of investor on behalf of the State Council Its main business scope includes permitted projects: retail of publications; wholesale of publications (Projects that are subject to approval in accordance with laws shall only be carried out upon approval by relevant authorities The specific business projects are subject to the approval documents or permits of relevant authorities); general projects: investment activities with self-owned funds; investment management; asset management services invested with self-owned funds; corporate headquarters management; leasing of land use rights; non-residential real estate leasing; taxation services; human resource services (excluding employment intermediary activities and labor dispatch services); market entity registration agency; business agency services; undertaking outsourcing of file services; bidding agency services; big data services; business management consulting (Except for projects subject to approval in accordance with laws, business activities shall be conducted independently with the business licences in accordance with laws) Registered capital: RMB52791101 billion; legal representative: HU Wangming; Add: No1859 Shibo Avenue, China (Shanghai) Pilot Free Trade Zone; controlling shareholder: SASAC; actual controller: SASAC As of the end of the Reporting Period, none of the shares of the Bank held by China Baowu Steel Group Corporation Limited had been pledged or frozen (VI) Oceanwide Industry Co, Ltd Established in November 1992, Oceanwide Industry Co, Ltd is an important investment holding and property leasing platform under China Oceanwide Holdings Group Co, Ltd Registered capital: RMB24 billion; legal representative: SUN Houxing; Add: No 6602 Dongfeng East Street (inside the Oceanwide City Garden (泛海城市花園)), Weifang Hi-Tech Industrial Development Zone, Shandong Province; controlling shareholder: China Oceanwide Holdings Group Co, Ltd; actual controller: LU Zhiqiang As of the end of the Reporting Period, 1,370,706,739 shares of the Bank held by Oceanwide Industry Co, Ltd had been judicially frozen and on the freezing list China Oceanwide Holdings Group Co, Ltd, established in April 1988, mainly engages in investment in infrastructure projects and industries, capital operation & asset management, hotel & property management, among others Registered capital: RMB20 billion; legal representative: LU Zhiqiang; Add: 23/F, Building C, Minsheng Financial Center, No 28 Jianguomennei Avenue, Dongcheng District, Beijing CHINA BOHAI BANK CO, LTD Annual Report 2024 Changes in Share Capital and Information on Shareholders 65 Number of % of Nature of Long positions/short shares directly % of interest the relevant Name of Shareholder interest Class of shares positions or indirectly held in the Bank class of shares LU Zhiqiang (4) Interest in controlled Domestic Shares Long positions 1,370,706,739 772 1186 corporation HUANG Qiongzi (4) Interest of spouse Domestic Shares Long positions 1,370,706,739 772 1186 Tohigh Holdings Co, Ltd (4) Interest in controlled Domestic Shares Long positions 1,370,706,739 772 1186 corporation Oceanwide Group Co, Ltd (4) Interest in controlled Domestic Shares Long positions 1,370,706,739 772 1186 corporation China Oceanwide Holdings Group Co, Ltd (4) Interest in controlled Domestic Shares Long positions 1,370,706,739 772 1186 corporation Oceanwide Industry Co, Ltd Beneficial owner Domestic Shares Long positions 1,370,706,739 772 1186 Tianjin Shanghui Investment Holding Beneficial owner Domestic Shares Long positions 1,156,000,000 651 1000 Company Limited Shandong Gold Financial Holdings Group Beneficial owner H Shares Long positions 327,294,500 184 528 (HongKong) Co, Limited Yichang HEC Health Pharmaceutical Co, Ltd Beneficial owner H Shares Long positions 322,920,500 182 521 Notes: (1) The interests are held by TEDA Investment Holding Co, Ltd through its subsidiary Jinlian (Tianjin) Finance Lease Co, Ltd (2) Standard Chartered Bank (Hong Kong) Limited is wholly owned by Standard Chartered PLC, and therefore Standard Chartered PLC is deemed to be interested in all the shares held by Standard Chartered Bank (Hong Kong) Limited for the purpose of the SFO (3) China Shipping Investment Co, Ltd is wholly owned by COSCO SHIPPING Development Co, Ltd, and in turn owned by China Shipping Group Company Limited as to approximately 3928% China Shipping Group Company Limited is wholly owned by China COSCO Shipping Corporation Limited As such, each of China COSCO Shipping Corporation Limited, China Shipping Group Company Limited and COSCO SHIPPING Development Co, Ltd is deemed to be interested in all the shares held by China Shipping Investment Co, Ltd for the purpose of the SFO (4) Oceanwide Industry Co, Ltd is owned by China Oceanwide Holdings Group Co, Ltd and Oceanwide Group Co, Ltd as to 60% and 40%, respectively China Oceanwide Holdings Group Co, Ltd is owned by Oceanwide Group Co, Ltd and Tohigh Holdings Co, Ltd as to 98% and 2%, respectively Oceanwide Group Co, Ltd is wholly owned by Tohigh Holdings Co, Ltd Tohigh Holdings Co, Ltd is owned by Mr LU Zhiqiang as to 7714% As such, each of Mr LU Zhiqiang, Ms HUANG Qiongzi (spouse of Mr LU Zhiqiang), Tohigh Holdings Co, Ltd, Oceanwide Group Co, Ltd and China Oceanwide Holdings Group Co, Ltd is deemed to be interested in all the shares held by Oceanwide Industry Co, Ltd for the purpose of the SFO Save as disclosed above, the Bank is not aware of any other person (other than Directors, Supervisors and chief executives of the Bank) who has any interest or short position in its shares at the end of the Reporting Period which will be required to be recorded in the register kept under section 336 of the SFO VI ISSUANCE AND LISTING OF EQUITY SECURITIES During the Reporting Period, the Bank had not issued any new shares VII PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES OF THE BANK During the Reporting Period, the Bank and its subsidiary had no purchase, sale or redemption of any listed securities (including the sale of treasury shares) of the Bank As at the end of the Reporting Period, the Bank did not hold any treasury shares of the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 67 Total pre-tax remuneration from the Bank Remunerated during the by the Bank’s Time of Reporting Shareholders Date of joining the Period (RMB or their related Name Position Gender birth Bank Term of office ten thousand) (4) parties MU Binrui Independent non-executive director Male 195609 201805 201809–202501 3500 No ZHU Ning Independent non-executive director Male 197309 201912 202006–202501 3500 No WANG Chairman of the Board of Male 196602 201907 201911–202407 5250 No Chunfeng Supervisors Employees’ representative supervisor 201907–202410 QI Ershi External supervisor Male 195302 201604 201604–202406 5231 No DIAO Qinyi External supervisor Male 195503 201604 201604–202405 4930 No MA Shuming Employees’ representative supervisor Male 196610 201702 202108–202410 13682 No JIN Chao Vice president Male 197903 202106 202107–202407 9014 No Notes: (1) For the changes in the Directors, Supervisors and members of senior management of the Bank as of the date of this annual report, please refer to “(V) Changes in Directors, Supervisors and Members of Senior Management” in this section (2) Among the current Directors, Mr WANG Jinhong was nominated by Shareholder TEDA Investment Holding Co, Ltd; Mr AU Siu Luen was nominated by Shareholder Standard Chartered Bank (Hong Kong) Limited; Ms YUAN Wei was nominated by Shareholder China Shipping Investment Co, Ltd; Mr DUAN Wenwu was nominated by Shareholder State Development & Investment Corp, Ltd; Mr HU Aimin was nominated by Shareholder China Baowu Steel Group Corporation Limited; and Mr ZHANG Yunji was nominated by Shareholder Tianjin Shanghui Investment Holding Company Limited (3) During the Reporting Period, the Directors, Supervisors, and members of senior management of the Bank did not hold shares or stock options of the Bank (4) The amounts disclosed above exclude the remuneration received from the former employer (5) The deferred payment of performance remuneration policy applies to executive Directors (including the chairman), vice presidents and employees’ representative Supervisors (including the chairman of the Board of Supervisors) of the Bank in accordance with the related national requirements The deferred payment period is generally not less than three years The above amount includes the portion of the performance remuneration for previous years paid during the year (6) During the Reporting Period, the Bank paid a director allowance to independent non-executive Directors for the period from July 1, 2023 to June 30, 2024, and paid a supervisor allowance to external Supervisors for the period from January 1, 2023 to June 30, 2024 During the Reporting Period, employees’ representative Supervisors of the Bank did not receive a supervisory allowance for their duties as employees’ representative Supervisors (7) During the Reporting period, the Bank paid a total remuneration of RMB469,700 for the period from January 1, 2024 to December 31, 2024 to the assigned leader of discipline inspection team (8) Mr WANG Jinhong worked for the Bank during the period from December 2006 to December 2019 and has worked for the Bank since April 2023 For details, please refer to the biographical information of Mr WANG Jinhong disclosed in this section CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 69 4 Salaries of employees who have a significant impact on risks There are 410 people in the Group, including the middle managers of the head office, senior management personnel of the subsidiary and the person in charge of the risk management department of branches, who have a significant impact on risks Their total remuneration in 2024 amounted to RMB43997 million, among which no less than 40% of the performance-based remuneration will be deferred for three years, which meets regulatory requirements 5 Deferred payment of remuneration and non-cash remuneration The Bank implemented the deferred payment and reclaiming of performance-based remuneration in accordance with the requirements under the Guidelines on Healthy Remuneration Supervision for Commercial Banks and the Guidance Opinions on the Establishment and Optimization of System for Reclaiming of performance-base Remuneration for Banks and Insurance Companies The reclaiming of performance-based remuneration includes reclaiming paid performance-based remuneration and terminating payment of unpaid performance remuneration For relevant responsible persons who have violated regulations and disciplines and whose cases have not yet been concluded, or caused significant exposure to risks within the scope of their responsibilities due to obvious negligence or failure to exercise prudent management, the Bank shall reclaim and withhold their performance-based remuneration of the corresponding periods In 2024, the Bank reclaimed and withheld performance- based remuneration of 612 employees in an amount of RMB2403 million During the Reporting Period, the Bank did not implement any equity incentive scheme 6 Exceptions to the original remuneration package During the Reporting Period, there were no exceptions beyond the original remuneration package (III) The Positions of Directors, Supervisors and Members of Senior Management at Shareholders Name Employer Position Term of service AU Siu Luen Standard Chartered Bank Managing director May 2023 (Hong Kong) Limited to present YUAN Wei China Shipping Investment Director August 2021 Co, Ltd to present ZHANG Yunji Tianjin Shanghui Investment Chairman of the September 2009 Holding Company Limited board of directors to present CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 71 Mr ZHANG Yunji Mr ZHANG has a master’s degree He once worked in Tianjin Branch of Industrial and Commercial Bank of China Limited (中國工商銀行股份有限公司天津市分行) for a long time, where he served as an assistant to the president and a vice president In addition, he used to serve as the chairman of the board of directors and the general manager of Tianjin Rongsheng Xinye Investment and Development Co, Ltd He currently serves as a non-executive Director of the Bank and the chairman of the board of directors of Tianjin Shanghui Investment Holding Company Limited Mr QU Hongzhi Mr QU is a professorate senior economist with a master’s degree in finance and a doctor’s degree in management He once worked in China Construction Bank Corporation, where he served as the general manager of asset security department and general manager of legal affairs department of Tianjin branch, the president of Nankai sub-branch, the president of Heping sub-branch, an assistant to the president, a vice president and a member of the party committee of Tianjin branch, and the deputy secretary of the party committee and a vice president of Jiangsu branch He currently serves as the deputy secretary of the party committee, an executive Director and the president of the Bank Mr TSE Yat Hong Mr TSE is a Fellow of the Hong Kong Institute of Certified Public Accountants, and a Fellow of Certified Public Accountants (FCPA) of CPA Australia with a bachelor’s degree He once served as the chief financial officer and company secretary of Shenzhen International Holdings Limited, a joint company secretary and non-executive director of Shenzhen Expressway Company Limited, and an independent non-executive director of Sky Light Holdings Limited and E-Star Commercial Management Company Limited He currently serves as an independent non-executive Director of the Bank and an independent non-executive director of China Huirong Financial Holdings Limited and Radiance Holdings (Group) Company Limited Mr SHUM Siu Hung Patrick Mr SHUM has a bachelor’s degree He served as the China chief risk officer and vice president of ABN AMRO, the senior credit approval officer and senior vice president, the professional credit approval officer of China real estate of DBS Bank (China) Limited, the director and the credit approval officer of commercial real estate (Asia, excluding Japan) of Deutsche Bank, the vice president and director of credit risk department of OCBC Wing Hang Bank (China) Limited, the director of the risk department in China and the head of credit risk in the Great China Region of Maybank He currently serves as an independent non-executive Director of the Bank Ms WANG Aijian Ms WANG is a professor with a doctor’s degree She served as a teacher of the Department of Finance of Tianjin University of Finance and Economics, a vice dean of the School of Economics of Tianjin University of Finance and Economics, a director of the Office of Academic Development of Tianjin University of Finance and Economics and the vice president of Tianjin University of Finance and Economics She currently serves as an independent non-executive Director of the Bank, a director of Coordinated Innovation Center For Binhai Finance in China (CICBFC) under Tianjin University of Finance and Economics, an independent director of Tasly Pharmaceutical Group Co, Ltd (天士力醫藥集團股份有限公司), and an independent director of GuoDu Securities Co, Ltd (國都證券股份有限公司) CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 73 Mr LI Chengbang Mr LI has a master’s degree and a doctoral degree in economics He served as a principal staff member of the Tianjin Discipline Inspection Committee of the Communist Party of China, a principal staff member of the Fifth Division and the Third Division of the General Office of the Tianjin Municipal People’s Government, the deputy director of the General Division of the General Office of the Tianjin Municipal People’s Government, the deputy director (presiding over the work) and the director of the Eighth Division of the General Office of the Tianjin Municipal People’s Government, the director of the Sixth Division of the General Office of the Tianjin Municipal People’s Government, the director of the Office of the Board of Directors of the Bank He currently serves as an employees’ representative Supervisor, the director of the Office of the Board of Supervisors of the Bank and a director of Nanyang Country Bank Co, Ltd Ms ZHANG Hui Ms ZHANG is an economist with a master’s degree and a doctoral degree in economics She served as a senior staff member of the First Division of Banking Administration, a senior staff member of the Supervision Division of Foreign Banks, a senior staff member of the Supervision Division of Foreign Banks and Other Financial Institutions of the Tianjin Branch of the People’s Bank of China, a principal staff member and deputy director of the First Supervision Division of Joint Stock Banks of Tianjin Bureau of China Banking Regulatory Commission, the secretary of the Party Committee (黨委秘書) of the General Office (Party Committee Office), the assistant general manager, the deputy general manager (presiding over the work) and the general manager of the Finance Department, the general manager of the Internal Control and Compliance Department, a member of the Party Committee and vice president (ie level of the president of a tier-one branch) of the Beijing Branch of the Bank She is currently an employees’ representative Supervisor, the general manager of the Finance Department and the general manager of the Assets and Liabilities Management Department of the Bank Senior Management The detailed biography of Mr QU Hongzhi is set out in the section headed “Directors” Mr DU Gang Mr DU has a master’s degree and once worked in the PBoC, the CBRC and CBIRC He was once an executive Director of the Bank He is currently a member of the party committee, a vice president and the secretary to the Board of Directors of the Bank Mr XIE Kai Mr XIE is a senior engineer with a doctor’s degree in finance He once served as a secretary at deputy-director level of the secretariat of the office, the deputy director and director of e-commerce department of electronic banking department, the director of innovation business department of electronic banking department, a member of the party committee and a vice president of Jiangsu Nantong branch, the director of mobile finance department of electronic banking department, the director of mobile finance department of internet finance department, the director of business cooperation department of e-financing department, the deputy general manager of technology and product management bureau, the deputy general manager of internet banking department, and the deputy general manager of the county area banking & inclusive finance internet finance management centre of Agricultural Bank of China He is currently a vice president of the Bank Mr LI Jianguo Mr LI is a senior economist with a bachelor’s degree and a master’s degree He served as member of the Party Committee and vice president of the Sichuan Leshan Branch of Agricultural Bank of China; deputy director (on secondment) of Credit Management Division, deputy general manager of the Credit Management Department and Credit Review and Approval Center, member of the Party Committee and assistant to general manager of the Business Department of Sichuan Branch; secretary of the Party Committee and president of Luzhou Branch; member of the Party Committee and deputy general manager of the Business Department of Sichuan Branch; secretary of the Party Committee and president of Sichuan Leshan Branch; a senior expert and general manager of the Internal Control & Compliance Supervision Department of Sichuan Branch of Agricultural Bank of China He is currently a vice president of the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 75 On June 28, 2024, Mr LIU Lanbiao was elected as an independent non-executive Director of the Bank at the 2023 annual general meeting of the Bank On January 6, 2025, his qualification as an independent director was approved by the National Financial Regulatory Administration Mr LIU Lanbiao has served as an independent non-executive Director of the fifth session of the Board of Directors of the Bank, a member of each of the Nomination and Remuneration Committee under the Board of Directors, the Risk Management and Green Finance Committee under the Board of Directors and the Related Party Transactions Control Committee under the Board of Directors since January 6, 2024 Mr LIU Lanbiao has obtained the legal advice as set out in Rule 309D of the Listing Rules on December 5, 2024 and confirmed that he understands his responsibilities as a director of the Bank Upon expiry of his term of employment as a professional manager, Mr ZHAO Zhihong resigned as an executive Director of the Bank, a member of the Risk Management and Green Finance Committee of the Board of Directors and the Related Party Transactions Control Committee of the Board of Directors due to his age, with effect from July 19, 2024 In order to devote more time to his other business commitments, Mr ZHU Ning resigned as an independent non-executive Director of the Bank, a member of the Nomination and Remuneration Committee of the Board of Directors and the Audit and Consumer Rights Protection Committee of the Board of Directors, with effect from January 3, 2025 In accordance with the requirement of “independent directors shall not hold office for over six years in total in a banking or insurance institution” under the Code of Corporate Governance of Banking and Insurance Institutions, Mr MAO Zhenhua resigned as an independent non-executive Director of the Bank and the chairman of the Nomination and Remuneration Committee of the Board of Directors, with effect from January 6, 2025 On January 20, 2025, the sixth session of the Board of Directors was elected at the 2025 first extraordinary general meeting of the Bank, comprising of Mr WANG Jinhong and Mr QU Hongzhi as executive Directors, Mr AU Siu Luen, Mr QU Defu, Mr LIU Zhenyu, Ms YUAN Wei, Mr DUAN Wenwu, Mr HU Aimin and Mr ZHANG Yunji as independent non-executive Directors, and Mr TSE Yat Hong, Mr SHUM Siu Hung Patrick, Ms WANG Aijian, Mr LIU Junmin, Mr LIU Lanbiao and Mr OUYANG Yong as independent non-executive Directors Mr DU Gang ceased to be an executive Director and a member of the Development Strategy and Inclusive Finance Committee of the Board of Directors of the Bank with effect from the same date due to expiry of his term of office Mr MU Binrui ceased to be an independent non-executive Director, the chairman of the Risk Management and Green Finance Committee, and the Related Party Transactions Control Committee, and a member of the Audit and Consumer Rights Protection Committee of the Board of Directors of the Bank with effect from the same date due to expiry of his term of office The qualifications of Mr QU Defu, Mr LIU Zhenyu and Mr OUYANG Yong are subject to the approval by the regulatory authority On January 20, 2025, Mr WANG Jinhong was elected as the chairman of the sixth session of the Board of Directors of the Bank, and Mr AU Siu Luen was elected as the vice chairman of the sixth session of the Board of Directors of the Bank at the first meeting of the sixth session of the Board of Directors of the Bank Changes in Supervisors On May 28, 2024, the resignation of Mr DIAO Qinyi as an external Supervisor of the Bank and the chairman of the Supervision Committee of the Board of Supervisors was approved at the 22nd meeting of the fifth session of the Board of Supervisors of the Bank, with effect from the same date CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 77 (VI) Changes in the Information of Directors and Supervisors Mr QU Hongzhi, an executive Director of the Bank, became a member of each of the Risk Management and Green Finance Committee and the Related Party Transactions Control Committee of the Bank with effect from January 20, 2025 Mr SHUM Siu Hung Patrick, an independent non-executive Director of the Bank, became a member of each of the Risk Management and Green Finance Committee and the Related Party Transactions Control Committee of the Bank with effect from January 20, 2025 Save as the disclosures in this section, no information on Directors or Supervisors is subject to disclosure in accordance with Rule 1351B(1) of the Listing Rules (VII) Directors, Supervisors and Chief Executives’ Interests in the Bank As of the end of the Reporting Period, none of our Directors, Supervisors and chief executive had any interests or short positions in the shares, underlying shares and debentures of our Bank or any associated corporations (as defined in Part XV of the SFO) which were required to be entered in the register kept by the Bank pursuant to section 352 of the SFO, or which were required to be notified to the Bank and the Hong Kong Stock Exchange pursuant to the Model Code II EMPLOYEES (I) The Number and Structure of Employees As of the end of the Reporting Period, the Group had 13,824 employees, including 6,411 male employees and 7,413 female employees The age structure, educational background and professional post structure of the employees are as follows: 1 Age structure of employees Number of Age employees Structure (%) Aged 30 or below 3,084 2231 Aged 31–35 3,247 2349 Aged 36–40 3,529 2553 Aged 41–45 2,054 1486 Aged 46–50 979 708 Aged over 50 931 673 Total 13,824 10000 2 Educational background of employees Number of Educational background/degree employees Structure (%) Postgraduate/Master’s degree and above 4,052 2931 Undergraduate/Bachelor’s degree 9,577 6928 College and lower 195 141 Total 13,824 10000 CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 79 III BRANCHES As of the end of the Reporting Period, the Bank has established outlets in 25 provinces, municipalities and autonomous regions, 5 sub-provincial cities and the Hong Kong Special Administrative Region, covering 65 key cities nationwide, and has established 34 tier-one branches (including 3 branches in Suzhou, Qingdao and Ningbo under direct management of the head office and 1 overseas branch), 35 tier-two branches, 291 sub-branches, and 16 small and micro community sub-branches The total number of officially opened outlets reached 376 Tier-two branches and Number of sub-branches employees under in the jurisdiction institutions Number of (including under Name Address employees community) jurisdiction Head Office 218 Haihe East Road, Hedong District, 2,816 – – Tianjin Capital Operation 5F, Building 1, No 28, Jianguomennei 75 – – Center Avenue, Dongcheng District, Beijing Tianjin Branch 8-15/F, Part 1/F, Part 2/F, China Bohai Bank 411 1/51 1,060 Tower, 218 Haihe East Road, Hedong District, Tianjin Tianjin Pilot Free No 3 Building, Financial Center, No 158 25 – – Trade Zone West 3rd Road, Tianjin Pilot Free Trade Branch Zone (Airport Economic Area) Beijing Branch 1F-3F, East Tower C, Chemsunny World 298 1/28 420 Trade Center, 28 Fuxingmennei Street, Xicheng District, Beijing Hangzhou Branch Bohai Bank Building, No 117 Tiyuchang 198 3/15 320 Road, Xiacheng District, Hangzhou City, Zhejiang Province Taiyuan Branch No 308, Changzhi Road, Xiaodian District, 192 2/11 248 Taiyuan City, Shanxi Province Chengdu Branch No 87, Jinrongcheng South Road, High- 188 1/16 216 Tech Zone, Chengdu City, Sichuan Province Jinan Branch Building 3, Lushang Olympic City, 9777 187 4/13 346 Jingshi East Road, Jinan City, Shandong Province Shanghai Branch No 155 Yincheng Road, China (Shanghai) 197 0/16 195 Pilot Free Trade Zone Shanghai Pilot Free 2/F of No 1229 Century Avenue, Units 1-2 on 108 0/01 10 Trade Zone Branch 1/F, 2/F and 15/F of No 1239 Century Avenue, China (Shanghai) Pilot Free Trade Zone Shenzhen Branch 1B01, 1B02, 1B03, 2B01, 14/F, 23/F, 24/F, 194 1/13 298 25/F and 26/F, Block B, Aerospace Science and Technology Plaza, No 1288 Hyde 3rd Road, Yuehai Street, Nanshan District, Shenzhen City, Guangdong Province Nanjing Branch No 213 Jiangdong Middle Road, Jianye 228 6/10 356 District, Nanjing City, Jiangsu Province CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 81 Tier-two branches and Number of sub-branches employees under in the jurisdiction institutions Number of (including under Name Address employees community) jurisdiction Haikou Branch S5 Podium Building, Guorui City, No 11 78 0/01 15 Guoxing Avenue, Meilan District, Haikou City, Hainan Province Qingdao Branch Office Building T8, Shangshi Center, 195 92 0/04 57 East Hong Kong Road, Laoshan District, Qingdao City, Shandong Province Ningbo Branch 1F-3F, Emeke Building, No 188 Dazha 79 0/02 26 Road, Jiangbei District, Ningbo City, Zhejiang Province Nanning Branch 1F-5F, Podium Building, King’s 85 0/03 35 International Merchant Center, 59 Jinhu Road, Qingxiu District, Nanning City, Guangxi Zhuang Autonomous Region Nanchang Branch Cuilin Building, 1266 Fenghe Middle 93 0/06 56 Avenue, Honggutan New District, Nanchang City, Jiangxi Province Guiyang Branch No 1, 1F and No 1, half B1, Building 79 0/02 22 9, Business District, One Guiyang International Finance Center, Lincheng Road, Guanshanhu District, Guiyang City, Guizhou Province Kunming Branch No 391, Rixin Middle Road, Xishan 82 0/02 27 District, Kunming City, Yunnan Province Hong Kong Branch Suites 1201-1209 and 1215-1216, 12/F, 64 – – Two International Finance Centre, 8 Finance Street, Central, Hong Kong Note: The information in the above table does not include the subsidiary CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 83 3 Convening an interim Board meeting When the Shareholder(s) individually or jointly holding 10% or more of the total voting shares of the Bank propose to convene an interim Board meeting, the chairman of the Board shall convene the meeting within five working days 4 Inquiring of the Board of Directors Shareholders who provide the Bank with a written document certifying the class and number of shares they hold in the Bank, and upon authentication of the identity of the Shareholder by the Bank, shall have the right to obtain relevant information of the Bank in accordance with laws and regulations and the Articles of Association of the Bank, including the Articles of Association of the Bank, share register, minutes of the Shareholders’ general meetings, resolutions of Board meetings and meetings of the Board of Supervisors, the latest audited financial and accounting report and the auditor’s report, etc For contact details of Shareholders’ inquiries to the Bank, please see “Corporate Profile” in this annual report For detailed information on the Shareholders’ rights of the Bank, please see the Articles of Association published on the websites of the HKEX and the Bank (II) Shareholders’ Communication Policy The Bank has formulated the “Shareholders’ Communication Policy”, which lists the purpose, general policies, communication channels, communication with the investment market and Shareholder privacy of its Shareholders’ communication policy The communication channels between the Bank and Shareholders include: Shareholders’ inquiries • The Bank has disclosed the company’s contact information on its website so that Shareholders can make inquiries about the Bank • Shareholders may inquire about their shareholding at the Share Registrar of the Bank • Shareholders may request public information of the Bank at any time Corporate communications • Corporate communications (within the meaning of the Listing Rules), including but not limited to (i) directors’ reports, annual accounts together with auditors’ report, (ii) interim reports, (iii) notices of meetings, (iv) listing documents, (v) circulars, (vi) proxy forms, (vii) application proof, and (viii) post hearing information pack • Corporate communications should be made available to the Shareholders in a timely manner and should be written in plain Chinese and English CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 85 During the Reporting Period, the Bank convened 3 general meetings in strict compliance with relevant laws and regulations, the Bank’s Articles of Association and the Rules of Procedures for General Meetings of Shareholders to actively interact and communicate with Shareholders The Bank timely disclosed results announcements, periodic reports, announcements, circulars, notices of Shareholders’ meetings and other information in accordance with regulatory requirements, and continuously updated the Bank’s website to protect investors’ right to know The Bank maintained communication with investors and responded to investor concerns in a timely manner through multiple channels After review, the Bank’s Shareholders’ Communication Policy continued to be effective during the Reporting Period, and the Bank’s communication with Shareholders and investors complied with relevant regulations (III) Introduction to the General Meeting During the Reporting Period, the Bank convened 3 general meetings The relevant information is as follows: The Bank convened the 2024 first extraordinary general meeting in Tianjin on March 5, 2024 Shareholders or their proxies attending the general meeting represented a total of 13,244,442,978 ordinary shares with voting rights of the Bank 12 Directors of the Bank attended the meeting, and the Supervisors and the secretary to the Board of Directors of the Bank were present at the meeting The resolution on special authorization plan for financial bonds, tier-two capital bonds and undated capital bonds was considered and approved at the meeting and a resolution was formed The meeting also reviewed the 2022 Assessment Report on the Quality and Qualification of Major Shareholders and Relevant Matters The Bank convened the 2023 annual general meeting in Tianjin on June 28, 2024 Shareholders or their proxies attending the general meeting represented a total of 13,275,413,028 ordinary shares with voting rights of the Bank 12 Directors of the Bank attended the meeting, and the Supervisors and the secretary to the Board of Directors of the Bank were present at the meeting 14 resolutions were considered and approved at the meeting and the matters considered included: the Report of the Board of Directors for 2023, the Report of the Board of Supervisors for 2023, the Report of Final Financial Accounts for 2023, the Profit Distribution Plan for 2023, the Financial Budget Report for 2024, the Adjustments to the Investment Plan for 2023, the Investment Plan for 2024, the remuneration of Mr LI Fuan for 2022, the election of independent non-executive Directors, the election of external Supervisor and the re-appointment of external auditors for 2024 The meeting also reviewed 10 written reports, including the Reports on Resignation of Independent Non-Executive Directors, the Reports on the Resignation of External Supervisors, the 2023 Special Report on Related Party Transactions, the Board of Supervisors’ 2023 Assessment Report on the Performance of Duties of the Board of Directors, Senior Management and Their Members, the 2023 Report on Self-evaluation of the Board of Supervisors and Assessment of the Performance of Duties of Supervisors, and the Report of the Board of Supervisors on Independent Opinions on Related Matters in 2023 The Bank convened the 2024 second extraordinary general meeting in Tianjin on September 19, 2024 Shareholders or their proxies attending the general meeting represented a total of 13,219,446,651 ordinary shares with voting rights of the Bank 10 Directors of the Bank attended the meeting, and the Supervisors of the Bank were present at the meeting The resolution on the proposed mandate in relation to the potential very substantial disposal through public tender was considered and approved at the meeting and a resolution was formed The meeting also reviewed the Report on Resignation of an Executive Director The domestic legal advisor of the Bank witnessed the convening of the above meetings and other related matters in accordance with the law, and believed that the meetings were in compliance with relevant laws and regulations, regulatory documents and the Articles of Association For details of the meetings, please refer to the circular, notices and the poll results announcement of the relevant general meetings published on the websites of the HKEX and the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 87 (II) The Responsibility of the Board of Directors The Board of Directors is accountable to the Shareholders’ general meeting and responsible for operation and management of the Bank Its principal responsibilities include convening Shareholders’ general meeting and executing resolutions of general meeting, formulating development strategy and medium and long term development plans and monitoring the implementation of strategies, determining operational plans and investment programs, examining and approving capital management plans, formulating annual financial budget plans, final accounting plans, risk capital allocation plans, profit distribution plans and loss recovery plans, etc For detailed information on the responsibility of the Board of Directors of the Bank, please see the Articles of Association published on the websites of the HKEX and the Bank (III) Board Meetings and the Work of the Board During the Reporting Period, the Board of Directors of the Bank adapted to the evolving international and domestic economic and financial landscape, fully leveraged its role as the decision-making body, and ensured the high-quality completion of the Bank’s strategic tasks and the achievement of its operational management objectives The Board of Directors played a strategic guiding role, firmly upheld the direction and path of high-quality development, and steadily advanced the implementation of the strategic plan; focused on key issues, scientifically formulated business plans, and consolidated a healthy and stable development foundation; supplemented capital through multiple channels to enhance its capital strength and optimized capital management efficiency; improved the comprehensive risk management mechanism, strengthened compliance culture construction, and strictly implemented internal control, compliance, and risk management responsibilities; continuously refined its incentive and restraint mechanisms, strengthened the supervision and evaluation of the senior management’s performance, and fully utilized the guiding role of performance assessments; performed key functions such as equity affairs management and information disclosure in accordance with laws and regulations, further enhanced the protection of investor and consumer rights, actively accepted public supervision, and proactively fulfilled social responsibilities; continued to strengthen its own development, standardized its duties and responsibilities, and consistently improved its scientific decision-making capabilities During the Reporting Period, the Board of Directors of the Bank convened 15 meetings, at which 89 proposals were deliberated, and 24 reports were debriefed The Board of Directors considered resolutions such as the annual final accounts report, annual budget report, annual profit distribution plan, annual group performance evaluation indicators, annual review of the corporate governance policy, disposal of assets, material related party transactions, external donations, change of Directors, change of senior management, appraisal results of Directors and mutual evaluation of independent Directors, annual assessment and evaluation of senior management members, assessment and evaluation of the terms of office of professional managers, deferred payment and reclaiming of performance remuneration, amendments to the Fourth “Five-Year Plan”, work report of senior management, report on comprehensive risk management, assessment report on internal capital adequacy, report on consolidated statement management, report on appraisal of consumer rights protection, report on liability quality management, work report on green finance and various information disclosure reports It formulated the comprehensive risk management measures, the financial asset risk classification measures and the criminal case risk control and management measures, and revised basic systems such as the operational risk management policy, information technology risk management policy and business continuity management policy The Board of Directors also debriefed reports including the special report on related party transactions, the internal control evaluation report and auditor’s statement, the report on audit work of the Audit and Consumer Rights Protection Committee of the Board of Directors, the internal audit work report, the working plans of the Board of Directors and its special committees, self-assessment report on data governance, development plan for inclusive finance business, assessment report on strategy implementation, report on the Bank’s regulatory situations & the Bank’s rectification report and the report on consumer complaints CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 89 (V) Independent Opinion Mechanism, Independence and Work of Independent Non-Executive Directors According to the Articles of Association of the Bank, the Board of Directors of the Bank consists of executive Directors and non-executive Directors (including independent non-executive Directors) The independent non-executive Directors shall represent at least one-third of the total members of the Board The structure of the Board of Directors is scientific and balanced, and non-executive Directors (including independent non-executive Directors) account for the majority to ensure that the Board of Directors can fully obtain independent views and opinions, and independently and effectively perform decision-making functions In order to ensure that independent non-executive Directors can effectively exercise their functions and powers, the Bank shall provide independent non-executive Directors with the following necessary working conditions: (1) The Bank shall ensure that independent non-executive Directors enjoy the same right to know as other Directors For matters to be decided on by the Board of Directors, the Bank shall notify independent non-executive Directors in advance according to the statutory time and provide them with sufficient information Independent non-executive Directors may request supplementary information if they consider the information insufficient When two or more independent non-executive Directors believe that the information is insufficient or the argumentation is not clear, they may jointly propose to the Board of Directors in writing to postpone the meeting of the Board of Directors or postpone the deliberation of the matter, and the Board of Directors shall adopt such proposal; (2) The Bank shall provide the necessary working conditions for independent non-executive Directors to perform their duties The secretary to the Board of Directors shall actively provide assistance to independent non-executive Directors in performing their duties, such as introducing the situations and providing materials If independent opinions, proposals and written statements made by independent non-executive Directors shall be announced, the secretary to the Board of Directors shall handle the matter in relation to the announcement in a timely manner; (3) When independent non-executive Directors exercise their functions and powers, relevant personnel of the Bank shall actively cooperate and shall not refuse, hinder or hide anything or interfere in their independent exercise of functions and powers; (4) The cost of engaging an intermediary agency and other reasonable expenses required for the exercise of duties by independent non-executive Directors shall be borne by the Bank; (5) The Bank shall offer appropriate allowances to independent non-executive Directors Standards for allowances shall be formulated by the Board of Directors and reviewed and approved by the Shareholders’ general meeting In addition to the above-mentioned allowances, independent non-executive Directors shall not obtain other additional and undisclosed benefits from the Bank, its substantial Shareholders, or interested institutions and personnel The Evaluation Methods on Directors’ Performance of the Bank stipulates that the Bank shall annually evaluate the performance of Directors, mainly based on five dimensions including fulfilling the duty of loyalty, fulfilling the duty of diligence, professionalism in performance of duties, independence and morality in performance of duties, and compliance with regulations in performance of duties The evaluation of the duty performance of independent non-executive Directors shall also include the following: (1) Should not be influenced by substantial Shareholders, members of the senior management, and other entities and individuals with interests in the Bank, and should pay attention to safeguarding the legitimate rights and interests of small and medium Shareholders and other stakeholders; (2) Express objective, impartial and independent opinions on matters discussed at the Shareholders’ general meeting or the Board meeting; (3) Other matters stipulated by laws, regulations, regulatory requirements and the Articles of Association of the Bank For detailed information on the Bank’s requirements for independent non-executive Directors, please refer to the Articles of Association of the Bank published on the websites of the HKEX and the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 91 (VIII) Special Committees under the Board of Directors The Bank’s Board of Directors has set up the Risk Management and Green Finance Committee (and the Related Party Transactions Control Committee subordinated to it), the Audit and Consumer Rights Protection Committee, the Nomination and Remuneration Committee and the Development Strategy and Inclusive Finance Committee Each special committee provides professional advices to the Board of Directors and makes decisions on special matters according to the authorization of the Board of Directors During the Reporting Period, the special committees under the Board of Directors convened 34 meetings in total, at which 81 proposals were deliberated and 17 reports were debriefed, details of which are as follows: 1 Risk Management and Green Finance Committee of the Board of Directors (1) Personnel composition As of the end of the Reporting Period, the Risk Management and Green Finance Committee of the Board of Directors of the Bank consisted of four members, being independent non-executive Directors Mr MU Binrui and Mr TSE Yat Hong; non-executive Directors Mr AU Siu Luen and Mr ZHANG Yunji, respectively, and was chaired by Mr MU Binrui (2) Main responsibilities The main responsibilities of the Risk Management and Green Finance Committee of the Board of Directors of the Bank include: setting the basis and method for the level of risk that the Bank can undertake; reviewing risk appetite and risk management policies, systems and basic principles; reviewing the disposal of assets and provision of external guarantees that are not within the scope of business operations; supervising the senior management’s control over risks, regularly debriefing the senior management’s report on risks and risk management status, timely putting forward opinions on risk management and internal control, reporting to the Board of Directors when necessary, and informing the senior management and the Board of Supervisors; where necessary, debriefing the senior management’s reports on compliance with relevant laws and regulations, regulatory requirements, policies of the Bank, rules and regulations, anti-money laundering arrangements and self-inspection results; researching and formulating green finance strategy; debriefing the senior management’s report on implementation of the green finance strategy, supervising and evaluating the implementation of the green finance strategy; reporting to the Board of Directors on the implementation of the green finance strategy and submitting comments and recommendations; authorizing the affiliated Related Party Transactions Control Committee to exercise relevant functions and powers over related party transactions control and performing other duties as assigned by the Board of Directors (3) Meetings and work During the Reporting Period, the Risk Management and Green Finance Committee of the Board of Directors of the Bank held a total of 10 meetings, at which 28 proposals were deliberated and 4 reports were debriefed The Risk Management and Green Finance Committee of the Board of Directors reviewed the report on comprehensive risk management of the Bank, risk assessment report of derivatives trading business, report on liability quality management, summary of prevention and control work on non-compliance cases, comprehensive risk management measures, assessment report on internal capital adequacy, statement on risk appetite at group level, implementation of the expected credit loss method, information technology risk management policy, business continuity management policy and work report on green finance and other proposals, and debriefed the report of the chief risk management officer and the employee conduct assessment report It also required the senior management to strengthen key risk control from multiple dimensions, continuously improve risk concentration indicators, consistently enhance the Bank’s risk management capabilities, accelerate the development of green finance, and make every effort to excel in the field of green finance CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 93 (3) Meetings and work During the Reporting Period, the Related Party Transactions Control Committee of the Board of Directors of the Bank held a total of six meetings, at which 9 proposals were deliberated The Related Party Transactions Control Committee of the Board of Directors attached great importance to the management of related party (connected) transactions, and strictly examined matters in relation to material related party transactions It also reviewed the special report on related party transactions for the year, annual report and interim report, and expressed opinions on the authenticity, accuracy and integrity of information disclosure of related party (connected) transactions It accepted the filing of general related party transactions that occur on a daily basis and oversaw the compliance of general related party transactions During the Reporting Period, the attendance of the members of the Related Party Transactions Control Committee of the Board of Directors of the Bank is as follows: Number of Number of Number of scheduled attendances attendances Number of Name attendances in person by proxy absences MU Binrui 6 6 – – AU Siu Luen 6 6 – – ZHANG Yunji 6 6 – – TSE Yat Hong 6 6 – – ZHAO Zhihong 3 3 – – CHI Guotai 2 2 – – Notes: (1) During the Reporting Period, the Related Party Transactions Control Committee of the Board of Directors of the Bank convened six off-site meetings (2) Please refer to “Directors, Supervisors, Members of Senior Management, Employees and Branches: Changes in Directors, Supervisors and Members of Senior Management” in this annual report for the changes in the Directors of the Bank during the Reporting Period 3 Audit and Consumer Rights Protection Committee of the Board of Directors (1) Personnel composition As of the end of the Reporting Period, the Audit and Consumer Rights Protection Committee of the Board of Directors of the Bank consisted of six members, being independent non-executive Directors Mr TSE Yat Hong, Mr MU Binrui, Mr ZHU Ning and Mr SHUM Siu Hung Patrick; non-executive Directors Mr AU Siu Luen and Ms YUAN Wei, respectively, and was chaired by Mr TSE Yat Hong All members of the Audit and Consumer Rights Protection Committee of the Board of Directors are non-executive Directors, and the majority is the independent non-executive Directors, which complies with the Listing Rules and the Articles of Association of the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 95 During the Reporting Period, the attendance of the members of the Audit and Consumer Rights Protection Committee of the Board of Directors of the Bank is as follows: Number of Number of Number of scheduled attendances attendances Number of Name attendances in person by proxy absences TSE Yat Hong 8 8 – – AU Siu Luen 8 8 – – YUAN Wei 8 8 – – MU Binrui 8 8 – – ZHU Ning 8 8 – – SHUM Siu Hung Patrick 8 8 – – Notes: (1) During the Reporting Period, the Audit and Consumer Rights Protection Committee of the Board of Directors of the Bank convened four off-site meetings (2) Please refer to “Directors, Supervisors, Members of Senior Management, Employees and Branches: Changes in Directors, Supervisors and Members of Senior Management” in this annual report for the changes in the Directors of the Bank during the Reporting Period (4) Audit and Consumer Rights Protection Committee of the Board reviewed the annual financial report for 2024 The Audit and Consumer Rights Protection Committee of the Board of the Bank performed the following duties during the review of the 2024 Annual Report in accordance with the relevant policies of the Bank: at the on-site auditing stage of the accountants for annual audit, the 35th meeting of the Audit and Consumer Rights Protection Committee of the fifth session of the Board was held on December 19, 2024, at which the committee listened to the work report of the external auditor, Deloitte Touche Tohmatsu, for audit plan on the annual financial report for 2024 and pre-audit work progress, and put forward advices and requests In the process of auditing, the committee strengthened the communication with the accountants for annual audit After the preliminary audit opinions were issued by the accountants for annual audit, the 1st meeting of the Audit and Consumer Rights Protection Committee of the sixth session of the Board was held on March 25, 2025, at which the committee reviewed the Bank’s financial statements and the audit report for 2024, listened to the external auditor’s report on the Bank’s annual audit work for 2024, and put forward advices Before holding the annual meeting of the Board, the 2nd meeting of the Audit and Consumer Rights Protection Committee of the sixth session of the Board was held on March 25, 2025, at which the committee considered and approved the Bank’s annual financial report for 2024, and agreed to submit it to the Board of the Bank for consideration CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 97 The Nomination and Remuneration Committee of the Board of Directors of the Bank shall nominate and review the qualifications and conditions for the appointment of Directors in accordance with the Articles of Association and the procedures and standards for the appointment of Directors and make recommendations to the Board of Directors on the nomination of such persons after identifying the suitably qualified person to serve as Director (3) Meetings and work During the Reporting Period, the Nomination and Remuneration Committee of the Board of Directors of the Bank held a total of six meetings, at which 19 proposals were deliberated The Nomination and Remuneration Committee of the Board of Directors deliberated the annual group performance evaluation indicators, performance assessment contract of the chairman of the Board, assessment and evaluation of the terms of office of professional managers, determination of the compensation and incentive income of senior management members during their terms of office, as well as the market-oriented recruitment work plan for professional managers as senior management members and other proposals It also selected Directors and professional managers with high standards, and carefully evaluated the independence of the candidates of independent non-executive Directors, which further enhanced the diversity of the Board of Directors and senior management members During the Reporting Period, the attendance of the members of the Nomination and Remuneration Committee of the Board of Directors of the Bank is as follows: Number of Number of Number of scheduled attendances attendances Number of Name attendances in person by proxy absences MAO Zhenhua 6 6 – – WANG Jinhong 6 6 – – HU Aimin 6 6 – – ZHU Ning 6 6 – – SHUM Siu Hung Patrick 6 6 – – CHI Guotai 2 2 – – Notes: (1) During the Reporting Period, the Nomination and Remuneration Committee of the Board of Directors of the Bank convened 6 off-site meetings (2) Please refer to “Directors, Supervisors, Members of Senior Management, Employees and Branches: Changes in Directors, Supervisors and Members of Senior Management” in this annual report for the changes in the Directors of the Bank during the Reporting Period 5 Development Strategy and Inclusive Finance Committee of the Board of Directors (1) Personnel composition As of the end of the Reporting Period, the Development Strategy and Inclusive Finance Committee of the Board of Directors of the Bank consisted of six members, being executive Directors Mr WANG Jinhong, Mr QU Hongzhi and Mr DU Gang; non-executive Directors Mr AU Siu Luen, Ms YUAN Wei and Mr DUAN Wenwu, respectively, and was chaired by Mr WANG Jinhong CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 99 (IX) Corporate Governance Functions The Board of Directors of the Bank is responsible for performing its corporate governance functions set out in Appendix C1 of the Listing Rules, including: developing and reviewing the corporate governance policies and practices; reviewing and monitoring the training and continuous professional development of directors and senior management members; reviewing and monitoring the Bank’s policies and practices on compliance with legal and regulatory requirements; developing, reviewing and monitoring codes of conduct and compliance manuals for employees and directors; and reviewing the Bank’s compliance with the Corporate Governance Code and the disclosure of corporate governance information in the annual report IV BOARD OF SUPERVISORS (I) Members of the Board of Supervisors As of the end of the Reporting Period, the Board of Supervisors of the Bank consisted of five Supervisors, including two external Supervisors: Mr HUI Yung Chris and Ms DU Huibin, and three employees’ representative Supervisors: Mr BAI Xinyu, Mr LI Chengbang and Ms ZHANG Hui (II) The Responsibility of the Board of Supervisors The Board of Supervisors is the Bank’s internal supervisory organization It is accountable to the Shareholders’ general meeting and targets on protecting the legal rights of the Bank, the Shareholders, employees, creditors and other stakeholders Its major functions and powers include supervising the Board of Directors to establish sound business philosophy, value standards and formulate development strategies in line with the Bank’s actual situation; regularly evaluating the scientificity, rationality and effectiveness of the development strategies formulated by the Board of Directors, and forming an evaluation report; inspecting and supervising the Bank’s financial activities, operating decisions, internal control and risk management and pushing forward relevant rectifications; supervising the election and appointment process of Directors; supervising the violation of laws and regulations or the Articles of Association of the Bank by the Directors and senior management members when performing their duties, and comprehensively evaluating the performance of the Directors, Supervisors and senior management members, etc (III) Work of External Supervisors As of the end of the Reporting Period, there are two external Supervisors in the Board of Supervisors of the Bank, the number of which is not less than one-third of the total number of members of the Board of Supervisors During the Reporting Period, the external Supervisors of the Bank strictly complied with the laws and regulations, regulatory requirements and the provisions of the Bank’s Articles of Association, earnestly performed their supervisory duties, and actively protected the legitimate rights and interests of the Bank, Shareholders and other stakeholders They attended all the meetings of the Board of Supervisors that they should attend, complying with regulatory requirements in terms of in-person attendance rate, and provided advice and suggestions to the Board of Directors and the senior management on strengthening capital management, comprehensive risk management, asset quality management, case prevention and control management, consumer rights protection, data governance, and rectification of issues identified in audits; presided over and convened meetings of the special committees under the Board of Supervisors, continued to monitor relevant matters within the scope of the special committees’ responsibilities, and promptly provided professional opinions to the Board of Supervisors; attended 3 Shareholders’ general meetings and all on-site meetings of the Board of Directors during the Reporting Period, took the initiative to attend on- site meetings of the special committees under the Board of Directors, conducted on-site supervision on the effective operation of the Board of Directors and its special committees and the speeches of Directors at the meetings, and carefully reviewed documents of off-site meetings During the adjournment period, they reviewed 78 information reports including the Bank’s monthly financial statements, minutes of the president’s office meetings and consumer rights protection risk alerts, and actively participated in the training and surveys in branches as organized by the Board of Supervisors of the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 101 (I) Composition and Basic Information of Senior Management As of the end of the Reporting Period, the senior management of the Bank consisted of three members, including: the president: Mr QU Hongzhi, the vice presidents: Mr DU Gang (secretary to the Board of Directors) and Mr XIE Kai During the Reporting Period, among these three members of the senior management, 1 person received less than RMB2 million and 2 persons received more than RMB2 million for the total amount of pre-tax remuneration from the Bank For detailed information about the remuneration and other basic information of members of the senior management, please refer to “Directors, Supervisors, Members of Senior Management, Employees and Branches: Directors, Supervisors and Members of Senior Management” of this annual report During the Reporting Period, under the leadership of the Party Committee of the head office and the Board of Directors and in adherence to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the senior management of the Bank fully studied and implemented the guiding principles from the 20th CPC National Congress and the second and third plenary sessions of the 20th CPC Central Committee, as well as the important statements from General Secretary Xi Jinping on finance works and the important speech made during his visit to Tianjin They diligently implemented the work plan of financial regulatory departments of central government and Tianjin Committee of the CPC and Tianjin Municipal People’s Government, and insisted on the general principle of pursuing progress while ensuring stability Taking the “five priorities” as starting point and adhering to the basic principles of serving the real economy with financial services, the senior management of the Bank also facilitated the deepening of reforms, transformation and revitalization, and continued to promote high-quality development across the Bank During the Reporting Period, the senior management of the Bank, in accordance with relevant laws, regulations, the Articles of Association and the Work Rules for Senior Management (《高級管理層工作規則》) of the Bank, conscientiously performed their duties, and worked hard to improve the level of operation and management A total of 6 bank-wide comprehensive meetings, 53 office meetings of the president, 50 special meetings of the president, 11 meetings of the Assets and Liabilities Management Committee, 16 meetings of the Risk Control Committee, 101 meetings of the Finance Review and Approval Committee, 24 meetings of the Information Technology Committee, 11 meetings of the Data Management and Data Security Committee, 18 meetings of the Consumer Rights Protection Working Committee, 81 meetings of the Financial Markets Business Joint Decision Making Committee, 6 meetings of the Channel Establishment Management Committee, 11 meetings of the Retail Business Committee and 12 meetings of the Corporate Business Committee were held during the whole year At various meetings, the senior management members actively expressed their professional opinions, fully communicated on information, and conscientiously solved problems, ensuring the efficient and orderly development of operation and management CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 103 XII INFORMATION DISCLOSURE The Bank attaches great importance to information disclosure, strictly complies with the information disclosure regulations and the requirements of the Listing Rules, adheres to the principles of truthfulness, accuracy, completeness, timeliness and fairness, fulfills the obligation of information disclosure, and protects investors’ right to know During the Reporting Period, guided by investor needs and in compliance with industry regulatory requirements and the regulatory rules of the securities listing locations, the Bank continued to enhance the initiative and pertinence of information disclosure with a focus on the concerns of investors, so as to provide supporting information for investors to gain a comprehensive and in-depth understanding of the operation and development of the Bank In 2024, the Bank completed the preparation and disclosure of Annual Report 2023 and Interim Report 2024 on time, continued to optimize the structure and content of the social responsibility report, and make timely disclosure of temporary announcements in accordance with regulatory requirements More than 70 information disclosure documents of various types were published on the websites of the HKEX and the Bank The Bank carried out inside information management in strict accordance with the regulatory requirements of the place where the securities were listed Through establishing and optimizing the internal information reporting mechanism, the Bank defined the information reporting route, and ensured the timely, compliant and effective transmission of material information among corporate governance entities In case of “inside information” as referred to in the SFO, the Bank can deal with and release inside information in a timely manner in accordance with the Guidelines on Disclosure of Inside Information issued by the Securities and Futures Commission of Hong Kong and other relevant regulatory requirements, and strictly keep confidential relevant information before disclosure During the Reporting Period, the Bank strengthened compliance publicity and education and enhanced the compliance awareness of insiders by organizing staff to study the regulatory requirements, duly releasing the confidentiality notice and the notice on prohibiting securities trading, effectively preventing insider dealing risk XIII AMENDMENTS TO THE ARTICLES OF ASSOCIATION During the Reporting Period, the Bank did not amend its Articles of Association XIV COMPLIANCE WITH CORPORATE GOVERNANCE CODE The Bank has adopted the code provisions set out in Part 2 of Appendix C1 to the Listing Rules Pursuant to code provision B22, every director (including those appointed for a specific term) should be subject to retirement by rotation at least once every three years The term of the fifth session of the Board of Directors of the Bank expired on December 15, 2022 When preparing for the re-election of the Board of Directors, the re-election of the Board of Directors was postponed in order to maintain the continuity of the relevant work of the Bank On December 20, 2024, the Board of Directors of the Bank considered and approved the proposal for the candidates of the sixth session of the Board of Directors, and published an announcement on the proposed election of directors for the sixth session of the Board of Directors on the same day On January 20, 2025, the sixth session of the Board of Directors has been elected at the 2025 first extraordinary general meeting of the Bank, and thus the re-election of the Board of Directors has been completed For details, please refer to the relevant announcements and circular published by the Bank on the websites of the HKEX and the Bank As of the date of this annual report, the Bank has complied with code provision B22 Save and except for disclosed above, the Bank has complied with the code provisions set out in Part 2 of Appendix C1 to the Listing Rules during the Reporting Period The Bank has also complied with certain recommended best practices set out in the Code CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 105 The Bank has established a “four-in-one” internal control organization system consisting of process execution, functional management, second-line supervision and internal audit The Bank adheres to the principle of “comprehensive, whole-process, and whole-workforce” in internal control management, compliance support, operational risk prevention, case prevention and control, anti-money laundering management, business continuity management, auditing and inspection and other aspects, to promote compliant and orderly management and steady development of all operations During the Reporting Period, the Bank continued to improve the long-term mechanism of internal control and compliance management, optimized the internal control and compliance management structure, and strengthened segment management; focusing on the key tasks for the year, it provided guidance to enhance management capability and professionalism of the internal control and compliance teams of its branches; it strengthened assessment and incentives to improve the accuracy and effectiveness of internal control and compliance management assessment; it strengthened case prevention management, established a grid-based employee management structure, and improved employee management efficiency; it carried out various forms of internal control compliance training to continuously improve employees’ compliance awareness and cultivate a compliance culture; it improved the inspection mechanisms, strengthened inspection management, and coordinated on-site inspections across the Bank to realize the organic linkage of on-site inspection planning, execution and supervision; it strengthened rectification and supervision, reinforced accountability, and targeted on violations; it established an enterprise-level on-site inspection system and promoted its use throughout the Bank, continued to optimize the internal control compliance model, and continuously improved the intelligent level of internal control compliance management The Bank has established an independent and vertical internal audit system, which independently performs audit functions as a working body under the Audit and Consumer Rights Protection Committee of the Board of Directors and the Board of Supervisors The organizational structure of the audit department of the head office and the regional audit centers has been established As the second-level department of the audit department of the head office and the regional audit agencies, the audit centers are accountable to and report to the audit department of the head office The internal audit of the Bank adopts risk-oriented audit strategies and audit methods On the basis of risk assessment, the Bank arranges audit plans and audit frequency according to regulatory requirements, risk degree and importance principles, and actively performs the supervision role of audit on key businesses and major risk areas within the scope of duties During the Reporting Period, in respect of internal audit matters, the Bank continued to improve various internal audit policies and procedures, constantly enhanced internal audit capability and technological level, and adopted risk-oriented audit strategies and methods The Bank carried out various audit works, performed audit supervision duties, and promoted the continuous improvement of the Bank’s internal control and risk management During the Reporting Period, the Board of Directors of the Bank conducted an annual review on the Bank’s risk management and internal control system for 2024, and no material defects have been found while individual implementation at the grassroots level needs to be strengthened The Board of Directors considered that the Bank’s risk management and internal control system was effective and adequate XVII INTERNAL AUDIT During the Reporting Period, the Bank adhered to and continuously emphasized a risk-oriented audit principle, actively expanded the breadth and depth of audit supervision, increased audit efforts on high-risk businesses and institutions, focused on the asset quality and the whole process of operation and management of credit extension, and concentrated on the key tasks and business areas in operation and management Focusing on the Bank’s central tasks, it conducted various audit projects, including special audits, regular and subsequent branch audits in accordance with the plan for internal audit work approved by the Audit and Consumer Rights Protection Committee under the Board of Directors, the work arrangements of the Board of Supervisors and regulatory requirements, and completed post-office audits in a timely manner according to the Bank’s actual situation, revealed the control deficiencies in various risk management of the Bank, including credit risk, compliance risk, market risk, operational risk and information technology risk, continuously promoted the rectification of the problems identified in the audits, fully performed the audit duties, and constantly promoted the continuous improvement in the internal control and risk management system of the whole bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Directors 107 Report of the Board of Directors I PRINCIPAL BUSINESS The Bank is mainly engaged in banking and related financial services Please refer to the section headed “Management Discussion and Analysis: Scope of Businesses” in this annual report for the Bank’s main business scope II BUSINESS REVIEW Please refer to the section headed “Management Discussion and Analysis” in this annual report for the financial performance, major risks, uncertainties and business outlook of the Bank during the Reporting Period; please refer to “Important Events” in this annual report for details of important events after the Reporting Period; please refer to “Compliance with Laws and Regulations” in this chapter for compliance with laws and regulations; please refer to “Performance of Social Responsibilities” in this chapter for environmental policies and performance, and relations with employees, customers, suppliers and other stakeholders III IMPLEMENTATION OF THE RESOLUTIONS OF SHAREHOLDERS’ GENERAL MEETING BY THE BOARD OF DIRECTORS During the Reporting Period, the Board of Directors of the Bank fully implemented the resolutions of the Shareholders’ general meeting, and earnestly implemented the Profit Distribution Plan for 2023, the Financial Budget Report for 2024, the Investment Plan for 2024, re-appointment of external auditors for 2024 and other resolutions reviewed and approved by the Shareholders’ general meeting IV PROFIT DISTRIBUTION (I) Profit Distribution Policy The Bank’s Dividend Policy is as follows: Profit after income tax paid by the Bank was distributed in the following order: • Making up for losses of previous years; • Setting aside 10% for statutory reserve fund; • Setting aside for general (risk) reserve; • Setting aside for discretionary reserve fund; • Paying dividends to Shareholders No profit shall be distributed to the Bank’s shares held by the Bank The Bank may distribute dividends in cash or by shares After the Shareholders’ general meeting of the Bank made a resolution on the profit distribution plan, the Board of Directors of the Bank shall complete the distribution of dividends (or shares) within two months upon the Shareholders’ general meeting Any shares paid before the call is entitled to interest, but the holders of the shares have no right to participate in the dividends subsequently declared for the prepaid shares Subject to the provisions of laws and regulations, the Bank may exercise the power of forfeiture with respect to unclaimed dividends, provided that such power may only be exercised after the expiration of the corresponding limitation period applicable to the declaration of dividends CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Directors 109 (III) Tax on Dividends Pursuant to the applicable provisions and the Implementing Regulations of the Enterprise Income Tax Law of the People’s Republic of China (《中華人民共和國企業所得稅法》), the Bank shall withhold and pay enterprise income tax at the rate of 10% for non-resident enterprise holders of H Shares (including H Shares registered in the name of HKSCC Nominees Limited) Pursuant to the Notice on Issues Concerning Taxation and Administration of Individual Income Tax After the Repeal of the Guo Shui Fa [1993] No 045 Document (Guo Shui Han [2011] No 348), the Bank shall withhold and pay individual income tax for Individual holders of H Shares For individual holders of H Shares who are Hong Kong or Macao residents and those whose country of domicile is a country or region which has entered into a tax treaty with the PRC stipulating a tax rate of 10%, the Bank shall withhold and pay individual income tax at the rate of 10% for those shareholders For individual holders of H Shares whose country of domicile is the country or region which has entered into a tax treaty with the PRC stipulating a tax rate of less than 10%, the Bank shall withhold and pay individual income tax at the rate of 10% for individual holders of H Shares If those shareholders require a refund of the excessive amount of individual income tax payable under the tax treaty, the Bank will handle applications on their behalf for preferential treatments pursuant to the relevant tax treaties However, in accordance with the Administrative Measures on Non-resident Taxpayers Claiming Tax Treaty Benefits (No 35 Announcement of the State Taxation Administration in 2019) (《非居民納稅人享受協定待遇管理辦法》) and the requirements of relevant tax treaties, shareholders shall promptly provide relevant papers and data Upon the review and approval of the applicable tax authorities, the Bank will assist in refunding the excessive amount of tax withheld For the individual holders of H Shares whose country of domicile is a country or region which has entered into a tax treaty with the PRC stipulating a rate of more than 10% but less than 20%, the Bank shall withhold and pay individual income tax at the applicable tax rate stipulated in the relevant tax treaty for those shareholders For the individual holders of H Shares whose country of domicile is a country or region which has entered into a tax treaty with the PRC stipulating a tax rate of 20%, or a country or region which has not entered into any tax treaties with the PRC, or under any other circumstances, the Bank shall withhold and pay individual income tax at the rate of 20% for those shareholders Pursuant to the relevant requirements under the Notice on the Relevant Taxation Policy regarding the Pilot Programme that Links the Stock Markets in Shanghai and Hong Kong (Cai Shui [2014] No 81) (《關於滬港股票市場交易互聯互通機制試點有關稅收政策的通知》(財稅[2014]81號)) and the Notice on the Relevant Taxation Policy regarding the Pilot Programme that Links the Stock Markets in Shenzhen and Hong Kong (Cai Shui [2016] No127) (《關於深港股票市場交易互聯互通機制試點有關稅收政策的通知》(財稅[2016]127號)), for dividends received by mainland individual investors from investing in H Shares listed on the Hong Kong Stock Exchange through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, the Bank shall withhold individual income tax at the rate of 20% on behalf of the investors Individual investors who have paid withholding tax overseas may apply to the competent tax authority of China Securities Depository and Clearing Corporation Limited for tax credit with valid tax payment certificates For dividends received by mainland securities investment funds from investing in shares listed on the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, the tax payable shall be the same as that for the individual investors Dividends received by mainland corporate investors from investing in shares listed on the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect are included in their total income and subject to corporate income tax according to law The Bank will not withhold and pay the income tax of dividends for mainland corporate investors and those mainland corporate investors shall report and pay the relevant tax themselves CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Directors 111 XIII COMPLIANCE WITH LAWS AND REGULATIONS The Bank continued to monitor and track the introduction of and changes in regulatory laws and regulations, promptly circulate and disseminate regulatory policies through legal updates and summaries, and keep up with the implementation of regulations, so as to transform external regulation into internal rules The Bank continued to review, formulate, evaluate and eliminate its rules and regulations, thereby constantly promoting the “establishment, amendment and abolition” of its policies The Bank also strengthened compliance reviews with system audits as the main body to proactively identify and manage the compliance risks of new products, new businesses and major projects, in order to strictly control compliance risks at the preliminary stage and firmly uphold the bottom line of compliance XIV LEGAL CONSTRUCTION EFFORTS Fully leveraging its core leadership role, the Party Committee at the head office reinforced its responsibilities as the primary person in charge of legal construction Guided by Xi Jinping Thought on the Rule of Law, the Bank duly implemented the requirements of the Party Central Committee, the CPC Tianjin Municipal Committee and the Tianjin Municipal People’s Government on promoting legal construction and deployment Firmly upholding the reform and development direction towards the rule of law, we promoted the organic integration of legal construction and business management, and continued to strengthen the leadership accountability system, work organization system, compliance management system, legal risk prevention mechanism, and the construction of a legal-based culture We continued to strengthen the organizational leadership of legal work while incorporating the legal construction tasks for the year into the overall work plan and annual work plan We also adjusted the composition of the leading group for legal construction and “Eighth Five-Year” Rule of Law Publicity and Education Work at head office, so as to ensure the implementation of legal work To strengthen the construction of its compliance system, the Bank has formulated institutional system documents and system compilations with 13 major types of business regulations, 6 major types of management regulations, as well as institutional and personnel regulations as the basic framework, and thus established an institutional system with comprehensive coverage, complete structure and clear hierarchy A grid-based management mechanism for all staff across the Bank has been established to deepen and enhance employee behavior management while integrating case prevention, anti-money laundering management, and operational risk management, which improved the quality and efficiency of compliance management We continued to consolidate the “three legal audits” to ensure 100% coverage of legal audits for rules and regulations, economic contracts and major decisions, while striving to enhance the quality of these audits Based on the key function of legal compliance services in providing support, we enhanced our legal risk prevention mechanism, strengthened the management of legal dispute cases, regulated the management of external legal counsel, and improved the efficiency of recovering and mitigating assets at risk, in order to effectively leverage the role of the rule of law in strengthening management, promoting operations, preventing and controlling risks, and creating value Closely aligned with business development, we conducted regular investigations on hidden hazards and gave risk alerts with defined responsibilities We learned from individual cases to prevent future issues, and thus established a long-term mechanism for source governance with solid progress Taking the “Eighth Five-Year” legal education initiative as a key driver, closely following changes in legislation and regulatory policies, we organized comprehensive, categorized, and targeted legal culture education activities that cover all employees, aiming to enhance the legal literacy of the entire workforce and firmly fostered the spirit of the rule of law Our work plan related to the rule of law are as follows: We will adhere to the principle of governing the enterprise in accordance with laws and regulations as a practical action to implement Xi Jinping Thought on the Rule of Law and the decisions and deployments made by the CPC Tianjin Municipal Committee and the Tianjin Municipal People’s Government By highlighting key priorities, and accelerating the efforts to address shortcomings and strengthen the areas of deficiency, we will continuously enhance the guiding and safeguarding capabilities, risk management and control capabilities, and proactive rights protection capabilities of legal construction This will gradually form a legal and compliance risk management system with clearer division of responsibilities, more refined operational mechanisms, and more pronounced management efficiency, thereby further enhancing our ability to govern the enterprise in accordance with laws and regulations CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Directors 113 Buttressed the bottom line of personal information protection The Bank continuously refined the requirements for protecting the personal financial information of customers, and summarized and updated the Summary of Key Points for Personal Information Protection in Banking Financial Institutions It conducted comprehensive inspections across the Bank to identify potential risks in protecting the personal information of consumers, and facilitated the safety management, operation and execution of personal information throughout its entire lifecycle comprising collection, transmission, processing, storage, usage, provision, disclosure and deletion Developed a distinctive culture brand of consumer rights protection The Bank hosted an IP solicitation and selection event for its consumer rights protection brand while adopting the slogan “Financial Services Uphold Our Original Aspiration, Consumer Rights Protection Demonstrates Our Responsibility” as the motto for its consumer rights protection culture Aiming to meet the people’s needs for a better life, the Bank fully integrated the cultural concept of consumer rights protection into its management practices, system development, business processes, ideological education, job training, inspection and supervision, and brand communication The Bank conducted over 700 consumer rights protection training sessions, cumulatively training more than 120,000 participants, which effectively enhanced its employees’ awareness and capabilities in consumer rights protection Energized financial education and awareness initiatives The Bank greatly promoted the construction of a comprehensive matrix for financial education and publicity, combining online and offline methods with both centralized and localized approaches Focusing on the financial needs of key groups such as the elderly, the young, and new migrants, the Bank enhanced the relevance, inclusivity and effectiveness of financial education During the Reporting Period, the Bank conducted over 14,365 online and offline educational and publicity activities, reaching more than 3525 million financial consumers It achieved 155 instances of coverage through central and national mainstream media and was honored with the title of “National Financial System Demonstration Site Learning from Lei Feng (全國金融系統學雷鋒活動示範點)” Consolidated the outcomes of tracing and managing consumer complaints The Bank proactively responded to public concerns, continuously optimized complaint handling processes, ensured accessible complaint channels, and promoted the establishment of a diversified financial dispute resolution mechanism It consistently improved product development, marketing management and operational procedures, seeking solutions throughout the entire lifecycle of products and services to enhance the quality and efficiency of complaint handling During the Reporting Period, the Bank handled a total of 22,593 consumer complaints, including 21,743 complaints from individuals and 850 complaints from corporate customers, with a complaint settlement rate of 100% The complaints from individual consumers received by the Bank were primarily concentrated in personal loans and credit card services, accounting for 4106% and 3025% respectively, totaling 7131% Geographically, these complaints were mainly distributed across five provinces and cities: Tianjin*, Guangdong, Beijing, Henan and Jiangsu, accounting for 6818%, 556%, 289%, 263% and 243% respectively, totaling 8169% (III) Development of Green Financial Business During the Reporting Period, in accordance with the decision and deployment of the CPC Central Committee and the State Council, the Bank actively implemented the national concepts of green and high-quality development, advanced the construction of a Beautiful China, and comprehensively served the strategic goals of carbon peaking and carbon neutrality Anchoring low-carbon economy, circular economy and ecological economy, the Bank focused on increasing the effective supply of green finance, and effectively prevented environmental, social and governance risks The Bank also continuously improved its environmental, social and governance performance, actively fulfilled its social responsibilities, leveraged its dynamic role in serving the real economy, and achieved new breakthroughs in economic and environmental benefits As of the end of the Reporting Period, the Bank’s green loan balance was RMB48,530 million, representing an increase of RMB17,270 million or 5525% as compared to the end of the previous year * Including complaints related to consumption involving the head office CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Supervisors 115 Report of the Board of Supervisors I MAIN WORK OF THE BOARD OF SUPERVISORS (I) Strengthening the Supervision over Performance of Duties, and Continuously Urging the Board of Directors, Senior Management and Their Members to Perform Their Duties with Due Diligence Firstly, the Board of Supervisors strengthened its follow-up supervision efforts Focused on urging the Board of Directors and the senior management to implement rectification measures, the Board of Supervisors sorted out and formed the “List of Items to be Implemented and Supervised for the Board of Directors and Senior Management Proposed by the Board of Supervisors of China Bohai Bank for 2023” (《2023年度渤海銀行監事會建議董事會、高級管理層落實事項督辦清單》), which set time nodes for implementing rectification measures and ensure proper supervision Secondly, the Board of Supervisors strengthened daily performance supervision The Board of Supervisors assigned members to attend the general meetings and the meetings of the Board of Directors and its special committees in person in 2024, and to supervise the effective operation of the Board of Directors and its special committees and Directors’ performance of duties, and reviewed a total of 239 various proposals and reported issues before the meetings; continued to pay attention to the operation and development of the Bank, assigned employees’ representative Supervisors to attend the president’s office meetings, 2024 work conference, interim work conference and other meetings, and reviewed a total of 78 information reports, president’s office meeting minutes and other materials during the adjournment period Thirdly, the Board of Supervisors improved the annual performance evaluation The Board of Supervisors organized and carried out evaluation of the performance of the Board of Directors, the senior management and their members in 2023 Focusing on the evaluation of the performance of the Board of Directors and the senior management in terms of capital management, risk management, employee conduct management, data governance and other aspects, the Board of Supervisors reported to general meetings and regulatory authorities on time, and informed the Board of Directors and the senior management of the performance evaluation results and related opinions and suggestions Fourthly, the Board of Supervisors conducted supervision over post-office audits In 2024, according to the resolution of the Board of Directors, the Board of Supervisors conducted post-office audits of two former senior management members, and arranged audits to evaluate their performance during their terms of office It also reviewed the post-office audit reports of two former Directors (II) Strengthening the Supervision over Financial Matters, and Paying High Attention to Major Financial Decisions of the Bank and Their Implementation Firstly, the Board of Supervisors considered relevant matters in a timely manner The Board of Supervisors reviewed the Bank’s profit distribution proposal for 2023, the 2023 annual report and the 2024 interim report, and offered opinions on the compliance and rationality of the profit distribution proposal, as well as the authenticity, accuracy and completeness of the contents of the regular reports Secondly, the Board of Supervisors supervised the decision-making of financial matters The Board of Supervisors assigned members to attend relevant meetings of the Board of Directors and the senior management in 2024, and conducted on-site supervision over the annual financial budget and final accounts, comprehensive business operation plans and other plans of the Bank Thirdly, the Board of Supervisors reviewed the information about financial position The Board of Supervisors regularly reviewed key operating information such as monthly reports on assets and liabilities, deposits and loans, profits and income and expenses submitted by the senior management, and paid attention to changes in the important financial indicators, major operating indicators and major provisions of the Bank Fourthly, the Board of Supervisors supervised external audit management The Board of Supervisors convened a meeting of the Board of Supervisors and debriefed the Work Report on Re-appointment of the Accounting Firm for 2024 at the meeting, assigned members to attend the meetings of the Audit and Consumer Rights Protection Committee of the Board of Directors, and supervised the performance of Directors in communicating with external auditors regarding the 2023 audit work, 2024 audit plan and pre-audit work CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Supervisors 117 II MEETINGS OF THE BOARD OF SUPERVISORS AND ITS SPECIAL COMMITTEES (I) Meetings of the Board of Supervisors During the Reporting Period, the Board of Supervisors of the Bank convened a total of 5 meetings at which 16 resolutions were considered and approved and 41 reports were debriefed and reviewed Details are as follows: 1 The 21st meeting of the fifth session of the Board of Supervisors (Annual Meeting 2023) The meeting was held in Tianjin on March 28, 2024 The meeting was held legally and effectively with 5 Supervisors actually attended 8 resolutions were considered and approved at the meeting and the matters considered included: the Work Report of the Board of Supervisors for 2023, the Independent Opinions of the Board of Supervisors on the Relevant Matters for 2023, the Board of Supervisors’ 2023 Report on Self-Evaluation and Assessment of the Performance of Duties of Supervisors, the Board of Supervisors’ 2023 Assessment Report on the Performance of Duties of the Board of Directors, Senior Management and Their Members, the Profit Distribution Proposal for 2023, the Internal Control Evaluation Report for 2023, the Annual Report 2023, and Work Plan of the Board of Supervisors for 2024 The meeting reviewed 15 reports including the Report on Implementation of New Capital Regulations for 2023, the Report on Collection and Disposal of Non-Performing Assets for 2023, the Report on Comprehensive Risk Management for 2023, the Internal Control Compliance Report for 2023, the Audit Department’s Internal Audit Work Report for 2023, the Conclusion on Consumer Right Protection for 2023 and the Work Plan for 2024, the Conclusion on Case Prevention and Control Work for 2023, the Evaluation Report on Employee Behavior for 2023, the Work Report on Anti-Money Laundering and Counter-Terrorism Financing for 2023, the Report on Handling Consumer Complaints for 2023, the Report on Consumer Complaints for the First Three Quarters of 2023 and the Report on Consumer Complaints for the First Half of 2023, the Self-Evaluation Report on Data Governance for 2023, the Audit Report on Management of Related Party Transactions for 2023, the Audit Report on Management of Wealth Management Business, and the Report on the Follow-up Audit of Consumer Rights Protection Efforts 2 The 22nd meeting of the fifth session of the Board of Supervisors The meeting was held in Tianjin on May 28, 2024 The meeting was held legally and effectively with 5 Supervisors actually attended 3 resolutions were considered and approved at the meeting and the matters considered included: the Proposal on the Resignation of DIAO Qinyi From His Positions Including External Supervisor of CHINA BOHAI BANK CO, LTD, the Proposal on the Resignation of QI Ershi From His Positions Including External Supervisor of CHINA BOHAI BANK CO, LTD, and the Proposal on the Nomination of DU Huibin as External Supervisor of CHINA BOHAI BANK CO, LTD The meeting reviewed 8 reports including the Report on Liability Quality Management for 2023, the Report on the Evaluation of Strategy Execution for 2023, the Audit Report on Bank Acceptance Bill Business, the Audit Report on Capital Management, the Post-Office Audit Report of the Director and Vice Chairman FUNG Joi Lun Alan, the Post-Office Audit Report of the Director YE Baishou, the Consumer Complaints Report for 2023, and the Report on Further Comprehensive Implementation of 2022 Regulatory Reporting of China Bohai Bank 3 The 23rd meeting of the fifth session of the Board of Supervisors The meeting was held in Tianjin on August 28, 2024 The meeting was held legally and effectively with 4 Supervisors actually attended 2 resolutions were considered and approved at the meeting and the matters considered included: the 2024 Interim Report, and the Proposal on the Risk Prevention and Control Management Measures for Criminal Cases CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Supervisors 119 (II) Meetings of Each Special Committee of the Board of Supervisors 1 Nomination Committee of the Board of Supervisors (1) Personnel composition As of the end of the Reporting Period, the Nomination Committee of the Board of Supervisors of the Bank consisted of three members, being external Supervisor Ms DU Huibin, and employees’ representative Supervisors Mr BAI Xinyu and Mr LI Chengbang, respectively (2) Primary duties The Nomination Committee of the Board of Supervisors shall be responsible for formulating standards and procedures for selecting and appointing supervisors, and preliminarily examining the qualifications and conditions of supervisor candidates, and making recommendations to our Board of Supervisors; supervising scientificity and reasonability of remuneration management system and policies of the Bank and remuneration plan of senior management personnel; supervising the election and appointment process of Directors; evaluating the performance of Directors, Supervisors and the senior management comprehensively; performing post-office audits on Directors and the senior management; and dealing with other matters authorized or designated by the Board of Supervisors (3) Meetings and work During the Reporting Period, the Nomination Committee of the Board of Supervisors of the Bank held 2 meetings on March 28, 2024 and May 28, 2024, respectively, and considered and approved 3 resolutions, including: the Board of Supervisors’ 2023 Report on Self-Evaluation and Assessment of the Performance of Duties of Supervisors, the Board of Supervisors’ 2023 Assessment Report on the Performance of Duties of the Board of Directors, Senior Management and Their Members, and the Proposal for the New External Supervisor of the Fifth Session of the Board of Supervisors The attendance of members of the Nomination Committee of the Board of Supervisors of the Bank during the Reporting Period was as follows: Number of Number of Number of scheduled attendances attendances Number of Name attendances in person by proxy absences QI Ershi 2 2 – – WANG Chunfeng 2 2 – – MA Shuming 2 2 – – CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Supervisors 121 III THE INDEPENDENT OPINION OF THE BOARD OF SUPERVISORS ON RELEVANT MATTERS (I) The Bank’s Legal Operations During the Reporting Period, the Bank conducted operation activities in accordance with the laws and its decision-making procedures were legal and valid No violations of laws and regulations, the Articles of Association or other behaviors that harmed the interests of the Bank and its Shareholders were found among Directors or the members of the senior management of the Bank during their performance of duty (II) The Truth in the Financial Reports Deloitte Touche Tohmatsu and Deloitte Touche Tohmatsu Certified Public Accountants LLP have audited the 2024 financial reports of the Bank prepared in accordance with the requirements set out in the IFRS and the China Accounting Standards for Business Enterprises respectively, and standard unqualified audit reports have been issued The Board of Supervisors has no objection to the truthfulness of such financial reports (III) Use of Proceeds Raised During the Reporting Period, the use of proceeds raised of the Bank was consistent with promised use (IV) Purchase and Sale of Assets During the Reporting Period, based on market-oriented approach, the Bank completed two asset transfers to Tianjin JR Assets Management Co, Ltd (天津津融資產管理有限公司), and fulfilled its information disclosure obligations in accordance with relevant laws and regulations, regulatory requirements and relevant requirements of the stock exchange where the Bank’s shares are listed Apart from that, the Bank had no other material disposal or acquisition of assets during the Reporting Period (V) Related Party Transactions The Board of Supervisors has approved the Audit Report on the Related Party Transactions Management for 2024 (VI) Internal Control The Board of Supervisors has considered and approved the internal control evaluation report for 2024 of the Bank (VII) Implementation on Resolutions of the General Meeting The Board of Supervisors has held no objection to all reports and proposals submitted to the Shareholders’ general meeting for consideration by the Board during the Reporting Period, and supervised the implementation on resolutions of the general meeting The Board of Supervisors believes that the Board of Directors has earnestly implemented such resolutions of the general meeting CHINA BOHAI BANK CO, LTD Annual Report 2024 Important Events 123 VI MATERIAL RELATED PARTY TRANSACTIONS AND CONNECTED TRANSACTIONS During the Reporting Period, all related party transactions of the Bank were conducted in accordance with relevant laws and regulations as well as relevant provisions of domestic and overseas regulatory authorities and the Bank’s rules for related party transactions These transactions were conducted in adherence to the general business principles, and based on conditions which were not superior to those granted to an independent third party, and their terms were fair and reasonable and in the interests of the Bank and its Shareholders as a whole The related party transactions of the Bank were mainly the credit-granting related party transactions with the members of the Shareholders’ group Please refer to the “Audit Report and Financial Report: Notes to the Consolidated Financial Statements: ‘Related party transactions’” of this annual report for specific data (I) Related Party Transactions Relating to Daily Operation According to the Administrative Measures for Related Party Transactions of Banking and Insurance Institutions, the material related party transactions of the Bank were all credit-granting related party transactions, and were conducted in accordance with relevant laws and regulations, external regulatory requirements and the Bank’s review procedures During the Reporting Period, the Board of Directors of the Bank approved six resolutions on material related party transactions, including the related party transactions on credit business of Hwabao WP Fund Management Co, Ltd (華寶基金管理有限公司) considered and approved at the 58th meeting of the fifth session of the Board of Directors, the related party transactions on credit business of Tianjin Bohai State-owned Assets Administration Co, Ltd considered and approved at the 62nd meeting of the fifth session of the Board of Directors, the related party transactions on credit business of China National Investment and Guaranty Corporation (中國投融資擔保股份有限公司) and the related party transactions on credit business of Tianjin TEDA Industrial Group Co, Ltd (天津泰達實業集團有限公司) considered and approved at the 64th meeting of the fifth session of the Board of Directors, and the related party transactions on credit business of TEDA Investment Holding Co, Ltd (two transactions) and the related party transactions on credit business of Tianjin TEDA Industrial Group Co, Ltd (天津泰達實業集團有限公司) considered and approved at the 65th meeting of the fifth session of the Board of Directors As of the end of the Reporting Period, the Bank’s net credit amount granted to all related parties were RMB19757 billion according to the standards of the National Financial Regulatory Administration Specifically, the net credit amount granted to TEDA Investment Holding Co, Ltd and its related parties was RMB13981 billion, that granted to China Shipping Investment Co, Ltd and its related parties was RMB476 million, that granted to State Development & Investment Corp, Ltd and its related parties was RMB410 million, that granted to China Baowu Steel Group Corporation Limited and its related parties amounted to RMB2,043 million, and that granted to Oceanwide Industry Co, Ltd and its related parties was RMB2,531 million, and that granted to other related parties reached RMB316 million As of the end of the Reporting Period, according to the standards of Hong Kong Stock Exchange, the Bank’s net credit amount granted to all connected persons amounted to RMB14458 billion Specifically, the Bank extended RMB13981 billion of net credits to TEDA Investment Holding Co, Ltd and its connected persons, RMB476 million to China Shipping Investment Co, Ltd and its connected persons, and RMB07 million to other connected persons The abovementioned transactions are transactions conducted by the Bank with its connected persons in the ordinary course of business on general commercial terms or better terms for the Bank, which are fully exempted in accordance with Chapter 14A of the Listing Rules Non-credit related party transactions between the Bank and related parties, such as deposits, service, leasing, agency sales and custody, and other daily related party transactions, are subject to general commercial terms and conditions no superior to those granted to independent third parties The above-mentioned transactions are connected transactions meeting the full exemption or the minimum exemption level under Chapter 14A of the Listing Rules CHINA BOHAI BANK CO, LTD Annual Report 2024 Important Events 125 XI INTEGRITY OF THE BANK During the Reporting Period, the Bank has not experienced circumstances in which it fails to fulfill the obligations determined by legal documents in effective judgment of the court, and is not liable for a relatively large amount of debts that are overdue XII OTHER MATERIAL EVENTS (I) Obtaining Business Qualification On July 12, 2024, the Bank formally obtained the special membership status of the Shanghai Gold Exchange (II) Issuance of Bonds The Bank issued 10-year fixed rate tier 2 capital bonds with a face value of RMB14 billion on April 18, 2024, with a right allowing issuer to redeem subject to conditions precedent at the end of the 5th year and a coupon rate of 277% per annum The proceeds from the issue of the bonds after deducting expenses for the issuance will be entirely used to replenish the Bank’s tier 2 capital The Bank issued three-year green financial bonds with a face value of RMB5 billion on June 24, 2024, with a fixed coupon rate of 205% per annum The proceeds from the issue of the bonds will be, according to applicable laws and regulatory approvals, used for green industrial projects specified in the Green Bond Endorsed Projects Catalogue (2021 Edition) The Bank issued undated capital bonds with a face value of RMB11 billion on September 13, 2024 The coupon rate is 238% during the first five years, with a coupon rate adjustment period every five years The issuer shall have a conditional redemption right on every interest payment date from the fifth year onwards The proceeds from the issue of the bonds after deducting expenses for the issuance will be entirely used to replenish the Bank’s additional tier 1 capital (III) Rating During the Reporting Period, the Bank actively carried out follow-up rating work of international ratings, and delivered positive information of the Bank to rating companies objectively and accurately As of the end of the Reporting Period, Moody’s rated the Bank as Baa3, and Standard & Poor’s rated the Bank as BBB-, maintaining the “investment grade” rating The rating results objectively and comprehensively reflected the operating conditions, market image and industry status of the Bank XIII SUBSEQUENT EVENTS On February 26, 2025, the Bank issued three-year green financial bonds with a face value of RMB5 billion, with a fixed coupon rate of 189% per annum The proceeds from the issue of the bonds will be, according to applicable laws and regulatory approvals, used for green industrial projects specified in the Green Bond Endorsed Projects Catalogue (2021 Edition) XIV REVIEW OF ANNUAL RESULTS The Bank’s external auditors Deloitte Touche Tohmatsu Certified Public Accountants LLP and Deloitte Touche Tohmatsu have audited the financial reports prepared by the Group in accordance with the requirements set out in the China Accounting Standards for Business Enterprises and the IFRS, and standard unqualified audit reports have been issued The Audit and Consumer Rights Protection Committee under the Board of the Bank has reviewed and approved the Group’s results and financial reports for the year ended December 31, 2024 XV PUBLICATION OF THE ANNUAL REPORT The English and Chinese versions of the annual report prepared by the Bank pursuant to the IFRS and the Listing Rules are available on the websites of the HKEX and the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 127 Independent Auditor’s Report Independent Auditor’s Report to the Shareholders of CHINA BOHAI BANK CO, LTD (A joint stock company incorporated in the People’s Republic of China) OPINION We have audited the consolidated financial statements of CHINA BOHAI BANK CO, LTD (the “Bank”) and its subsidiary (the “Group”) set out on pages 135 to 271 which comprise the consolidated statement of financial position as at 31 December 2024, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in shareholders’ equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information and other explanatory information In our opinion, the accompanying consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2024 and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRS”) Accounting Standards 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 (“ISA”) 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 International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the IESBA 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 judgement, were of most significance in our audit of the consolidated financial statements for 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 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 129 Independent Auditor’s Report KEY AUDIT MATTERS (Continued) Loss allowances of loans and advances to customers measured at amortised cost and financial investments measured at amortised cost (Continued) Key audit matter (Continued) How the matter was addressed in our audit (Continued) The loss allowances for credit-impaired corporate loans • ECL model and advances measured at amortised cost and financial investments measured at amortised cost are principally – assessed the reliability and appropriateness of measured using the discounted cash flow method the ECL model and the reasonableness of key Management exercises judgement in determining parameters used in the model, including: PD, recoverable cash flows based on a range of factors LGD, EAD, discount rate, forward-looking These factors include available remedies for recovery, the information, and evaluated the rationality of financial situation of the borrowers, collateral valuation, the key management judgements on those the seniority of the claim, the existence of other creditors, key parameters; and disposals – verified, on a sample basis, the accuracy ECLs for loans and advances to customers and financial of ECL model data input such as loan investments is a subjective area due to the degree of agreement amount, due date, interest rate, judgement applied by management in determining guarantee method; loss allowances From the Group’s perspective, the determination of the loss allowances for loans and advances – verified, on a sample basis, the calculation to customers and financial investments is heavily dependent logic of ECL model, and tested whether the on the external macro economy and the Group’s internal model reasonably reflected management’s credit risk management strategy modelling methodology We identified the assessment for the ECL allowance as a key audit matter because of the inherent uncertainty and management judgements involved, and because the loss allowance is significant to the financial results and capital of the Group CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 131 Independent Auditor’s Report KEY AUDIT MATTERS (Continued) Fair value of level 3 financial instruments Key audit matter How the matter was addressed in our audit The Group mainly adopts active market quotations Our audit procedures in respect of fair value assessment of and valuation techniques to conduct valuation on the level 3 financial instruments mainly included the following: financial instruments measured at fair value Valuation techniques are adopted by the Group to determine the • Understood, assessed and tested the design and fair value of level 3 financial instruments without active operating effectiveness of internal controls relating market quotations The selection of valuation techniques to validation of valuation models, the use and and significant unobservable inputs requires significant updating of parameters, the input of underlying accounting judgement and estimation by management data, valuation calculations, reviews and approvals related to the fair value assessment of financial At 31 December 2024, the carrying value of financial instruments assets classified as level 3 due to the use of significant unobservable inputs was RMB17,416 million • Selected samples to perform the following audit procedures: We identified fair value assessment of level 3 financial instruments as a key audit matter because the amount – assessed the appropriateness of the valuation involved is significant and the valuation requires significant models, inputs and assumptions used by the judgement and estimation Group; Refer to the accounting policies in “Note 4 (6) to the – assessed and verified the valuation techniques Consolidated Financial Statements: Financial instruments”, used in the valuation of complex financial “Note 5 to the Consolidated Financial Statements: instruments valuation based on the work Significant accounting judgements and estimates” and done by the internal valuation specialists, “Note 50 to the Consolidated Financial Statements: Fair selected samples to perform independent value” for related disclosures valuation and compared the results with the Group’s valuation CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 133 Independent Auditor’s Report 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 to you, as a body, and for no other purpose We do not assume responsibility towards or accept liability to any other person for the contents of this report 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: • 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 • 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 • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors • 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 • 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 • Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the Group financial statements We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit We remain solely responsible for our audit opinion CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 135 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) NOTES 2024 2023 Interest income 54,881,845 60,317,760 Interest expenses (39,339,375) (42,671,771) Net interest income 6 15,542,470 17,645,989 Fee and commission income 3,995,271 5,077,664 Fee and commission expenses (1,021,212) (1,078,743) Net fee and commission income 7 2,974,059 3,998,921 Net trading gains 8 941,146 502,026 Net gains arising from financial investments 9 5,972,326 2,763,298 Other operating income 10 51,588 87,136 Operating income 25,481,589 24,997,370 Operating expenses 11 (10,488,740) (10,713,146) Impairment losses on assets 14 (9,659,819) (9,121,147) Profit before taxation 5,333,030 5,163,077 Income tax expenses 15 (77,215) (82,174) Net profit 5,255,815 5,080,903 The accompanying notes to the financial statements form part of the consolidated financial statements CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 137 Consolidated Statement of Financial Position At 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 31 December NOTES 2024 2023 Assets Cash and deposits with the central bank 17 148,162,149 103,494,179 Deposits with banks and other financial institutions 18 11,405,462 20,938,491 Placements with banks and other financial institutions 19 4,885,299 12,353,608 Derivative financial assets 20 2,448,184 1,551,181 Financial assets purchased under resale agreements 21 18,531,145 6,532,553 Loans and advances to customers 22 925,361,742 920,394,849 Financial investments: 23 Financial investments measured at fair value through profit or loss (“FVTPL”) 192,864,991 161,057,566 Financial investments measured at FVTOCI 177,376,537 117,150,761 Financial investments measured at amortised cost 330,196,792 354,928,465 Investment in associate 25 – – Property and equipment 26 3,217,544 3,586,673 Deferred tax assets 27 12,362,922 14,759,051 Right-of-use assets 28 3,606,436 3,886,770 Other assets 29 13,422,925 12,099,689 Total assets 1,843,842,128 1,732,733,836 Liabilities and shareholders’ equity Liabilities Borrowings from the central bank 30 121,378,473 133,787,964 Deposits from banks and other financial institutions 31 150,561,544 158,762,222 Placements from banks and other financial institutions 32 23,144,745 34,920,012 Financial liabilities at FVTPL 33 171,916 – Derivative financial liabilities 20 1,799,883 990,612 Financial assets sold under repurchase agreements 34 57,818,338 66,634,253 Deposits from customers 35 1,067,561,795 934,593,879 Income tax payable (621,775) 849,131 Debt securities issued 36 290,863,182 267,923,368 Lease liabilities 37 3,722,824 4,115,588 Other liabilities 38 17,316,375 15,754,106 Total liabilities 1,733,717,300 1,618,331,135 The accompanying notes to the financial statements form part of the consolidated financial statements CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 139 Consolidated Statement of Changes in Shareholders’ Equity For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) Shareholders’ equity attributable to the parent company Non- Share Other equity Capital Surplus General Other Retained controlling Notes capital instruments reserve reserve reserve reserves profits Sub-total interests Total Balance at 1 January 2024 17,762,000 19,961,604 10,732,077 7,828,688 20,678,511 (2,718,089) 40,157,910 114,402,701 – 114,402,701 Changes in equity for the year: Net profit – – – – – – 5,255,815 5,255,815 – 5,255,815 Other comprehensive income – – – – – 420,152 – 420,152 – 420,152 Total comprehensive income – – – – – 420,152 5,255,815 5,675,967 – 5,675,967 Reduction in capital of other equity instruments holders 40 – (19,961,604) (38,396) – – – – (20,000,000) – (20,000,000) Capital contribution from other equity instruments holders 40 – 11,000,000 (3,840) – – – – 10,996,160 – 10,996,160 Appropriation to surplus reserve 41 – – – 568,595 – – (568,595) – – – Appropriation to general reserve 41 – – – – 427,718 – (427,718) – – – Other comprehensive income transferred to retained earnings 23(b) – – – (468,150) – 4,030,861 (3,562,711) – – – Distribution to other equity instruments holders 42 – – – – – – (950,000) (950,000) – (950,000) Balance at 31 December 2024 17,762,000 11,000,000 10,689,841 7,929,133 21,106,229 1,732,924 39,904,701 110,124,828 – 110,124,828 Shareholders’ equity attributable to the parent company Non- Share Other equity Capital Surplus General Other Retained controlling Notes capital instruments reserve reserve reserve reserves profits Sub-total interests Total Balance at 1 January 2023 17,762,000 19,961,604 10,732,077 7,342,356 20,245,453 (3,038,853) 36,946,397 109,951,034 – 109,951,034 Changes in equity for the year: Net profit – – – – – – 5,080,903 5,080,903 – 5,080,903 Other comprehensive income – – – – – 320,764 – 320,764 – 320,764 Total comprehensive income – – – – – 320,764 5,080,903 5,401,667 – 5,401,667 Appropriation to surplus reserve 41 – – – 486,332 – – (486,332) – – – Appropriation to general reserve 41 – – – – 433,058 – (433,058) – – – Distribution to other equity instruments holders 42 – – – – – – (950,000) (950,000) – (950,000) Balance at 31 December 2023 17,762,000 19,961,604 10,732,077 7,828,688 20,678,511 (2,718,089) 40,157,910 114,402,701 – 114,402,701 The accompanying notes to the financial statements form part of the consolidated financial statements CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 141 Consolidated Statement of Cash Flows For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) NOTES 2024 2023 Cash flows from investing activities Proceeds from disposal sale and redemption of investments 765,126,414 563,110,591 Proceeds received from investment activities 1,200,894 14,808,078 Proceeds from disposal of property and equipment and other long-term assets 95,621 3,794 Purchases of investments (809,167,035) (636,435,101) Purchases of property and equipment, intangible assets and other long-term assets (562,926) (598,950) Net cash flows used in investing activities (43,307,032) (59,111,588) Cash flows from financing activities Proceeds from debt securities issued 422,032,323 387,813,695 Proceeds from other equity instruments issued 11,000,000 – Repayment of debt securities issued (400,723,591) (398,851,417) Interest paid on debt securities issued (5,135,760) (5,051,125) Repayment of other equity instruments (20,000,000) – Payments for distribution to other equity instruments holders (950,000) (950,000) Repayment of lease liabilities (1,106,039) (1,143,440) Other cash payments relating to financing activities (3,840) – Net cash flows generated from/(used in) financing activities 5,113,093 (18,182,287) Effect of foreign exchange rate changes on cash and cash equivalents 72,153 282,668 Net increase in cash and cash equivalents 46(a) 54,787,392 4,297,398 Cash and cash equivalents as at 1 January 67,382,604 63,085,206 Cash and cash equivalents as at 31 December 46(b) 122,169,996 67,382,604 Net cash flows generated from operating activities include: Interest received 40,022,856 46,777,590 Interest paid (33,795,767) (35,117,273) The accompanying notes to the financial statements form part of the consolidated financial statements CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 143 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 2 BASIS OF PREPARATION (1) Statement of compliance The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) Accounting Standards issued by the International Accounting Standards Board as well as the disclosure requirements of Hong Kong Companies Ordinance and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (2) Basis of preparation Other items in the consolidated financial statements have been prepared under the historical cost convention except for certain financial instruments measured at fair value, as further explained in the respective accounting policies below The preparation of financial statements in conformity with IFRSs and relevant regulatory requirements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses Actual results may differ from these estimates Judgements made by management in the application of IFRSs that have significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 5 3 APPLICATION OF IFRSs AND AMENDMENTS (1) IFRSs and amendments mandatorily effective for the current year In the current year, the Group has applied, for the first time, the following amendments to IFRSs issued by the IASB which are mandatorily effective for the annual periods beginning on or after 1 January 2024 for the preparation of the Group’s consolidated financial statements: Amendments to IFRS 16 Lease Liability in a Sale and Leaseback Amendments to IAS 1 Classification of Liabilities as Current or Non-current Amendments to IAS 1 Non-current Liabilities with Covenants Amendments to IAS 7 and Amendments to IFRS 7 Supplier’s Financing Arrangements The directors of the Bank believe that the application of the above amendments has no material impact on the financial position and the financial performance for the current and prior years and the disclosures set out in these consolidated financial statements of the Group CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 145 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (1) Subsidiary (Continued) In the Bank’s statement of financial position, long-term equity investment in subsidiary is accounted for using the cost method for subsequent measurement Dividends declared by subsidiary are recognised in profit or loss except for cash dividends or profit distributions declared but not yet distributed that have been included in the price or consideration paid in obtaining the investments In the Bank’s statement of financial position, interest in subsidiary is accounted for using the cost less impairment losses (2) Non-controlling interests Non-controlling interests represent the equity in a subsidiary not attributable to the parent company directly or indirectly Non-controlling interests are presented in the consolidated statement of financial position under shareholders’ equity, separately from equity attributable to the shareholders of the parent company The net profit and comprehensive income attributable to the non-controlling interests and the shareholders of the parent company are presented separately in the consolidated statement of profit or loss and other comprehensive income Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within the consolidated statement of shareholders’ equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised (3) Associate An associate is an entity over which the Group has significant influence but not control or joint control The significant influence refers to the power to be involved in making decisions on financial and operational policies of the investee, but control or joint control with other parties to formulate these policies is not allowed Investments in associates are recognised in the consolidated financial statements using the equity method, and the cost is used as initial recorded value An adjustment is made to the excess (if any) of the fair value of the net identifiable asset of the investee over the investment cost at the acquisition date Subsequently, adjustments will be made based on the changes in the Group’s share of net assets of the associate upon acquisition Any excess of the Group’s share of the fair value of net identifiable asset of the associate over the investment cost is recognised in profit or loss for the period upon acquisition of investments in the associate When the Group’s share of losses of the associate is in excess of its share of the equity, the equity held by the Group will be reduced to zero without recognition of additional losses, except that the Group has to fulfil statutory or presumed obligations or pay on behalf of the associate In this regard, the Group’s equity held in the associate is the carrying amount of investments calculated under the equity method, as well as the substantial portion of the Group’s equity of net investment in the associate CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 147 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (6) Financial instruments A financial instrument is any contract that gives rise to a financial asset of an entity and a financial liability or equity instrument of another entity (i) Initial recognition and measurement of financial instruments A financial asset or financial liability is recognised in the statement of financial position when the Group becomes a party to the contractual provisions of a financial instrument A financial assets and financial liabilities are measured initially at fair value For financial assets and financial liabilities at FVTPL, any related directly attributable transaction costs are charged to profit or loss; for other categories of financial assets and financial liabilities, any related directly attributable transaction costs are included in their initial costs (ii) Classification of financial assets The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics On initial recognition, a financial asset is classified as measured at amortised cost, at FVTOCI, or at FVTPL Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL: – it is held within a business model whose objective is to hold assets to collect contractual cash flows; and – its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding An investment in debt instrument is measured at FVTOCI if it meets both of the following conditions and is not designated as at FVTPL: – it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and – its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 149 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (6) Financial instruments (Continued) (iii) Subsequent measurement of financial assets (Continued) – Investments in debt instruments at FVTOCI These assets are subsequently measured at fair value Interest income calculated using the effective interest method, impairment and foreign exchange gains and losses are recognised in profit or loss Other net gains and losses are recognised in other comprehensive income On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss – Investments in equity instruments at FVTOCI These assets are subsequently measured at fair value Dividends are recognised as income in profit or loss for the period Other net gains and losses are recognised in other comprehensive income On derecognition, gains and losses accumulated in other comprehensive income are reclassified to retained earnings (iv) Classification and subsequent measurement of financial liabilities Financial liabilities are classified as at FVTPL and other financial liabilities – Financial liabilities at FVTPL A financial liability is classified as at FVTPL if it is classified as held-for-trading (including derivative financial liability) or it is designated as such on initial recognition Financial liabilities at FVTPL are subsequently measured at fair value and net gains and losses (including any interest expenses) are recognised in profit or loss, unless the financial liabilities are part of a hedging relationship – Other financial liabilities Other financial liabilities are subsequently measured at amortised cost using the effective interest method (v) Impairment of financial instruments The Group recognises loss allowances for expected credit loss (ECL) on: – financial assets measured at amortised cost; – investments in debt instruments at FVTOCI; – credit commitments and financial guarantee contracts, etc Financial assets measured at fair value, including financial assets at FVTPL, investments in equity instruments designated at FVTOCI and derivative financial assets, are not subject to the ECL assessment CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 151 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (6) Financial instruments (Continued) (v) Impairment of financial instruments (Continued) Presentation of allowance for ECL ECLs are re-measured at each date of statement of financial position to reflect changes in the financial instrument’s credit risk since initial recognition Any change in the ECL amount is recognised as an impairment loss or reversal in profit or loss The Group recognises an impairment gain or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognised in other comprehensive income For credit commitments and financial guarantee contracts, the Group recognises loss allowance in other liabilities (loss allowance for credit commitments) Write-off The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery A write-off constitutes a derecognition event This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in profit or loss in the period in which the recovery occurs (vi) Determination of fair value of financial assets and financial liabilities Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date If there is an active market for a financial asset or financial liability, the quoted price in the active market without adjusting for transaction costs that may be incurred upon future disposal or settlement is used to establish the fair value of the financial asset or financial liability The quoted price in the active market should be readily and regularly available from independent sources (eg the exchange, broker, industry group or pricing service agency) with prudent utilisation of purchase price, selling price and middle price The Group should use market valuation method for fair value assessment as much as is feasible, which represents the prices in actual and regularly market transactions on an arm’s length basis CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 153 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (6) Financial instruments (Continued) (vii) Derecognition of financial assets and financial liabilities (Continued) Where the Group has transferred its rights to receive cash flows from an asset, or has retained its rights to receive cash flows from the asset but assumed the obligation to pay those cash flows to eventual recipients while meeting the conditions of the transfer of financial assets, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay Where a transfer of a financial asset in its entirety meets the criteria for derecognition, the difference between the two amounts below is recognised in profit or loss: – the carrying amount of the financial asset transferred measured at the date of derecognition; – the sum of the consideration received from the transfer and, when the transferred financial asset is an investment in debt instruments at FVTOCI, any cumulative gain or loss that has been recognised directly in other comprehensive income for the part derecognised The Group derecognises a financial liability only when its contractual obligation (or part of it) is extinguished (viii) Offsetting Financial assets and financial liabilities are generally presented separately in the statement of financial position, and are not offset However, a financial asset and a financial liability are offset and the net amount is presented in the statement of financial position when both of the following conditions are satisfied: – The Group currently has a legally enforceable right to set off the recognised amounts – The Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability simultaneously (7) Perpetual bonds At initial recognition, the Group classifies the perpetual bonds issued or their components as financial liabilities or equity instruments based on their contractual terms and their economic substance after considering the definition of financial liabilities and equity instruments Perpetual bonds issued that should be classified as equity instruments are recognised in equity based on the actual amount received Any distribution of dividends or interests during the instruments’ duration is treated as profit appropriation When the perpetual bonds are redeemed according to the contractual terms, the redemption price is charged to equity CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 155 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (9) Embedded derivative financial instruments An embedded derivative is a component of a hybrid contract that also includes a non-derivative host with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative For hybrid instrument where the host contract is a financial asset, the Group classifies and measures the instrument as financial asset as a whole For hybrid instrument where the host contract is a non-financial asset, the Group separates the embedded derivative from the hybrid instrument and treats it as a standalone derivative if all the following conditions are satisfied: – the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; and – a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and – the hybrid (combine) instrument related to derivative instrument is not measured at fair value with changes recognised in profit or loss The separated embedded derivative is measured at fair value, with subsequent changes recognised in profit or loss If the Group is unable to measure the embedded derivative separately either at acquisition or at a subsequent balance sheet date, it designates the entire hybrid instrument as a financial instrument at fair value through profit or loss (10) Financial assets held under resale and repurchase agreements Financial assets purchased under resale agreements are bonds, loans and bills purchased by the Group at certain prices from the sellers under agreements with the commitment to resell these instruments to the original sellers in the future at predetermined prices Financial assets sold under repurchase agreements refer to bonds, loans and bills sold by the Group at certain prices under agreements with the commitment to buy back these instruments in the future at predetermined prices The assets purchased under resale agreements are not recognised, and the payments (including interests accrued) are recognised as receivables on the statement of financial position and are carried at amortised cost Financial assets sold subject to a simultaneous agreement to repurchase these assets are retained in the statements of financial position and measured in accordance with their original measurement principles The proceeds (including interests accrued) from the sale are reported as liabilities and are carried at amortised cost Interest earned on reverse repurchase agreements and interest incurred on repurchase agreements are recognised respectively as interest income and interest expenses over the life of each agreement using the effective interest method CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 157 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (12) Leases A lease is a contract whereby the lessor conveys to the lessee in return for a consideration the right to use an asset for an agreed period of time At inception of a contract, the Group assesses whether a contract is, or contains, a lease A contract is, or contains, a lease if a party of the contract conveys the right to control the use of one or more identified assets for a period of time in exchange for consideration (a) As a lessee At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand- alone prices The Group recognises a right-of-use asset and a lease liability of a lease at the lease commencement date The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability, any lease payments made at or before the commencement date (less any lease incentives received), any initial direct expenses incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease The right-of-use asset is depreciated using the straight-line method If the lessee is reasonably certain to exercise a purchase option by the end of the lease term, the right-of-use asset is depreciated over the remaining useful lives of the underlying asset Otherwise, the right-of-use asset is depreciated from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term Impairment losses of right-of-use assets are accounted for in accordance with the accounting policy described in Note 4 (16) The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date In calculating the present value of lease payments, the Group uses the incremental borrowing rate if the interest rate implicit in the lease is not readily determinable Generally, the Group uses the incremental borrowing rate as the discount rate CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 159 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (12) Leases (Continued) (a) As a lessee (Continued) Short-term leases and leases of low-value assets The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets The Group recognises the lease payments associated with these leases in profit or loss or as the cost of the assets where appropriate using the straight-line method over the lease term (b) As a lessor The Group determines at lease inception whether each lease is a finance lease or an operating lease A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset irrespective of whether the legal title to the asset is eventually transferred An operating lease is a lease other than a finance lease When the Group is a sub-lessor, it assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset If the head lease is a short-term lease to which the Group applies practical expedient described above, then it classifies the sub-lease as an operating lease When lease and non-lease components are contained in a contract, the Group allocates the consideration under the contract to each component in accordance with the IFRS 15 Lease receipts from operating leases are recognised as rental income using the straight-line method over the lease term, as a portion of “Other operating income” (13) Land use rights Land use rights are initially recognised at costs and amortised using the straight-line basis over the legal term of use through profit and loss Impaired land use rights are amortised net of accumulated impairment losses Impairment losses on land use rights are accounted for in accordance with the accounting policies as set out in Note 4 (16) (14) Intangible assets The intangible assets of the Group have finite useful lives The intangible assets are stated at cost less accumulated amortisation and impairment loss The cost of intangible assets less residual value and impairment loss is amortised on the straight-line method over the estimated useful lives The respective amortisation periods for intangible assets of the Group are as follows: Computer software and system development expenses 3 – 5 years CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 161 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (16) Allowance for impairment losses on non-financial assets (Continued) An asset’s fair value less costs to sell is the amount determined by the price of a sale agreement in an arm’s length transaction, less the costs that are directly attributable to the disposal of the asset The present value of expected future cash flows of an asset is determined by discounting the future cash flows, estimated to be derived from continuing use of the asset and from its ultimate disposal to their present value using a pre-tax discount rate that reflects expected future cash flows, the useful life and the discount rate specific to the asset An impairment loss is recognised in profit or loss if the carrying amount of an asset exceeds its recoverable amount A provision for an impairment loss of the asset is recognised accordingly If, in a subsequent period, the amount of impairment loss of the non-financial asset decreases and the decrease can be linked objectively to an event occurring after impairment was recognised, the previously recognised impairment loss is reversed through the profit or loss A reversal of impairment loss is limited to the asset’s carrying amount that would have been determined had no impairment loss been recognised in prior periods (17) Employee benefits Employee benefits include short-term employee benefits, post-employment benefits and other long-term employee benefits provided in various forms of consideration in exchange for service rendered by employees or compensations for the termination of employment relationship Short-term employee benefits include employee wages or salaries, bonuses, allowances and subsidies, staff welfare, premiums or contributions on medical insurance, work injury insurance and maternity insurance, housing funds, union running costs and employee education costs, short-term paid absences Short-term employee benefits are recognised as liabilities in the accounting period in which the service is rendered by the employees based on the amounts paid or the statutory provisioning basis or ratio, with corresponding amounts charged to the profit or loss The Group’s post-employment benefit plans are defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into a separate fund and will have no obligation to pay further contributions During the reporting period, the Group’s post-employment benefits mainly include the social pension schemes, unemployment insurance and annuity plan The social pension schemes and unemployment insurance are calculated according to the base and proportion stipulated by the nation, and the annuity plan is calculated according to a certain proportion of the employees’ total wages in the prior year The amounts based on the above calculations are recognised as liabilities in the accounting period in which the service has been rendered by the employees, with corresponding amounts charged to the profit or loss for the period CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 163 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (18) Income tax (Continued) Current tax balances and deferred tax balances, and movements therein, are presented separately from each other and are not offset Current tax assets are offset against current tax liabilities, and deferred tax assets against deferred tax liabilities, if the Group has the legally enforceable right to set off current tax assets against current tax liabilities and the following additional conditions are met: – in the case of current tax assets and liabilities, the Group intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously; or – in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the same taxation authority on either: – the same taxable entity; or – different taxable entities, which, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered, intend to realise the current tax assets and settle the current tax liabilities on a net basis or realise and settle simultaneously (19) Financial guarantees, provisions and contingent liabilities (i) Financial guarantees Financial guarantees are contracts that require the issuer (the “guarantor”) to make specified payments to reimburse the beneficiary of the guarantee (“holder”) for a loss that the holder incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument The fair value of the guarantee (being the guarantee fees received) is initially recognised as deferred income in other liabilities The deferred income is amortised in profit or loss over the term of the guarantee as income from financial guarantees issued The amount of the liability is subsequently measured at the higher of the amount of the provision for losses determined in accordance with the principles of impairment of financial instruments or the amount initially recognised less accumulated amortisation of the gain related to the financial guarantee contract The increase in the financial guarantee liability is recognised in the profit and loss statement In terms of off-balance sheet credit commitments, the Group applies ECL model to measure the loss caused by particular debtors incapable of paying due debts, which is presented in provisions CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 165 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (21) Income recognition (Continued) The following is the description of accounting policies regarding income from the Group’s principal activities: (i) Interest income Interest income for financial assets is recognised in profit or loss as it is incurred, based on the time for alienation of right to use capital and effective interest rates Interest income includes the amortisation of any discount or premium or differences between the initial carrying amount of an interest-bearing asset and its amount at maturity calculated using the effective interest rate The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating the interest income over the reporting period The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset When calculating the effective interest rate, the Group estimates cash flows considering all contractual terms of the financial instrument (for example, prepayment, call and similar options) but does not consider future credit losses The calculation includes all fees and points paid or received between parties to the contract, transaction costs and all other premiums or discounts that are an integral part of the effective interest rate Interest on the impaired assets is recognised based on the amortised cost of the loan (ie, the gross carrying amount net of the allowance for ECLs) and the effective interest rate (ii) Fee and commission income The Group earns fee and commission income from a diverse range of services it provides to its customers The fee and commission income recognised by the Group reflects the amount of consideration to which the Group expects to be entitled in exchange for transferring promised services to customers, and income is recognised when its performance obligation in contracts is satisfied The Group recognises income over time by measuring the progress towards the complete satisfaction of a performance obligation, if one of the following criteria is met: – The customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs; – The customer controls the service provided by the Group in the course of performance or; – The Group does not provide service with an alternative use to the Group, and the Group has an enforceable right to payment for performance completed to date In other cases, the Group recognises revenue at a point in time at which a customer obtains control of the promised services CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 167 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (24) Related parties (Continued) (b) An entity is related to the Group if any of the following conditions applies: (i) The entity and the Group are members of the same Group (which means that each parent, subsidiary and fellow subsidiary is related to the others); (ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a Group of which the other entity is a member); (iii) Both entities are joint ventures of the same third party; (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity; (v) The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group; (vi) The entity is controlled or jointly controlled by a person identified in (a) (vii) A person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity); or (viii) The entity, or any member of the Group of which it is a part, provides key management personnel services to the Group or to the Group’s parent Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity (25) Segment reporting The Group determines its operating segments based on its internal organisational structure, management requirements and internal reporting systems If two or more operating segments have similar economic characteristics and meet certain conditions, they are combined into one operating segment for disclosure Based on the operating segments, the Group determines the reporting segment after considering the materiality principle and discloses the operating segments that meet the conditions by taking into account various factors such as the products and services involved in the management’s organisational management, as well as the geographical region In preparing segment reports, revenue from intersegment transactions is measured on the basis of actual transaction prices The accounting policies used in the preparation of segment reports are consistent with those used in the preparation of the Group’s financial statements CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 169 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 5 SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (Continued) (4) Consolidation of structured entities The Group applies its judgement to determine whether the control indicators set out in Note 4 (1) indicate that the Group controls a non-principal guaranteed wealth management product, trust plan or an designated asset management plan The Group manages or invests in non-principal guaranteed wealth management products, trust plans and designated asset management plans To determine whether the Group controls such structured entities, the Group mainly evaluates factors such as its decision-making scope as a manager, rights enjoyed by other parties, remuneration for providing management services and exposure to variable return risks, and determines whether the Group is the principal or agent, and then determines whether the structured entities should be consolidated 6 NET INTEREST INCOME 2024 2023 Interest income arising from Deposits with the central bank 968,083 1,062,880 Deposits with banks and other financial institutions 328,482 329,974 Placements with banks and other financial institutions 605,490 887,569 Loans and advances to customers – Corporate loans and advances 27,486,177 24,945,056 – Personal loans 10,783,079 17,705,626 – Discounted bills 1,107,269 1,169,830 Financial assets purchased under resale agreements 494,527 494,594 Financial investments 13,108,738 13,722,231 Sub-total 54,881,845 60,317,760 Interest expenses on Borrowings from the central bank (3,216,085) (3,566,900) Deposits from banks and other financial institutions (4,825,991) (5,129,480) Placements from banks and other financial institutions (1,568,431) (1,413,741) Deposits from customers (22,162,919) (24,454,658) Financial assets sold under repurchase agreements (799,106) (775,769) Debt securities issued (6,766,843) (7,331,223) Sub-total (39,339,375) (42,671,771) Net interest income 15,542,470 17,645,989 The above interest income does not include interest income from financial instruments at FVTPL CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 171 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 10 OTHER OPERATING INCOME 2024 2023 Government grants 12,176 50,727 Rental income 9,771 12,286 Income from long-term suspended accounts 3,092 15,447 Others 26,549 8,676 Total 51,588 87,136 11 OPERATING EXPENSES 2024 2023 Staff costs – Salaries, bonuses and allowances 3,754,029 3,719,174 – Social insurance and annuity 1,114,388 1,042,089 – Housing funds 629,940 585,837 – Staff welfare 242,938 271,370 – Employee education expenses and labour union expenses 112,325 115,533 – Others 101,256 225,854 Sub-total 5,954,876 5,959,857 Depreciation and amortisation 1,745,140 1,740,894 Taxes and surcharges 417,533 429,065 Interest expenses on lease liabilities 142,038 157,296 Auditor’s remuneration 6,207 5,290 Other general and administrative expenses 2,222,946 2,420,744 Total 10,488,740 10,713,146 For the year ended 31 December 2024, rental expenses relating to short-term leases and leases of low-value assets amounted to RMB62 million (for the year ended 31 December 2023: RMB41 million) For the year ended 31 December 2024, expensed research and development expenditure incurred by the Group amounted to RMB656 million (for the year ended 31 December 2023: RMB721 million) CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 173 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 12 DIRECTORS’ AND SUPERVISORS’ EMOLUMENTS (Continued) Year ended 31 December 2023 Housing funds Discretionary and social bonuses for Notes Fees Salaries insurances Annuities Others prior years Total Executive directors Wang Jinhong (1) – 60 52 32 3 – 147 Qu Hongzhi – 1,185 205 129 3 1,167 2,689 Du Gang (2) – 948 152 128 3 859 2,090 Zhao Zhihong (3) – 948 205 129 3 564 1,849 Li Fuan (21) – 80 29 30 3 829 971 Non-executive directors Au Siu Luen (4) – – – – – – – Yuan Wei – – – – – – – Duan Wenwu (5) – – – – – – – Hu Aimin – – – – – – – Zhang Yunji – – – – – – – Fung Joi Lun Alan (22) – – – – – – – Ye Baishou (23) – – – – – – – Independent non- executive directors Mao Zhenhua (9) 350 – – – – – 350 Chi Guotai (10) 350 – – – – – 350 Mu Binrui (11) 350 – – – – – 350 Tse Yat Hong 350 – – – – – 350 Zhu Ning (12) 350 – – – – – 350 Shum Siu Hung Patrick 233 – – – – – 233 Employee supervisors Wang Chunfeng (16) – 240 205 66 3 386 900 Ma Shuming (17) – 845 205 129 3 1,247* 2,429 External supervisors Qi Ershi (19) 175 – – – – – 175 Diao Qinyi (20) 175 – – – – – 175 Hui Yung Chris 175 – – – – – 175 Total 2,508 4,306 1,053 643 21 5,052* 13,583 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 175 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 12 DIRECTORS’ AND SUPERVISORS’ EMOLUMENTS (Continued) Notes: (Continued) (13) On 14 October 2024, Mr Bai Xinyu was appointed as employee supervisor of the Bank; on 21 October 2024, Mr Bai Xinyu was appointed as chief supervisor of the Bank (14) On 14 October 2024, Mr Li Chengbang was appointed as supervisor of the Bank (15) On 14 October 2024, Ms Zhang Hui was appointed as supervisor of the Bank (16) On 19 July 2024, Mr Wang Chunfeng resigned as chief supervisor of the Bank; on 14 October 2024, Mr Wang Chunfeng resigned as employee supervisor of the Bank (17) On 14 October 2024, Mr Ma Shuming resigned as supervisor of the Bank (18) On 28 June 2024, Ms Du Huibin was appointed as supervisor of the Bank (19) On 28 June 2024, Mr Qi Ershi resigned as supervisor of the Bank (20) On 28 May 2024, Mr Diao Qinyi resigned as supervisor of the Bank (21) On 18 July 2023, Mr Li Fuan resigned as chairman and executive director of the Bank (22) On 26 September 2023, Mr Fung Joi Lun Alan resigned as vice chairman and non-executive director of the Bank (23) On 1 November 2023, Mr Ye Baishou resigned as non-executive director of the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 177 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 15 INCOME TAX EXPENSES (a) Income tax expenses: Note 2024 2023 Current tax (807,170) 1,842,479 Deferred tax 27(b) 884,385 (1,760,305) Total 77,215 82,174 (b) Reconciliations between income tax expenses and accounting profit are as follows: 2024 2023 Profit before taxation 5,333,030 5,163,077 PRC statutory income tax rate 25% 25% Income tax calculated at PRC statutory tax rate 1,333,258 1,290,769 Non-deductible expenses 360,002 404,627 Non-taxable income (i) (1,140,724) (1,289,414) Deductible interest expenses on undated capital bonds (237,500) (237,500) Others (237,821) (86,308) Income tax expenses 77,215 82,174 (i) The non-taxable income mainly represents the interest income arising from the People’s Republic of China (“PRC”) government bonds, municipal debts, and dividend income from funds 16 BASIC AND DILUTED EARNINGS PER SHARE 2024 2023 Net profit for the period attributable to shareholders of the parent company 5,255,815 5,080,903 Less: Interest on undated capital bonds declared (950,000) (950,000) Net profit for the period attributable to ordinary shareholders of the parent company 4,305,815 4,130,903 Weighted average number of ordinary shares in issue (in thousands) 17,762,000 17,762,000 Basic and diluted earnings per share (in RMB Yuan) 024 023 There is no difference between basic and diluted earnings per share as there were no potentially dilutive shares outstanding during the years CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 179 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 18 DEPOSITS WITH BANKS AND OTHER FINANCIAL INSTITUTIONS Analysed by type and location of counterparty: 31 December 2024 2023 Deposits in Chinese mainland – Banks 6,077,852 12,770,164 Sub-total 6,077,852 12,770,164 Deposits outside Chinese mainland – Banks 5,351,959 8,189,899 Sub-total 5,351,959 8,189,899 Interests accrued 6,739 5,372 Less: Allowances for impairment losses (31,088) (26,944) Total 11,405,462 20,938,491 19 PLACEMENTS WITH BANKS AND OTHER FINANCIAL INSTITUTIONS Analysed by type and location of counterparty: 31 December 2024 2023 Placements in Chinese mainland – Banks 601,261 – – Other financial institutions 3,740,000 12,190,000 Sub-total 4,341,261 12,190,000 Placements outside Chinese mainland – Banks 490,070 – Sub-total 490,070 – Interests accrued 122,454 236,648 Less: Allowances for impairment losses (68,486) (73,040) Total 4,885,299 12,353,608 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 181 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 21 FINANCIAL ASSETS PURCHASED UNDER RESALE AGREEMENTS (a) Analysed by type and location of counterparty 31 December 2024 2023 Financial assets purchased under resale agreements – Banks in Chinese mainland 9,407,700 1,500,000 – Other financial institutions in Chinese mainland 9,120,914 5,035,008 Sub-total 18,528,614 6,535,008 Interests accrued 5,074 1,337 Less: Allowances for impairment losses (2,543) (3,792) Total 18,531,145 6,532,553 (b) Analysed by asset types 31 December 2024 2023 Bonds 18,528,614 6,535,008 Interests accrued 5,074 1,337 Less: Allowances for impairment losses (2,543) (3,792) Total 18,531,145 6,532,553 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 183 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 22 LOANS AND ADVANCES TO CUSTOMERS (Continued) (b) Loans and advances to customers (excluding interests accrued) analysed by industry sector 31 December 2024 Loans and advances secured by Amount Percentage collaterals Leasing and commercial services 239,347,741 2556% 54,705,862 Real estate 93,339,050 997% 68,096,721 Manufacturing 87,787,078 937% 17,680,869 Water conservancy, environment and public facilities management 68,171,356 728% 4,907,660 Wholesale and retail 51,153,524 546% 14,912,204 Construction 28,175,257 301% 10,026,561 Finance 26,074,303 278% 3,892,199 Transportations, storage and post 14,239,861 152% 4,689,990 Production and supply of electricity, heat, gas and water 13,886,782 148% 1,054,099 Information transmission, software and IT services 7,776,105 083% 1,461,374 Scientific research and technical services 6,650,275 071% 1,249,784 Mining 6,463,006 069% 796,382 Education 3,614,001 039% 2,528,999 Others 8,057,674 086% 2,254,062 Sub-total of corporate loans and advances 654,736,013 6991% 188,256,766 Personal loans 222,027,091 2371% 167,870,841 Discounted bills 59,727,587 638% 59,727,587 Gross loans and advances to customers 936,490,691 10000% 415,855,194 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 185 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 22 LOANS AND ADVANCES TO CUSTOMERS (Continued) (c) Analysed by geographical sector (excluding interests accrued) 31 December 2024 Loans and advances secured by Amount Percentage collaterals Northern and Northeastern China 394,668,711 4214% 176,092,973 Eastern China 260,038,530 2777% 94,784,509 Central and Southern China 198,630,819 2121% 107,202,979 Western China 83,152,631 888% 37,774,733 Gross loans and advances to customers 936,490,691 10000% 415,855,194 31 December 2023 Loans and advances secured by Amount Percentage collaterals Northern and Northeastern China 431,885,105 4631% 207,904,141 Eastern China 217,892,309 2336% 98,384,941 Central and Southern China 205,393,575 2202% 118,399,337 Western China 77,473,446 831% 39,846,275 Gross loans and advances to customers 932,644,435 10000% 464,534,694 The geographical areas are categorised as follows: Northern and Northeastern China includes Head Office, Beijing Branch, Tianjin Branch, Tianjin Pilot Free Trade Zone Branch, Dalian Branch, Hohhot Branch, Taiyuan Branch, Shijiazhuang Branch, Changchun Branch and Shenyang Branch Eastern China includes Nanjing Branch, Hangzhou Branch, Jinan Branch, Shanghai Branch, Shanghai Pilot Free Trade Zone Branch, Hefei Branch, Suzhou Branch, Qingdao Branch, Ningbo Branch and Nanchang Branch Central and Southern China includes Guangzhou Branch, Shenzhen Branch, Hong Kong Branch, Changsha Branch, Wuhan Branch, Fuzhou Branch, Zhengzhou Branch, Xiamen Pilot Free Trade Zone Branch, Haikou Branch and Nanning Branch Western China includes Chengdu Branch, Xi’an Branch, Chongqing Branch, Guiyang Branch and Kunming Branch CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 187 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 22 LOANS AND ADVANCES TO CUSTOMERS (Continued) (e) Overdue loans analysed by overdue period (excluding interests accrued) (Continued) 31 December 2023 Overdue Overdue Overdue more than more than within three three months one year to Overdue months to one year three years more than (inclusive) (inclusive) (inclusive) three years Total Unsecured loans 2,793,094 2,443,061 1,097,366 290,053 6,623,574 Guaranteed loans 4,267,500 1,047,927 2,511,038 683,995 8,510,460 Collateralised loans 4,210,238 1,866,499 3,876,410 930,793 10,883,940 Pledged loans 1,786,568 97,639 265,731 719,410 2,869,348 Total 13,057,400 5,455,126 7,750,545 2,624,251 28,887,322 As a percentage of gross loans and advances to customers 140% 059% 083% 028% 310% Overdue loans represent loans of which the whole or part of the principal or interest were overdue for one day or more CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 189 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 22 LOANS AND ADVANCES TO CUSTOMERS (Continued) (f) Movements in allowance for impairment losses (Continued) (ii) Movements in allowance for impairment of loans and advances to customers at FVTOCI: Year ended 31 December 2024 Stage 1 Stage 2 Stage 3 Total As at 1 January 18,847 – 1,367,990 1,386,837 Charge/(reversal) for the year 17,608 – (74,227) (56,619) As at 31 December 36,455 – 1,293,763 1,330,218 Year ended 31 December 2023 Stage 1 Stage 2 Stage 3 Total As at 1 January 67,791 – 1,470,341 1,538,132 Transferred: – to Stage 3 (94) – 94 – Reversal for the year (48,850) – (102,445) (151,295) As at 31 December 18,847 – 1,367,990 1,386,837 Carrying amount of loans and advances to customers at FVTOCI is measured at fair value, allowance for impairment losses on loans and advances to customers at FVTOCI is recognised in other comprehensive income without decreasing the carrying amount of loans and advances to customers presented in the consolidated statement of financial position, and charge or reversal of impairment loss is recognised in current period profit or loss CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 191 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 23 FINANCIAL INVESTMENTS (Continued) (a) Financial investments measured at FVTPL (Continued) Other financial investments measured at FVTPL: 31 December 2024 2023 Fund investments – Unlisted 70,852,301 54,704,396 Equity investments – Listed outside Hong Kong 500,699 448,210 – Unlisted 3,588,068 3,573,305 Trust plans and asset management plans – Unlisted 87,564,673 75,696,019 Total other financial investments measured at FVTPL 162,505,741 134,421,930 Total financial investments measured at FVTPL 192,864,991 161,057,566 Note: (i) As at 31 December 2024 and 2023, certain financial investments measured at FVTPL were pledged for borrowings from the central bank and financial assets sold under repurchase agreements (Note 52 (e)) CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 193 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 23 FINANCIAL INVESTMENTS (Continued) (b) Financial investments measured at FVTOCI (Continued) Movements in allowance for impairment losses of Financial investments measured at FVTOCI are as follows: Year ended 31 December 2024 Stage 1 Stage 2 Stage 3 Total As at 1 January 148,805 – 10,000 158,805 Charge for the year 199,248 – – 199,248 Exchange rate changes and others 54 – – 54 As at 31 December 348,107 – 10,000 358,107 Year ended 31 December 2023 Stage 1 Stage 2 Stage 3 Total As at 1 January 122,651 – 10,000 132,651 Charge for the year 26,166 – – 26,166 Exchange rate changes and others (12) – – (12) As at 31 December 148,805 – 10,000 158,805 Carrying amount of financial investments measured at FVTOCI is measured at fair value, allowance for impairment on financial investments measured at FVTOCI is recognised in other comprehensive income without decreasing the carrying amount of financial investments presented in the consolidated statement of financial position, and charge or reversal of impairment loss is recognised in current period profit or loss CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 195 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 23 FINANCIAL INVESTMENTS (Continued) (c) Financial investments measured at amortised cost (Continued) Movements in allowances for impairment losses of financial investments measured at amortised cost are as follows: Year ended 31 December 2024 Stage 1 Stage 2 Stage 3 Total As at 1 January 772,484 727,652 7,216,463 8,716,599 Transferred: – to Stage 1 – – – – – to Stage 2 – – – – – to Stage 3 (65,185) (86,499) 151,684 – Charge/(reversal) for the year 705,257 (31,210) (603,671) 70,376 Write-offs/transfer out – – (315,464) (315,464) Exchange rate changes and others (293) – – (293) As at 31 December 1,412,263 609,943 6,449,012 8,471,218 Year ended 31 December 2023 Stage 1 Stage 2 Stage 3 Total As at 1 January 928,829 3,117,392 6,019,605 10,065,826 Transferred: – to Stage 1 50,710 – (50,710) – – to Stage 2 (145,282) 145,282 – – – to Stage 3 – (2,403,561) 2,403,561 – (Reversal of)/charge for the year (68,620) (131,461) 317,743 117,662 Write-offs/transfer out – – (1,473,736) (1,473,736) Exchange rate changes and others 6,847 – – 6,847 As at 31 December 772,484 727,652 7,216,463 8,716,599 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 197 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 26 PROPERTY AND EQUIPMENT Leasehold Operating Motor Construction Premises improvements equipment vehicles in progress Total Cost As at 1 January 2023 3,875,984 1,054,345 1,955,266 87,087 562,760 7,535,442 Additions and transfer in – 186,143 235,169 1,622 6,033 428,967 Disposals and transfer out – (15,105) (121,174) (1,637) – (137,916) Foreign currency translation differences – 301 451 15 – 767 As at 31 December 2023 3,875,984 1,225,684 2,069,712 87,087 568,793 7,827,260 As at 1 January 2024 3,875,984 1,225,684 2,069,712 87,087 568,793 7,827,260 Additions and transfer in 199,089 82,644 234,627 3,404 32,224 551,988 Disposals and transfer out – (16,380) (73,297) (10,271) (231,761) (331,709) Foreign currency translation differences – 240 367 12 – 619 As at 31 December 2024 4,075,073 1,292,188 2,231,409 80,232 369,256 8,048,158 Accumulated depreciation As at 1 January 2023 (1,541,880) (830,957) (1,351,932) (70,206) – (3,794,975) Charged for the year (185,892) (154,919) (234,005) (4,695) – (579,511) Eliminated on disposals – 15,071 118,377 1,082 – 134,530 Foreign currency translation differences – (301) (316) (14) – (631) As at 31 December 2023 (1,727,772) (971,106) (1,467,876) (73,833) – (4,240,587) As at 1 January 2024 (1,727,772) (971,106) (1,467,876) (73,833) – (4,240,587) Charged for the year (191,796) (165,055) (224,710) (3,717) – (585,278) Eliminated on disposals – 16,038 68,790 8,984 – 93,812 Foreign currency translation differences – (240) (305) (11) – (556) As at 31 December 2024 (1,919,568) (1,120,363) (1,624,101) (68,577) – (4,732,609) Allowance for impairment As at 1 January 2023 – – – – – – Charged for the year – – – – – – As at 31 December 2023 – – – – – – As at 1 January 2024 – – – – – – Charged for the year – – – – (98,005) (98,005) As at 31 December 2024 – – – – (98,005) (98,005) Net book value As at 31 December 2023 2,148,212 254,578 601,836 13,254 568,793 3,586,673 As at 31 December 2024 2,155,505 171,825 607,308 11,655 271,251 3,217,544 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 199 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 27 DEFERRED TAX ASSETS (Continued) (b) Movements in deferred tax Net losses/ Allowances (gains) from Net balance for impairment changes in of deferred losses fair value Others tax assets As at 1 January 2023 10,766,639 972,323 1,366,249 13,105,211 Recognised in profit or loss 1,805,945 (113,446) 67,806 1,760,305 Recognised in other comprehensive income 31,553 (138,018) – (106,465) 31 December 2023 12,604,137 720,859 1,434,055 14,759,051 Recognised in profit or loss (923,765) (754,743) 794,123 (884,385) Recognised in other comprehensive income (34,702) (1,477,042) – (1,511,744) 31 December 2024 11,645,670 (1,510,926) 2,228,178 12,362,922 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 201 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 29 OTHER ASSETS 31 December Notes 2024 2023 Settlement receivable 6,263,025 4,656,690 Interest receivable (a) 2,840,447 3,327,508 Guarantee deposits 710,345 951,635 Land use rights 370,536 385,261 Fees receivable 395,529 321,011 Prepayments 200,454 194,162 Intangible assets 287,596 291,186 Precious metals 359,345 – Others 2,957,129 2,776,355 Sub-total 14,384,406 12,903,808 Less: Allowances for impairment losses (b) (961,481) (804,119) Total 13,422,925 12,099,689 (a) Interest receivable 31 December 2024 2023 Interest receivable arising from: Loans and advances to customers 1,075,461 953,664 Financial investments 1,764,986 2,373,844 Total 2,840,447 3,327,508 As at 31 December 2024 and 2023, interest receivable only includes interest that has been due for the relevant financial instruments but not yet received Interest on financial instruments based on the effective interest method has been reflected in the gross carrying amount of corresponding financial instruments (b) Movements in allowance for impairment losses of other assets are as follows: 2024 2023 As at 1 January 804,119 73,646 Charge for the year 2,456,843 2,318,893 Write-offs and transfer out (2,299,481) (1,588,420) As at 31 December 961,481 804,119 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 203 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 32 PLACEMENTS FROM BANKS AND OTHER FINANCIAL INSTITUTIONS Analysed by type and location of counterparty: 31 December 2024 2023 Placements in Chinese mainland – Banks 12,441,557 18,790,215 Sub-total 12,441,557 18,790,215 Placements outside Chinese mainland – Banks 10,409,008 15,515,078 Sub-total 10,409,008 15,515,078 Interests accrued 294,180 614,719 Total 23,144,745 34,920,012 33 Financial liabilities at FVTPL 31 December 2024 2023 Financial liabilities at FVTPL – Structured notes 171,916 – Total 171,916 – The Group has designated the issued structured notes as financial liabilities at FVTPL As at 31 December 2024, the amount of change in fair value of FVTPL due to changes in credit risk was not significant CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 205 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 35 DEPOSITS FROM CUSTOMERS 31 December 2024 2023 Demand deposits – Corporate customers 238,497,466 219,169,451 – Individual customers 36,293,255 33,061,936 Sub-total 274,790,721 252,231,387 Time deposits – Corporate customers 416,936,133 346,997,589 – Individual customers 175,982,215 167,940,207 Sub-total 592,918,348 514,937,796 Pledged deposits – Acceptances 89,373,241 80,707,395 – Letters of credit and guarantees 60,270,878 32,807,576 – Letters of guarantees 2,532,115 2,343,512 – Others 23,838,062 31,914,101 Sub-total 176,014,296 147,772,584 Fiscal deposits 159,715 174,755 Inward and outward remittances 2,205,715 45,456 Interests accrued 21,473,000 19,431,901 Total 1,067,561,795 934,593,879 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 207 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 36 DEBT SECURITIES ISSUED (Continued) Notes: (Continued) (b) Financial bonds issued (Continued) (iv) On 1 December 2022, the Group issued three-year financial bonds with nominal value of RMB15,000 million The coupon interest rate per annum was 295% As at 31 December 2024, the balance of the financial bonds issued above was RMB14,997 million (v) On 22 February 2022, the Group issued three-year financial bonds with nominal value of RMB10,000 million The coupon interest rate per annum was 295% As at 31 December 2024, the balance of the financial bonds issued above was RMB9,999 million (vi) On 6 April 2021, the Group issued three-year financial bonds with nominal value of RMB15,000 million The coupon interest rate per annum was 355% The above issued financial bonds were fully redeemed on 8 April 2024 (vii) On 26 April 2021, the Group issued three-year financial bonds with nominal value of RMB10,000 million The coupon interest rate per annum was 353% The above issued financial bonds were fully redeemed on 28 April 2024 (c) Tier 2 capital bonds issued (i) On 18 April 2024, the Group issued ten-year fixed interest rate tier 2 capital bonds with nominal value of RMB14,000 million The coupon interest rate per annum was 277% According to the issuance terms, the Group has an option to redeem all the bonds at face value on the last day of the fifth year As at 31 December 2024, the balance of the financial bonds issued above was RMB13,994 million (ii) On 15 January 2021, the Group issued ten-year fixed interest rate tier 2 capital bonds with nominal value of RMB9,000 million The coupon interest rate per annum was 440% According to the issuance terms, the Group has an option to redeem all the bonds at face value on the last day of the fifth year As at 31 December 2024, the balance of the financial bonds issued above was RMB8,993 million (d) Certificates of deposit issued For the year ended 31 December 2024, the Group issued a number of certificates of deposit with total face value of RMB3,603 million and duration between 1 to 12 months The effective interest rates ranged from 220% to 559% per annum As at 31 December 2024, the balance of the above certificates of deposit issued but not yet due was RMB3,568 million (31 December 2023: RMB2,535 million) As at 31 December 2024 and 2023, there were no defaults of principal and interest or other breaches with respect to these bonds None of the above bonds were secured CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 209 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 38 OTHER LIABILITIES (Continued) (a) Accrued staff costs 31 December 2024 2023 Salaries, bonuses and allowances payable 4,652,508 4,366,142 Pension and annuity payable 18,872 18,325 Other social insurances payable 6,764 6,718 Housing funds payable 5,857 5,883 Others 394,973 403,768 Total 5,078,974 4,800,836 (b) Provisions 31 December 2024 2023 Provision for credit commitment losses 466,961 336,027 Expected litigation losses 42,244 42,244 Others 480 887 Total 509,685 379,158 Movements in provisions for credit commitment losses are as follows: 31 December 2024 Stage 1 Stage 2 Stage 3 Total As at 1 January 2024 333,398 851 1,778 336,027 Charge/(reversal) for the year 130,909 (143) 19 130,785 Exchange rate changes and others 149 – – 149 As at 31 December 2024 464,456 708 1,797 466,961 31 December 2023 Stage 1 Stage 2 Stage 3 Total As at 1 January 2023 433,343 759 707 434,809 (Reversal)/charge for the year (101,735) 92 1,071 (100,572) Exchange rate changes and others 1,790 – – 1,790 As at 31 December 2023 333,398 851 1,778 336,027 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 211 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 40 OTHER EQUITY INSTRUMENTS (Continued) Undated capital bonds (Continued) (b) Main clauses (i) Issue size The issue size of the Bonds for the period is RMB11 billion (ii) Term of the Bonds The Bonds for the period will continue to be outstanding so long as the Issuer’s business continues to operate (iii) Coupon rate The coupon rate of the Bonds will be adjusted at defined intervals, with a coupon rate adjustment period every 5 years since the payment settlement date In any coupon rate adjusted period, the interest payments on the Bonds will be paid at a prescribed fixed coupon rate The coupon rate of the Bonds for the period includes a benchmark rate plus a fixed spread The benchmark rate is the arithmetic average of the yields to maturity of 5 trading days prior to the Announcement Date of the Subscription Agreement, as indicated by the yield to maturity curve of applicable 5-year China government Notes (rounded to 001%) published on wwwChinaBondcomcn (or other websites approved by the China Central Depository & Clearing Co, Ltd) The fixed spread is the difference between the coupon rate and the benchmark rate as determined at the time of issuance The fixed spread will not be adjusted once determined The Bonds will not have any elevation in interest rates nor any other incentive to redeem (iv) Conditional redemption rights of the issuer The Bonds issuance sets conditional redemption rights for the issuer From the fifth anniversary since the issuance of the Bonds, the issuer may redeem the Bonds in whole or in part on each interest payment date (including the fifth interest payment date since the issuance) If, after the issuance, the Bonds no longer qualify as Additional Tier 1 Capital as a result of an unforeseeable change or amendment to relevant provisions of supervisory regulations, the issuer may redeem all but not part of the Bonds (v) Subordination The claims in respect of the Bonds, in the event of the liquidation of the issuer, will be subordinated to claims of depositors, general creditors, and subordinated indebtedness that rank senior to the Bonds; shall rank in priority to all classes of shares held by the issuer’s shareholders and rank pari passu with the claims in respect of any other Additional Tier 1 Capital instruments of the issuer that rank pari passu with the Bonds CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 213 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 41 RESERVES (a) Capital reserve 31 December 2024 2023 Share premium 10,689,841 10,732,077 (b) Surplus reserve Pursuant to the Company Law of the PRC and the Articles, the Group is required to appropriate 10% of its net profit in accordance with the Accounting Standards for Business Enterprises and other relevant regulations to the statutory surplus reserve until the balance reaches 50% of its registered capital (c) General reserve Pursuant to the Administrative Measures for the Provision of Reserves of Financial Enterprises (Cai Jin [2012] No 20) issued by the Ministry of Finance, the Bank is required to set aside a general reserve through profit appropriation which should not be lower than 15% of the ending balance of its gross risk-bearing assets on an annual basis Pursuant to the Interim Measures for the Supervision and Administration of the Risk Reserves of Publicly Offered Securities Investment Funds, the Bank is required to set aside a risk reserve for custody services of publicly offered securities investment funds on an annual basis from its net profit as profit distribution, at a rate of 25% of the total custody income generated from publicly offered securities investment funds during the year The Bank’s subsidiary accrues risk reserves in accordance with the Measures for the Administration of Wealth Management Subsidiary Companies of Commercial Banks until the balance of risk reserve reaches 1% of the balance of wealth management products CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 215 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 42 APPROPRIATION OF PROFITS Dividend on ordinary shares In accordance with the resolution at the Bank’s Annual General Meeting on 28 June 2024, the Bank paid no dividend on ordinary shares for 2023 In accordance with the resolution at the Bank’s Annual General Meeting on 18 May 2023, the Bank paid no dividend on ordinary shares for 2022 Interests on undated capital bonds The Bank declared and distributed the interest on the undated capital bonds for year 2023 amounting to RMB950 million on 16 September 2024 The Bank declared and distributed the interest on the undated capital bonds for year 2022 amounting to RMB950 million on 16 September 2023 43 INTERESTS IN STRUCTURED ENTITIES THAT ARE NOT INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS (a) The Group’s interests in structured entities sponsored by third party institutions: The Group holds interests in certain structured entities sponsored by third party institutions through investments in the units issued by these structured entities Such structured entities include trust plans and asset management plans issued by securities company or trust company and investment funds The nature and purpose of these structured entities are to generate fees from managing assets on behalf of third-party investors These vehicles are financed through the issue of units to investors The following tables set out an analysis of the carrying amounts of interests held by the Group in structured entities that are not included in consolidated financial statements, as well as an analysis of the line items relevant to assets and liabilities in the Group’s financial statements as at 31 December 2024 and 2023: 31 December 2024 Financial Financial Financial investments Total investments investments measured at carrying Maximum at FVTPL at FVTOCI amortised cost amount exposure Trust plans and asset management plans 87,042,916 – 103,603,204 190,646,120 190,646,120 Funds 70,852,301 – – 70,852,301 70,852,301 Total 157,895,217 – 103,603,204 261,498,421 261,498,421 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 217 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 44 TRANSFER OF FINANCIAL ASSETS In the ordinary course of business, the Group enters into certain transactions that result in the transfer of recognised financial assets to third parties or special-purpose entities, and the related financial assets are derecognised if the conditions for derecognition are met When the Group retains substantially all the risks and rewards of the transferred assets, the transfer of related financial assets does not meet the conditions for derecognition and the Group continues to recognise the said assets The Group enters into transactions in the normal course of business by which it sells financial assets to special purpose trust and issues trust shares to investors through the special purpose trusts The Group assessed among other factors, whether or not to derecognise the transferred assets by evaluating the extent to which it retains the risks and rewards of the assets and whether it has relinquished control over these assets For the year ended 31 December 2024, the Group transferred credit assets with gross principal amount of RMB29,967 million to independent third party, and the transfer price was RMB25,024 million These assets were all fully derecognised For the year ended 31 December 2023, the Group did not transfer any financial assets 45 CAPITAL MANAGEMENT The Group implements a comprehensive capital management framework, covering the management of the regulated capital, economic capital and book capital, particularly the capital compliance management, capital planning, allocation and evaluation In setting its capital adequacy objective, the Group considers regulatory requirements, external rating objective and its own risk appetite, so as to protect the interest of its customers and creditors, maximise the value of shareholders and meet all regulatory requirements on capital management Since 1 January 2024, the Group measures capital adequacy ratios in accordance with related regulatory requirements in the Administrative Measures for the Capital of Commercial Banks issued by the NFRA In calculating its capital adequacy ratios, the Group considers all its domestic and overseas branches and sub-branches and financial institution subsidiary (excluding insurance companies) The Group uses the weighting method to measure credit risk weighted assets, in which on-balance sheet business determines risk weights based on asset type, counterparty, collateral status and other relevant risk elements, considering the impact of qualified risk mitigation; and off-balance sheet business calculates risk-weighted assets using the same methodology as that used for on-balance sheet business, adjusted for contingent loss characteristics Counterparty credit risk for over-the-counter derivatives is calculated using the current exposure method; market risk is measured using the simplified standard method; and operational risk is measured using the standard method The NFRA requires commercial banks to meet the requirements for capital indicators at all levels in the Administrative Measures for the Capital of Commercial Banks For non-systemically important banks, the minimum ratios for core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio are 750%, 850% and 1050%, respectively During the report disclosure period, the Group has complied in full with the capital requirements stipulated by the regulatory authorities CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 219 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 46 NOTES TO THE STATEMENT OF CASH FLOWS (a) Net change in cash and cash equivalents 31 December 2024 2023 Cash and cash equivalents as at 31 December 122,169,996 67,382,604 Less: Cash and cash equivalents as at 1 January 67,382,604 63,085,206 Net increase in cash and cash equivalents 54,787,392 4,297,398 (b) Cash and cash equivalents 31 December 2024 2023 Cash on hand 470,357 362,503 Deposits with the central bank other than restricted deposits 90,955,021 39,725,030 Deposits with banks and other financial institutions (Original maturity within 3 months) 11,429,811 20,760,063 Placements with banks and other financial institutions (Original maturity within 3 months) 786,193 – Financial assets purchased under resale agreements (Original maturity within 3 months) 18,528,614 6,535,008 Total 122,169,996 67,382,604 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 221 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 47 RELATED PARTIES (Continued) Related party transactions (a) Pricing policy Transactions between the Group and related parties are conducted in the normal course of its business and under normal commercial terms The pricing policies are no more favourable than those offered to independent third parties (b) Transactions with related parties other than key management personnel (i) Transactions with major shareholders: Years ended 31 December 2024 2023 Transactions during the year Interest income 176,742 220,692 Fee and commission income – 1,799 Interest expenses 33 72 Operating expenses 26,325 26,033 31 December 2024 2023 Balances at the end of the year Deposits with banks and other financial institutions 407,747 217,406 Loans and advances to customers 3,375,563 3,416,489 Deposits from customers 3,296 51,371 Lease liabilities 13,412 35,271 (ii) Transactions with subsidiary: Years ended 31 December 2024 2023 Transactions during the year Interest expenses 2,720 29,315 Fee and commission expenses 10 269,137 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 223 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 47 RELATED PARTIES (Continued) Related party transactions (Continued) (b) Transactions with related parties other than key management personnel (Continued) (iv) Transactions with other related parties: (Continued) 31 December 2024 2023 Balances at the end of the year Deposits with banks and other financial institutions 1,651,019 7,263,694 Derivative financial assets 315 398 Loans and advances to customers 14,634,479 15,608,271 Financial investments 2,484,743 2,798,470 Deposits from banks and other financial institutions 4,662,406 7,705,275 Derivative financial liabilities 325 2,577 Deposits from customers 7,757,546 5,348,933 Debt securities issued – 1,002,823 Lease liabilities 34,427 178,583 Off-balance sheet item Derivative financial instruments-notional principal 280,000 440,000 Bank acceptances 1,140,276 430,848 Letters of guarantees 24,389 48,211 Letters of credit 498,055 952,761 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 225 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 48 SEGMENT REPORTING (a) Operating segment The Group manages its business by business lines Consistent with the way in which information is reported internally to the Group’s most senior executive management for the purposes of resource allocation and performance assessment, the Group defines reporting segments based on the following operating segments: Corporate banking This segment represents the provision of a range of financial products and services to corporations, government agencies and financial institutions These products and services include corporate loans and advances, trade financing, deposit taking activities, agency services, wealth management services, consulting and advisory services, remittance and settlement services and guarantee services Retail banking This segment represents the provision of a range of financial products and services to retail customers These products and services include personal loans, deposit taking activities, personal wealth management services and remittance services Financial market business This segment covers the Group’s financial market business The financial markets business enters into inter- bank money market transactions, repurchases transactions, interbank investments, and bond investments and trading The financial market business segment also covers management of the Group’s overall liquidity position, including the issuance of debts Others These represent assets, liabilities, income and expenses which cannot directly attributable or cannot be allocated to a segment on a reasonable basis Measurement of segment assets and liabilities and of segment income, expenses and results is based on the Group’s accounting policies Internal charges and transfer prices are determined with reference to market rates and have been reflected in the performance of each segment Interest income and expense earned from third parties are referred to as “external net interest income/expense” Net interest income and expense arising from internal charges and transfer pricing adjustments are referred to as “internal net interest income/expense” Segment income, expenses, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis Intra-group balances and intra-group transactions are eliminated by segment income, expenses, assets and liabilities as part of the consolidation process Segment capital expenditure is the total cost incurred during 2024 and 2023 to acquire property and equipment, intangible assets and other long-term assets CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 227 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 48 SEGMENT REPORTING (Continued) (a) Operating segment (Continued) Others (Continued) Year ended 31 December 2023 Financial Corporate Retail market banking banking business Others Total Operating income External net interest income/(expenses) 8,410,951 12,012,098 (2,777,060) – 17,645,989 Internal net interest income/(expenses) 2,498,302 (3,256,462) 758,160 – – Net interest income/(expenses) 10,909,253 8,755,636 (2,018,900) – 17,645,989 Net fee and commission income/(expenses) 2,064,665 (399,752) 2,332,005 2,003 3,998,921 Net trading gains/(losses) 771,360 25,648 (294,982) – 502,026 Net gains from financial investments 100,750 708 2,627,040 34,800 2,763,298 Other operating income 23,702 1,725 60 61,649 87,136 Operating income 13,869,730 8,383,965 2,645,223 98,452 24,997,370 Operating expenses (4,967,692) (4,727,175) (827,634) (190,645) (10,713,146) Impairment losses on assets (4,445,067) (3,184,387) (1,491,693) – (9,121,147) Profit/(loss) before taxation 4,456,971 472,403 325,896 (92,193) 5,163,077 Other segment information – Depreciation and amortisation 798,289 828,905 96,899 16,801 1,740,894 – Capital expenditure 226,400 250,991 26,222 74,542 578,155 31 December 2023 Financial Corporate Retail market banking banking business Others Total Segment assets 884,361,628 295,048,477 510,797,411 27,767,269 1,717,974,785 Deferred tax assets 14,759,051 Total assets 1,732,733,836 Segment liabilities 804,533,067 212,658,624 592,651,573 8,487,871 1,618,331,135 Total liabilities 1,618,331,135 Credit commitments 310,045,628 17,788,260 – – 327,833,888 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 229 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 48 SEGMENT REPORTING (Continued) (b) Geographical segment (Continued) Year ended 31 December 2023 Northern and Northeastern Central and China Eastern China Southern China Western China Elimination Total Operating income External net interest income 8,474,187 3,544,519 3,678,062 1,949,221 – 17,645,989 Internal net interest (expenses)/income (69,001) 299,422 411,404 (641,825) – – Net interest income 8,405,186 3,843,941 4,089,466 1,307,396 – 17,645,989 Net fee and commission income 2,774,230 538,427 506,671 179,593 – 3,998,921 Net trading gains 211,898 193,983 78,268 17,877 – 502,026 Net gains from financial investments 2,762,974 178 146 – – 2,763,298 Other operating income 32,416 15,905 33,681 5,134 – 87,136 Operating income 14,186,704 4,592,434 4,708,232 1,510,000 – 24,997,370 Operating expenses (6,056,609) (2,074,238) (1,916,399) (665,900) – (10,713,146) Impairment losses on assets (6,425,479) (611,030) (1,629,952) (454,686) – (9,121,147) Profit before taxation 1,704,616 1,907,166 1,161,881 389,414 – 5,163,077 Other segment information – Depreciation and amortisation 826,351 385,245 394,706 134,592 – 1,740,894 – Capital expenditure 399,476 84,587 63,617 30,475 – 578,155 31 December 2023 Northern and Northeastern Central and China Eastern China Southern China Western China Elimination Total Segment assets 1,313,871,106 290,301,112 274,845,198 84,126,869 (245,169,500) 1,717,974,785 Deferred tax assets 14,759,051 Total assets 1,732,733,836 Segment liabilities 1,217,467,599 288,394,303 273,901,166 83,737,567 (245,169,500) 1,618,331,135 Total liabilities 1,618,331,135 Credit commitments 111,697,094 95,095,249 95,704,992 25,336,553 – 327,833,888 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 231 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (a) Credit risk (Continued) (I) Measurement of credit risk Loans and advances to customers and off-balance sheet credit commitments The Group’s Risk Management Department, Credit Approval Department, Asset Monitoring Department and Asset Resolution Department are jointly responsible for the credit risk management of various types of credit business and financial investments For wholesale credit business, the Group measures the default risk and loss given default of customers in accordance with the risk measurement requirements of the internal rating method, and continuously improves them through continuous data monitoring, objective validation and performance evaluation, enriches the practical application of risk measurement results in the credit risk management system, and actively explores the construction of the Group’s internal rating system For the retail credit business, the Group, taking into account its own business characteristics and customer structure, rationally applies financial technology to continuously improve its credit scoring model and data mining and risk analysis of customers’ historical behavioural performance, so as to progressively enhance the effectiveness of credit access, inventory asset management, asset classification and impairment calculation Deposits and placements with banks and other financial institutions and financial assets purchased under resale agreements The Group adopts a centralised underwriting process in relation to approving credit limits for financial institution counterparties engaged in interbank placements, investment securities and securities under repurchase and resale agreements The Group assesses the credit risk of these counterparties adopting a quantitative and qualitative approach which collectively involves the assessment and review of their credit rating in the banking industry, customer base and profiles, management capabilities, business prospects, industry position, external environment, regulatory indicators and cooperation with the Group and financial standing and performance, etc CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 233 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (a) Credit risk (Continued) (III) Credit risk mitigation measures Collaterals and pledges The credit policies of the Group provide specific requirements on the acceptable collaterals and pledges, and set different rates for different collaterals and pledges based on their nature and extent of realisation The Group sets out specific requirements for the qualifications of professional evaluation agencies In addition, through credit risk management system, the Group implements strict management on the collaterals and pledges and their ownership certificates to prevent the occurrence of operational risks The acceptable collaterals and pledges include financial collateral, real estate properties, accounts receivable and other collateral, mainly consisting of cash and cash equivalents, stock, state-owned construction land use right, residential real estate, commercial real estate and accounts receivable If the decrease in value or quantity of collateral makes it insufficient for the actual value of the collateral to meet collateral (pledge) rate, the Group shall freeze the underlying credit program amounts, require the client to provide additional collateral or security deposit or return the corresponding credit lines Master netting arrangements The Group and its counterparties enter into master netting arrangements for derivatives transactions to further reduce credit risk Master netting arrangements may not lead to the offsetting between assets and liabilities on the statement of financial position, because the transactions are usually settled on a gross basis However, the credit risk associated with favourable contracts is reduced by a master netting arrangement to the extent that if a default occurs, all amounts are terminated and settled on a net basis The financial derivatives are mainly settled in accordance with the provisions of the International Swaps and Derivatives Association and the features of the products, using, in principle, the method that involves the lowest settlement risk CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 235 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (a) Credit risk (Continued) (III) Credit risk mitigation measures (Continued) Impairment and provisioning policies (Continued) (3) Definition of “default” and “credit-impaired assets” When a financial asset is impaired, the Group identifies the financial asset as a default Generally speaking, if the financial asset is overdue for more than 90 days, it is considered as a default At each date of the statement of financial position, the Group assesses whether financial assets carried at amortised cost and debt instruments at FVTOCI are credit-impaired A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred Evidence that a financial asset is credit- impaired includes the following observable data: – significant financial difficulty of the borrower or issuer; – a breach of contract, such as a default or delinquency in interest or principal payments; – for economic or contractual reasons relating to the borrower’s financial difficulty, the Group having granted to the borrower a concession that would not otherwise consider; – it is becoming probable that the borrower will enter into bankruptcy or other financial reorganisation; – the disappearance of an active market for that financial asset because of financial difficulties; – purchase or source a financial asset at significant discount, which reflects that the financial asset is credit-impaired; or – overdue more than 90 days The above criteria apply to all financial assets of the Group and they are consistent with the definition of “default” adopted by the internal management of credit risk CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 237 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (a) Credit risk (Continued) (III) Credit risk mitigation measures (Continued) Impairment and provisioning policies (Continued) (4) Measurement of ECLs (Continued) The Group determines the 12-month loss given default (LGD) and lifetime LGD based on the factors that affects post-default recovery LGD for different product types are different As to financial assets classified as guarantees, the Group determines the loss given default (LGD) according to the types of collaterals and their expected value, the discount rate at the compulsory sale, the recovery time and the estimated recovery cost As to credit-based financial assets, the Group usually determines loss given default (LGD) at the product level due to the limited differences in recoverable amounts from different borrowers Forward-looking economic information should be considered when determining the 12-month and lifetime probability of default, EAD and loss given default The Group quarterly monitors and reviews assumptions related to the calculation of ECLs, including the changes in PD and the value of collaterals under the different time limits Forward-looking information included in the ECL model is as follows: The calculation of ECLs involves forward-looking information After the historical analysis, the Group identified the key economic indicators related to ECL, such as gross domestic product (GDP), consumer price index (CPI), Broad money supply (M2), and Industrial Added Value The Group carried out regression analysis to determine the relationship between these economic indicators and PD as well as LGD, so as to ascertain the impact of historical changes in these indicators on PD and LGD The Group forecasts these economic indicators at least annually and provides the best estimates of the economic conditions for the coming year The important macroeconomic assumptions used by the Group in various macroeconomic scenarios include broad money supply, consumer price index, gross domestic product, export amount, Industrial Added Value, price index of second-hand housing in 70 large and medium- sized cities, and Gross Consumption of Social Retail Goods (GCSRG) The Group established measurement models to identify the three risk weights, ie optimistic, neutral and pessimistic As of 31 December 2024, the Group’s optimistic scenario weight is 20%, neutral scenario weight is 60%, and pessimistic scenario weight is 20%, both of which are consistent with 2023 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 239 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (a) Credit risk (Continued) (ii) Financial assets (excluding interests accrued) analysed by credit quality 31 December 2024 Gross carrying amount Allowances for ECLs Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Financial assets measured at amortised cost Deposits with the central bank 147,663,155 – – 147,663,155 – – – – Deposits with banks and other financial institutions 11,429,811 – – 11,429,811 (31,088) – – (31,088) Placements with banks and other financial institutions 4,631,331 – 200,000 4,831,331 (8,486) – (60,000) (68,486) Financial assets purchased under resale agreements 18,528,614 – – 18,528,614 (2,543) – – (2,543) Loans and advances to customers 773,198,893 45,308,985 18,414,483 836,922,361 (6,080,413) (5,156,951) (13,006,758) (24,244,122) Financial investments 293,505,980 7,093,538 33,627,996 334,227,514 (1,412,263) (609,943) (6,449,012) (8,471,218) Other assets 3,945,472 1,071,141 1,860,749 6,877,362 (265,080) (109,874) (584,384) (959,338) Total 1,252,903,256 53,473,664 54,103,228 1,360,480,148 (7,799,873) (5,876,768) (20,100,154) (33,776,795) Financial assets at FVTOCI Loans and advances to customers 62,687,359 – – 62,687,359 (36,455) – (1,293,763) (1,330,218) Financial investments 175,536,412 – – 175,536,412 (348,107) – (10,000) (358,107) Total 238,223,771 – – 238,223,771 (384,562) – (1,303,763) (1,688,325) Credit commitments 402,239,294 19,303 3,594 402,262,191 (464,456) (708) (1,797) (466,961) CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 241 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (a) Credit risk (Continued) (iii) Restructured loans and advances to customers Restructured loans refer to those loans that relevant borrowers are not capable of repaying due to financial difficulties and therefore certain clauses on the loan contract are adjusted as stipulated in the Measures for the Risk Classification of Financial Assets of Commercial Bank As at 31 December 2024 and 2023, the Group’s restructured loans amounted to RMB1,621 million and RMB960 million (iv) Credit rating The Group adopts a credit rating approach in managing the credit risk of the debt securities portfolio Debt securities are rated with reference to major rating agencies where the issuers of the securities are located The carrying amounts of debt securities investments (excluding interests accrued) analysed by the rating agency designations as at 31 December 2024 and 2023 are as follows: 31 December 2024 2023 Neither overdue nor impaired Ratings – AAA 334,641,811 337,282,252 – AA- to AA+ 94,734,342 42,978,556 Sub-total 429,376,153 380,260,808 Unrated 450,545 9,777,988 Total 429,826,698 390,038,796 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 243 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (b) Market risk (including the interest rate risk in the banking book) (Continued) Trading book market risk (Continued) Stress testing Stress testing is used to assess the loss sustainability under extremely adverse conditions when significant market changes take place, including the extreme fluctuations of market risk elements, such as interest rates and exchange rates, unexpected political or economic events, or a combination of the above situations The market risk of the Group goes through stress testing on a regular basis Assessment of fair value Assessment of the fair value of financial instruments is based on the quantitative analysis of the financial products that takes into consideration the specific characteristics of the financial products, market situation of trading strategy, risk factors and the quality and qualification of counterparties The Group assesses the fair value of its financial instruments on a regular basis Interest rate risk of banking book Interest rate risk of the banking book is measured and managed mainly through gap management, sensitivity analysis and duration analysis to ensure the interest rate risk of the banking book are controlled within the scope set by the risk appetite The Group calculates the interest rate sensitivity gap based on repricing cash flow of the interest-earning assets and interest-bearing liabilities, and conducts scenario analysis, to assess the impact on the Group of changes in interest rates The impact on the market value of assets or liabilities of one basis point movement in interest rate was assessed through calculation of Basis Point Value Interest rate risk of the Group’s banking book goes through stress testing on a regular basis In such stress testing, basic interest rate and market rate is treated as a prime factor, and other factors such as political and economic contingency or several contingencies happened at the same time are included Interest rate risk The Group operates its business predominantly in Chinese mainland under the interest rate scheme regulated by PBOC The Group manages its interest rate risks through gap analysis, duration analysis and sensitivity analysis of its assets and liabilities The Group has set limits to the rate gap, duration and interest rate sensitivity, and monitors regularly to ensure that the exposures are within the Group’s limit CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 245 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (b) Market risk (including the interest rate risk in the banking book) (Continued) Interest rate risk (Continued) (i) (Continued) 31 December 2023 Non- interest- Within Three months One year to More than Total bearing three months to one year five years five years Assets Cash and deposits with the central bank 103,494,179 395,350 103,098,829 – – – Deposits with banks and other financial institutions 20,938,491 5,372 20,933,119 – – – Placements with banks and other financial institutions 12,353,608 236,648 6,482,333 5,634,627 – – Derivative financial assets 1,551,181 1,551,181 – – – – Financial assets purchased under resale agreements 6,532,553 1,337 6,531,216 – – – Loans and advances to customers (Note (i)) 920,394,849 12,350,216 435,271,170 332,900,018 126,735,034 13,138,411 Financial investments (Note (ii)) 633,136,792 47,268,063 152,655,270 86,187,696 288,718,119 58,307,644 Others 34,332,183 34,332,183 – – – – Total assets 1,732,733,836 96,140,350 724,971,937 424,722,341 415,453,153 71,446,055 Liabilities Borrowings from the central bank 133,787,964 1,769,964 50,662,000 81,356,000 – – Deposits from banks and other financial Institutions 158,762,222 1,184,275 79,878,884 77,699,063 – – Placements from banks and other financial institutions 34,920,012 614,719 11,308,915 21,981,879 1,014,499 – Derivative financial liabilities 990,612 990,612 – – – – Financial assets sold under repurchase agreements 66,634,253 22,725 65,982,834 628,694 – – Deposits from customers 934,593,879 19,477,362 436,835,191 227,027,687 250,587,639 666,000 Debt securities issued 267,923,368 1,594,678 95,572,763 116,784,488 53,971,439 – Others 20,718,825 16,603,237 337,044 728,372 2,316,260 733,912 Total liabilities 1,618,331,135 42,257,572 740,577,631 526,206,183 307,889,837 1,399,912 Asset-liability gap 114,402,701 53,882,778 (15,605,694) (101,483,842) 107,563,316 70,046,143 Notes: (i) As at 31 December 2024 and 2023, for loans and advances to customers, the category “Within three months” includes overdue amounts (net of allowances for impairment losses) of RMB13,626 million and RMB15,904 million, respectively (ii) Financial investments include financial investments measured at FVTPL, financial investments measured at FVTOCI and financial investments measured at amortised cost CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 247 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (b) Market risk (including the interest rate risk in the banking book) (Continued) Foreign exchange risk Foreign exchange risk refers to the risk of losses arising from the negative changes in the rate of exchange The Group conducts the majority of its business in RMB, with certain foreign transactions in United States dollars (“USD”), Hong Kong dollars (“HKD”) and, to a much lesser extent, other currencies The Group’s principle in controlling foreign exchange risk is to match its assets and liabilities by currency and to maintain foreign exchange risk within established limits The Group has set foreign exchange risk limits which are consistent with the guidelines established by the Asset and Liability Management Committee of the Group and are in accordance with relevant regulatory requirements and the management’s assessment of current circumstances The Group also manages its sources and uses of foreign currencies to minimise potential mismatches The Group monitors and controls the foreign exchange risk through the limit management, and mainly uses the foreign exchange exposure analysis, scenario analysis and stress testing to measure and analyse the foreign exchange risk Besides, the Group monitors and controls the foreign exchange risk through the limit management The Asset and Liability Management Department’s market risk team performs independent monitoring, reporting, and management for the entire Group’s foreign exchange risk Meanwhile, the Group managed the on-balance sheet and off-balance sheet foreign exchange risk exposures through derivative financial instruments such as foreign exchange swaps and foreign exchange forwards, and kept the Group’s total exposures of on-balance sheet and off-balance sheet to a low level Therefore, the foreign exchange exposure at the end of the period is not sensitive to exchange rate fluctuations, and the potential impact on the Group’s net profit and shareholders’ equity is not significant The following tables summarise the Group’s exchange risk of assets and liabilities at reporting date Included in the tables are the carrying value of assets and liabilities, and the off-balance sheet credit commitments in RMB equivalent, categorised by the original currency CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 249 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (b) Market risk (including the interest rate risk in the banking book) (Continued) Foreign exchange risk (Continued) 31 December 2023 USD (In RMB Others (In RMB Total (In RMB RMB equivalent) equivalent) equivalent) Assets Cash and deposits with the central bank 100,279,850 1,596,658 1,617,671 103,494,179 Deposits with banks and other financial institutions 10,067,289 9,809,904 1,061,298 20,938,491 Placements with banks and other financial institutions 12,353,608 – – 12,353,608 Derivative financial assets 1,545,023 – 6,158 1,551,181 Financial assets purchased under resale agreements 6,532,553 – – 6,532,553 Loans and advances to customers 868,500,425 45,022,098 6,872,326 920,394,849 Financial investments (Note (i)) 590,805,816 38,445,447 3,885,529 633,136,792 Others 29,284,639 146,819 4,900,725 34,332,183 Total assets 1,619,369,203 95,020,926 18,343,707 1,732,733,836 Liabilities Borrowings from the central bank 133,787,964 – – 133,787,964 Deposits from banks and other financial institutions 154,081,335 3,905,520 775,367 158,762,222 Placements from banks and other financial institutions 3,147,188 24,808,071 6,964,753 34,920,012 Derivative financial liabilities 989,487 – 1,125 990,612 Financial assets sold under repurchase agreements 66,634,253 – – 66,634,253 Deposits from customers 895,002,140 37,196,762 2,394,977 934,593,879 Debt securities issued 264,536,738 3,386,630 – 267,923,368 Others 17,656,513 1,001,747 2,060,565 20,718,825 Total liabilities 1,535,835,618 70,298,730 12,196,787 1,618,331,135 Net position 83,533,585 24,722,196 6,146,920 114,402,701 Off-balance sheet credit commitments 309,997,319 15,168,149 2,668,420 327,833,888 (i) Financial investments include financial investments measured at FVTPL, financial investments measured at FVTOCI and financial investments measured at amortised cost CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 251 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (c) Liquidity risk (Continued) The Group’s overall objective in liquidity risk management is to meet funding obligations across all business lines, ensure compliance with liquidity regulatory index, and minimise additional costs related to liquidity – including opportunity costs of reserve funds, market funding premiums, and asset liquidation losses – through prudent management of asset-liability structure and future cash flows The Group focuses on the adjustment and optimisation of asset structure It has established a three-tier liquidity reserve system based on cash, reserves and highly liquid assets such as interest-rate bonds, monetary funds, and bond funds, which can effectively respond to liquidity risk management needs in day-to-day scenarios and contingencies, and satisfy all payment needs In addition, the Group continues to expand its various debt channels, actively strengthens the degree of participation in the issuance of financial bonds, inter-bank customer relationship management, and open market operations of the PBOC, expands interbank credit, builds up emergency fund reserves, attempts to expand the Group’s medium and long-term stable sources of liabilities, so as to improve the Group’s financing ability under high liquidity pressure In order to cope with its potential impact arising from fluctuation of capital market and changes of macro- economic environment, the Group modifies stress testing scenarios and performs liquidity risk stress tests on a regular basis, including the test of cash flow gaps in the future 7 days, 30 days and 90 days and implementation of shortest lifetime management of the Group by introducing the internal and external factors to test the tolerance of liquidity risks under different stress scenarios through stimulation of decline in the price of marketable securities and outflow of deposits Also, the Group monitors early-warning indicators daily, in consideration of its business size, complexity, level of risk and organisational structure, the Group has emergency plans in place and explicit internal labour division and emergency procedures, and organises involved departments of head office and branches to launch crisis response exercises to ensure its liquidity under a crisis situation CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 253 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (c) Liquidity risk (Continued) Maturity date analysis (Continued) 31 December 2023 Between one Between three Between Repayable Within one month and months and one year More than Indefinite on demand month three months one year and five years five years Total Note (i) Assets Cash and deposits with the central bank (Note (i)) 63,373,799 40,120,380 – – – – – 103,494,179 Deposits with banks and other financial institutions – 20,738,491 – 200,000 – – – 20,938,491 Placements with banks and other financial institutions 140,000 – 2,235,300 4,195,405 5,782,903 – – 12,353,608 Financial assets purchased under resale agreements – – 6,532,553 – – – – 6,532,553 Loans and advances to customers 12,562,552 7,488,374 109,568,892 94,609,323 230,433,255 261,280,358 204,452,095 920,394,849 Financial investments (Note (ii)) 24,796,351 31,707,447 68,081,384 28,720,906 107,807,306 300,106,168 71,917,230 633,136,792 Others 29,675,493 4,656,690 – – – – – 34,332,183 Total assets 130,548,195 104,711,382 186,418,129 127,725,634 344,023,464 561,386,526 276,369,325 1,731,182,655 Liabilities Borrowings from the central bank – – 20,534,723 31,373,494 81,879,747 – – 133,787,964 Deposits from banks and other financial Institutions – 38,428,688 9,471,720 32,469,960 78,391,854 – – 158,762,222 Placements from banks and other financial institutions – – 5,285,750 6,323,625 22,289,266 1,021,371 – 34,920,012 Financial assets sold under repurchase agreements – – 64,931,118 1,073,873 629,262 – – 66,634,253 Deposits from customers – 253,687,499 92,899,008 95,250,583 232,349,494 259,724,377 682,918 934,593,879 Debt securities issued – – 27,267,591 68,311,386 117,414,077 54,930,314 – 267,923,368 Others 16,603,237 – 1,415 335,629 728,372 2,316,260 733,912 20,718,825 Total liabilities 16,603,237 292,116,187 220,391,325 235,138,550 533,682,072 317,992,322 1,416,830 1,617,340,523 Net position 113,944,958 (187,404,805) (33,973,196) (107,412,916) (189,658,608) 243,394,204 274,952,495 113,842,132 Notes: (i) Indefinite amount of cash and deposits with the central bank represents the statutory deposit reserves and fiscal deposits with the central bank Indefinite amount of loans and advances to customers includes all the impaired loans and advances, as well as those overdue more than one month Indefinite amount of financial investments represents impaired investments or those overdue more than one month Equity investments are listed in the category of indefinite Loans and advances to customers and financial investments with no impairment but overdue within one month are classified into the category of repayable on demand (ii) Financial investments include financial investments measured at FVTPL, financial investments measured at FVTOCI, financial investments measured at amortised cost CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 255 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (c) Liquidity risk (Continued) Analysis on contractual undiscounted cash flows of non-derivative financial liabilities (Continued) 31 December 2023 Contractual Between one Between three Between one Carrying undiscounted Repayable Within month and months and year and More than amount cash flow Indefinite on demand one month three months one year five years five years Non-derivative financial liabilities Borrowings from the central bank 133,787,964 135,496,332 – – 20,559,167 31,513,676 83,423,489 – – Deposits from banks and other financial institutions 158,762,222 160,484,484 – 38,428,688 9,484,380 32,620,620 79,950,796 – – Placements from banks and other financial institutions 34,920,012 35,714,495 – – 5,302,279 6,368,358 22,994,035 1,049,823 – Financial assets sold under repurchase agreements 66,634,253 67,488,797 – – 65,778,063 1,077,630 633,104 – – Deposits from customers 934,593,879 948,634,672 – 253,687,499 92,950,882 95,528,188 235,143,434 270,439,008 885,661 Debt securities issued 267,923,368 275,181,748 – – 27,312,630 68,615,205 118,879,392 60,374,521 – Others 20,069,373 20,508,385 15,953,785 – 1,415 336,545 744,529 2,552,357 919,754 Total non-derivative financial liabilities 1,616,691,071 1,643,508,913 15,953,785 292,116,187 221,388,816 236,060,222 541,768,779 334,415,709 1,805,415 Credit commitments 327,833,888 327,833,888 – 20,322,293 52,489,815 72,256,766 167,712,210 15,052,175 629 This analysis on contractual undiscounted cash flows of non-derivative financial liabilities might diverge from actual results CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 257 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (c) Liquidity risk (Continued) Analysis on contractual undiscounted cash flow of derivative financial instruments (Continued) 31 December 2023 Within One month to Three months One year to one month three months to one year five years Total Derivative financial instruments settled on a net basis Interest rate swaps 380 7,175 907 1,905 10,367 Precious metal swaps – 108,711 109,482 – 218,193 Interest rate option contracts – – 18 – 18 Derivative financial instruments settled on a gross basis Exchange rate swaps – Cash inflow 32,395,814 22,004,892 28,250,283 1,356,741 84,007,730 – Cash outflow (32,195,520) (22,034,506) (28,439,457) (1,299,605) (83,969,088) Exchange rate forwards – Cash inflow 1,938,088 816,524 19,144,994 20,597,991 42,497,597 – Cash outflow (1,937,002) (814,855) (19,110,456) (20,536,211) (42,398,524) Foreign exchange option contracts – Cash inflow – 556,566 – – 556,566 – Cash outflow – (556,566) – – (556,566) CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 259 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 50 FAIR VALUE (Continued) (a) Methods and assumptions for determination of fair value (Continued) (iv) Derivatives Derivatives valued using a valuation technique with market observable inputs are mainly interest rate swaps, currency forwards, swaps and options, etc The most frequently applied valuation techniques include discounted cash flow model and the Garman Kohlhagen model extended from Black Scholes model The models incorporate various inputs including foreign exchange spot and forward rates, foreign exchange rate volatility, and interest rate yield curves (b) Fair value measurement (i) Financial assets The Group’s financial assets mainly consist of cash and deposits with the central bank, deposits with banks and other financial institutions, placements with banks and other financial institutions, derivative financial assets, financial assets purchased under resale agreements, loans and advances to customers, and financial investments Deposits with the central bank, deposits with banks and other financial institutions, placements with banks and other financial institutions and financial assets purchased under resale agreements are mostly carried interest at market interest rates and due within one year Accordingly, the carrying amounts approximate the fair values Loans and advances to customers are mostly priced at floating rates close to the LPR rates Accordingly, the carrying amounts approximate the fair values Derivative financial assets, financial investments measured at FVTOCI and financial investments measured at FVTPL are presented at fair value Financial investments measured at amortised cost are the approximations of their fair values because, for example, they are short-term or repriced at current market rates frequently (ii) Financial liabilities The Group’s financial liabilities mainly include deposits from banks and other financial institutions, financial liabilities at FVTPL, placements from banks and other financial institutions, derivative financial liabilities, financial assets sold under repurchase agreements, deposits from customers and debt securities issued Derivative financial liabilities are presented at fair value The fair value of debt securities issued are disclosed in Note 50 (c) The carrying amounts of other financial liabilities approximate their fair value CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 261 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 50 FAIR VALUE (Continued) (c) Fair value hierarchy (Continued) 31 December 2024 Level 1 Level 2 Level 3 Total Continuously measured at fair value Assets Derivative financial assets – 2,448,184 – 2,448,184 Loans and advances to customers at FVTPL – Corporate loans and advances – 36,880,971 – 36,880,971 Loans and advances to customers at FVTOCI – Corporate loans and advances – 2,959,772 – 2,959,772 – Discounted bills – 59,727,587 – 59,727,587 Financial investments measured at FVTPL – Bonds – 19,686,166 450,545 20,136,711 – Interbank certificates of deposits – 10,222,539 – 10,222,539 – Fund investments – 70,852,301 – 70,852,301 – Trust plans and asset management plans – 74,182,672 13,382,001 87,564,673 – Equity investments 500,699 204,849 3,383,219 4,088,767 Financial investments measured at FVTOCI – Bonds (excluding interests accrued) – 173,915,492 – 173,915,492 – Interbank certificates of deposits (excluding interests accrued) – 1,620,920 – 1,620,920 – Equity investments – – 200,026 200,026 Total 500,699 452,701,453 17,415,791 470,617,943 Liabilities Derivative financial liabilities – (1,799,883) – (1,799,883) Financial liabilities at FVTPL – (171,916) – (171,916) Total – (1,971,799) – (1,971,799) Not measured at fair value Liabilities Debt securities issued – (289,531,894) – (289,531,894) Total – (289,531,894) – (289,531,894) CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 263 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) CHINA BOHAI BANK CO, LTD 50 FAIR VALUE (Continued) (c) Fair value hierarchy (Continued) Movements during the year ended 31 December 2024 in the balance of Level 3 fair value hierarchy are as follows: Unrealised gains or losses for the year included in profit Transfer or loss for assets 1 January Transfer into out of Total gains or losses 31 December held at the 2024 Level 3 Level 3 for the year Additions, issues, sales and settlements 2024 end of the year Included in other Included in comprehensive profit or loss income Additions Issues Sales Settlements Assets Financial assets at FVTPL – Bonds 715,619 – – (265,074) – – – – – 450,545 (265,074) – Trust plans and asset management plans 13,063,378 – – 80,172 – 250,682 – – (12,231) 13,382,001 80,172 – Equity investments 3,366,940 – – 16,279 – – – – – 3,383,219 16,279 Sub-total 17,145,937 – – (168,623) – 250,682 – – (12,231) 17,215,765 (168,623) Financial investments measured at FVTOCI – Equity investments 3,262,738 – – – – 26 – (3,062,738) – 200,026 – Total 20,408,675 – – (168,623) – 250,708 – (3,062,738) (12,231) 17,415,791 (168,623) Annual Report 2024 Audit Report and Financial Report 265 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 50 FAIR VALUE (Continued) (c) Fair value hierarchy (Continued) The valuation techniques used for the Group’s financial instruments at fair value in Level 3 are the discounted cash flow method and the net asset value method, using unobservable inputs such as risk-adjusted discount rate, cash flows, net assets and liquidity discount, respectively For the years ended 31 December 2024 and 31 December 2023, there were no significant changes in the valuation techniques or significant transfers of financial instruments between levels 51 ENTRUSTED LENDING BUSINESS The Group provides entrusted lending business services to customers All entrusted loans are funded by entrusted funds from these customers The Group does not take any credit risk in relation to these transactions The Group acts as an agent to hold and manage these assets and liabilities at the direction of the entruster and receives fee income for the services provided The entrusted assets are not the assets of the Group and are not recognised in the statements of financial position Surplus funding is accounted for as deposits from customers 31 December 2024 2023 Entrusted loans 26,773,799 25,528,949 Entrusted loan funds 26,773,799 25,528,949 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 267 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 52 COMMITMENTS AND CONTINGENT LIABILITIES (Continued) (b) Credit risk-weighted amount for credit commitments 31 December 2024 2023 Credit risk-weighted amount 89,201,282 68,502,384 The amount of risk-weighted assets for credit commitments at the end of December 2024 is calculated in accordance with the Administrative Measures for the Capital of Commercial Banks issued by the NFRA (c) Capital commitments As at 31 December 2024 and 2023, the Group’s authorised capital commitments are as follows: 31 December 2024 2023 Contracted but not paid for 282,702 539,983 Authorised but not contracted for 34,253 92,697 Total 316,955 632,680 (d) Outstanding litigations and disputes As at 31 December 2024 and 2023, the Group has several outstanding litigations and disputes in its normal business operations Provision for litigation losses is estimated based on the court process and the opinion of the external legal counsel After consulting with external professional legal counsel, management believes that the final outcome of such legal proceedings and claims will not have a material impact on the financial position or operating results of the Group During the year ended 31 December 2021, the Group had a dispute with individual corporate customers over the business of bank acceptance bills pledged by certificates of deposit The Group had reported the case to the policy department During the year ended 31 December 2022, the Group filed a related lawsuit to the court As of the approval date of the Group’s financial statements, the case was in the judicial process The outcome of the case is subject to the judgement of the court, and the Group is of the view that the financial impact of the above dispute cannot be reliably estimated As a result, no relevant accrued liabilities were recognised as at 31 December 2024 and 2023 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 269 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 53 STATEMENTS OF FINANCIAL POSITION AND STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY OF THE BANK (Continued) (a) Statements of financial position of the Bank (Continued) 31 December 2024 2023 Liabilities and equity Liabilities Borrowings from the central bank 121,378,473 133,787,964 Deposits from banks and other financial institutions 150,621,717 159,002,675 Placements from banks and other financial institutions 23,144,745 34,920,012 Financial liabilities at FVTPL 171,916 – Derivative financial liabilities 1,799,883 990,612 Financial assets sold under repurchase agreements 57,818,338 66,634,253 Deposits from customers 1,067,561,795 934,593,879 Income tax payable (634,618) 808,026 Debt securities issued 290,863,182 267,923,368 Lease liabilities 3,699,357 4,070,191 Other liabilities 17,234,045 15,699,800 Total liabilities 1,733,658,833 1,618,430,780 Equity Share capital 17,762,000 17,762,000 Other equity instruments 11,000,000 19,961,604 Capital reserve 10,689,841 10,732,077 Surplus reserve 7,929,133 7,828,688 General reserve 21,038,180 20,632,499 Other reserves 1,732,924 (2,718,089) Retained profits 39,534,650 39,986,330 Total equity 109,686,728 114,185,109 Total liabilities and equity 1,843,345,561 1,732,615,889 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 271 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 53 STATEMENTS OF FINANCIAL POSITION AND STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY OF THE BANK (Continued) (b) Statement of Changes in Shareholders’ Equity of the Bank (Continued) Other Share equity Capital Surplus General Other Retained Notes capital instruments reserve reserve reserve reserves profits Total Balance at 1 January 2023 17,762,000 19,961,604 10,732,077 7,340,422 20,245,453 (3,038,853) 36,928,990 109,931,693 Net profit – – – – – – 4,882,652 4,882,652 Other comprehensive income – – – – – 320,764 – 320,764 Sub-total of comprehensive income – – – – – 320,764 4,882,652 5,203,416 Appropriation to surplus reserve 41 – – – 488,266 – – (488,266) – Appropriation to general reserve 41 – – – – 387,046 – (387,046) – Distribution to holders of other equity instruments 42 – – – – – – (950,000) (950,000) Balance at 31 December 2023 17,762,000 19,961,604 10,732,077 7,828,688 20,632,499 (2,718,089) 39,986,330 114,185,109 54 SUBSEQUENT EVENT On February 26, 2025, the Group issued green financial bonds with a face value of RMB5 billion, a term of 3 years and a fixed coupon rate of 189% per annum Except for the above, the Group had no other material events for disclosure subsequent to 31 December 2024 and up to the date of approval of this report CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 273 Unaudited Supplementary Financial Information For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 1 LIQUIDITY COVERAGE RATIO AND LEVERAGE RATIO (Continued) (c) Net Stable Funding 31 December 2024 2023 Available stable funding 1,073,032,883 942,723,127 Required stable funding 932,440,310 933,067,515 Net Stable Funding Ratio 11508% 10103% Pursuant to the Administrative Measures for Liquidity Risk Management of Commercial Banks, a minimum net stable funding ratio 100% is required The above liquidity coverage ratio, leverage ratio and net stable funding ratio are calculated in accordance with the formula promulgated by the former CBRC and based on the financial information prepared in accordance with China Accounting Standards 2 CURRENCY CONCENTRATIONS 31 December 2024 USD (RMB HKD (RMB Others (RMB equivalent) equivalent) equivalent) Total Spot assets 80,229,173 7,730,774 9,384,230 97,344,177 Spot liabilities (54,426,162) (4,491,442) (7,571,879) (66,489,483) Net position 25,803,011 3,239,332 1,812,351 30,854,694 31 December 2023 USD (RMB HKD (RMB Others (RMB equivalent) equivalent) equivalent) Total Spot assets 95,020,926 5,085,455 13,258,252 113,364,633 Spot liabilities (70,298,730) (3,676,029) (8,520,758) (82,495,517) Net position 24,722,196 1,409,426 4,737,494 30,869,116 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 275 Unaudited Supplementary Financial Information For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 GROSS AMOUNT OF OVERDUE LOANS AND ADVANCES 31 December 2024 2023 Gross loans and advances which have been overdue with respect to either principal or interest for periods of – between 3 and 6 months (inclusive) 2,532,594 2,755,065 – between 6 months and 1 year (inclusive) 3,562,921 2,700,061 – between 1 year and 3 years (inclusive) 6,374,601 7,750,545 – over 3 years 2,772,773 2,624,251 Total 15,242,889 15,829,922 As a percentage of gross loans and advances – between 3 and 6 months (inclusive) 027% 030% – between 6 months and 1 year (inclusive) 038% 029% – between 1 year and 3 years (inclusive) 068% 083% – over 3 years 030% 028% Total 163% 170% CHINA BOHAI BANK CO, LTD

REPORT ANNUAL

2025-04-29 17:57:39

Corporate Social Responsibility

2024 ESG REPORT OF CHINA BOHAI BANK Notes on Reporting I Reporting Scope This report focuses on CHINA BOHAI BANK CO, LTD and covers the Bank’s headquarters, branches and subsidiaries Due to the need for expression, such terms as “China Bohai Bank”, “the Bank” and “we” or “us” are used in this report This report is the fourteenth ESG (Corporate Social Responsibility) Report issued by CHINA BOHAI BANK CO, LTD This report is an annual report covering the period between January 1, 2024 and December 31, 2024 The previous report was issued in April 2024 II Principles of Preparation (I) As the Bank is an enterprise listed on the Main Board of the Stock Exchange of Hong Kong (stock code: 09668), this report complies with the principles of preparation under the Environmental, Social and Governance Reporting Code of the Stock Exchange of Hong Kong 1 Materiality: This report discloses the ESG materiality assessment efforts through “ESG Issues Identification”, “Materiality Analysis on ESG Issues”, “Stakeholders” and other sections 2 Quantitative: This report adopts a quantitative method for the measurement and disclosure of applicable key performance indicators Details are set out in sections such as “ESG Performance” and “Major Environmental Performance” 3 Balance: This report strictly adheres to the principles of objectivity, truthfulness and accuracy of disclosure to avoid errors or omissions that may inappropriately affect the reader 4 Consistency: This report maintains the consistency of statistical methodology and basis of key ESG performance as same as that of prior year Footnotes and explanation are made for indicators in which different statistical methodology and basis are applied (II) For various indicators of the Environmental, Social and Governance Reporting Code in relevant sections of this report, please refer to the section headed “Index of the Environmental, Social and Governance Reporting Code of the Stock Exchange” (III) This report also refers to the International Financial Reporting Standard S2 – Climate-Related Disclosures issued by the International Sustainability Standards Board (ISSB) and the GRI Standards issued by the Global Sustainability Standards Board (GSSB) (IV) Based on the Bank’s actual conditions, the indicators used in this report are highly relevant to major topics of social responsibility, which can effectively reflect the Bank’s performance in relevant topics and can be collected through the Bank’s existing management system III Approval of the Report This report has been reviewed and approved by the offi ce meetings of the president and the Board of Directors of the Bank when it is released to the public 01 IVData Description Unless otherwise stated, the fi nancial data in this report are derived from the Bank’s 2024 Financial Report, some of which involve data of other years Unless otherwise specifi ed, all currencies involved in this report are RMB The data on the balance of inclusive loans to small and micro enterprises, and the balance of green credit in this report are sourced from the regulatory statements submitted by the Bank to the National Financial Regulatory Administration (NFRA) V Guarantee Method To ensure the authenticity and reliability of reporting, Deloitte Touche Tohmatsu Certified Public Accountants LLP has performed assurance engagement for this report in accordance with the International Standard on Assurance Engagements 3000 (Revised) – Assurance Engagements Other than Audits or Reviews of Historical Financial Information (ISAE 3000), and expressed a limited assurance conclusion on the selected indicators in this report VI Form of Publication This report is published in electronic form and can be viewed on the Bank’s offi cial website (http://wwwcbhbcomcn) 02 2024 ESG REPORT OF CHINA BOHAI BANK Contents Notes on Rep辑orting 01 Strategy and Management 25 Chairman’s Statement 05 I ESG Strategy 27 President’s Statement 07 II ESG Issue Materiality Analysis 29 About China Bohai Bank 09 III Communication with Stakeholders 30 I Introduction to the Bank 10 II Organizational Structure 11 Environment 33 III Social Recognition 13 I Major Environmental Performance 35 II Green Finance Governance 36 ESG Performance 17 III Green Finance Strategy 39 I Economic Performance 19 IV Climate and Environmental Risk Management 41 II Environmental Performance 19 V Green Transformation: Green Finance Unveils New Horizons 48 III Social Performance 21 VI Collaborative Synergy: Energy Conservation and Emission Reduction Gained Momentum 53 03 Contents 2024 ESG REPORT OF CHINA BOHAI BANK Society 55 Governance 111 I Targeted Support: Inclusive Finance I Strengthening Corporate Governance Through Benefits People’s Livelihoods 57 Optimization and Enhancement 113 II Robust Framework: Advancing ESG II Aged Care: Pension Finance Delivers 67 Management 116 Results 辑 III Prudence as Principle: Risk Control as the III Innovation-Driven: Technology Finance 120 70 Lifeline Provides Strong Support IV Compliance as Bedrock: Integrity as the 123 IV Digital Empowerment: Digital Finance Cornerstone Accelerates Transformation 74 V Integrated Innovation: Supporting Collaborative Development Strategies 79 Appendix 127 Independent Limited Assurance Report 127 VI Service Excellence: Strengthened Management Fuels Growth 85 List of Important Systems for ESG-related Issues 132 VIIPrimary Responsibility: Building Index of the Environmental, Social and Governance Comprehensive Consumer Protection 90 Reporting Code of the Stock Exchange 135 VIII People-Centric: Fostering a Index of the International Financial Reporting Harmonious Workplace 96 Standard S2 – Climate-Related Disclosures 143 152 IX Smart Procurement: Rigorous Supply GRI Content Index Chain Management 102 Reader’s Feedback 157 X Proactive Commitment: Scaling Up 104 Investment in Public Charity 04 Chairman’s Statement In 2024, China Bohai Bank enhanced stability by making progress, persisted in bringing forth innovations and achieved growth in business development at a steady pace Our outlook for international ratings remained stable We achieved outstanding results with multiple first-time launches, thus continuously reinforcing high-quality development with achievements consistently made We focused on the “five priorities” and meticulously devised a transformation and revitalization strategy, with an emphasis on the “Three Upgrades” and “Three Points on Quantity and Quality”, which illustrated the potential for China Bohai Bank’s high-quality development We maintained our stable “A” rating in the ESG rating of MSCI, and were included in the list of “Top 20 Banks in ESG Comprehensive Performance” by China Banking and Insurance News with an AA rating Strived for improvement and perfection to serve the real economy Adhering to the basic principles of serving the real economy with financial services, China Bohai Bank empowered the new quality productive forces with technology finance, incorporated green finance into its development strategy, provided services across industries with inclusive finance, fulfilled the original aspiration of benefi ting people’s livelihoods with pension fi nance, and facilitated business transformation with digital finance Leveraging Beijing-Tianjin-Hebei collaborative development, the integrated development of the Yangtze River Delta and the development of the Guangdong- Hongkong-Maco Greater Bay Area, and other national and regional development strategies, we signifi cantly enhanced the effectiveness and coverage of our services to the real economy Painted a green picture and started a new chapter in green finance China Bohai Bank continuously improved the green finance governance system and constantly optimized the green fi nance development mechanism We are committed to building a “green fi nance bank” by incorporating climate and environmental risk management into our comprehensive risk management system, and actively promoting a complete transformation to green operations In 2024, the Bank achieved a significant improvement in the size of green finance operations and greater brand influence, which provided solid financial contribution to the development of an environmentally friendly society Nurtured public commitment and optimized services to build a bright future China Bohai Bank thoroughly implemented the principle of keeping political consciousness in mind and putting people first in its financial operations, adhered to the philosophy of serving the people through fi nance as the key driving force for development, constructed the work layout of “Big Consumer 05 Protection”, and fully fulfi lled its primary responsibility of protecting consumer rights and interests Guided by the “Professional Bohai” philosophy, we rigorously implemented employee development strategies With a “people-oriented” approach, we cherish our employees’ value and prioritize their well-being and life satisfaction By significantly increasing our investment in public welfare and charity, and continuously providing targeted poverty alleviation efforts, we spread the warmth of fi nance and contributed to improving people’s livelihoods Enhanced governance and fortified foundation with steadfast compliance Thoroughly adhering to the financial development with Chinese characteristics, China Bohai Bank strictly complied with “five must and five don’t”, and continuously played a leading role in ensuring comprehensive and strict governance of the Party We constantly improved our modern corporate system to continuously enhance our governance capabilities with a focus on strengthening the ESG governance capabilities of the Board of Directors We also enhanced our comprehensive risk management capabilities and strengthened our efforts in internal control and compliance management, so as to vigorously promote high-quality development and cooperation The year 2025 marks the 20th anniversary of China Bohai Bank, and is a crucial year for accelerating high-quality development We will continue to thoroughly study and implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, while integrating Party building, risk control and compliance, and digital transformation throughout all our operations We will focus on the transformation of the “Nine Major Banks” and fulfi ll our mission of serving the real economy through fi nancial services We will accelerate the development of the “Five Factories” to ensure steady and sustainable business growth By implementing “whole-factor, full-industrial-chain services”, we will advance the practice of the “Five Priorities”, collaborating with stakeholders to draw a “concentric circle” of high-quality development WANG Jinhong Secretary of the Party Committee and Chairman of CHINA BOHAI BANK CO, LTD March 2025 06 President’s Statement In 2024, China Bohai Bank adhered to the overarching principle of pursuing progress while maintaining stability, promoted stability by making progress, and established new mechanisms before phasing out old ones Centered on its “Nine Major Banks” strategic positioning, the Bank systematically advanced its “Ten Key Tasks”, steadfastly fulfilled the fundamental purpose of fi nance by channeling a continuous fl ow of fi nancial resources to support the real economy, society and people’s livelihoods These efforts yielded new achievements in fulfi llment of ESG responsibilities Increased and expanded technology finance The Bank adhered to the advantages of specialization, the concept of refinement, distinctive products and customized services to build an ecosystem for technology finance We launched a national pilot version and a local special version of the “Innovation Credit System”, highlighting the characteristics of our business model and contributing to the growth in size; created adaptive products, such as the launch of our star product “CBHB Technology Express Loan ( 渤銀科速貸 )”; actively promoted the online development of our products to enhance service effi ciency and facilitate technological innovation As of the end of 2024, the balance of our loans to technology enterprises amounted to RMB45,878 million, representing an increase of 901% Polished brand with green fi nance The Bank stimulated the growth momentum of green fi nance, and strengthened climate and environmental risk management The balance of our green loans amounted to RMB48,530 million, representing a year- on-year increase of 5525%, which was a record high over the past fi ve years in terms of both volume and growth rate We launched our fi rst fi nancing product of carbon emission rights pledge, launched the fi rst batch of transition fi nance loans for the chemical industry in Tianjin, and issued Tianjin’s fi rst sustainability-linked perpetual bond We received a perfect score in the “Green Bank Evaluation” by the China Banking Association and ranked fi rst among 21 major banks At the same time, we continuously optimized our operations, striving to reduce carbon footprint to advocate green development Achieved transformational breakthroughs in inclusive finance Adhering to the concept of putting people first, the Bank continuously deepened its fi nancial services to benefi t people’s livelihoods and achieved breakthroughs in inclusive fi nance We restructured our product portfolio to promote the transformation of inclusive fi nance into digital inclusion and transaction banking, continuously optimized the structure of inclusive loans, and further improved the long-term mechanism to maintain the courage, willingness, ability and expertise in loan granting As of the end of 2024, the Bank’s balance of inclusive loans amounted to RMB55,271 million, representing a growth rate of 738%; the number of inclusive loan accounts amounted to 129,465, representing a growth rate of 1193%, which fully met the regulatory growth rate targets and overfulfi lled the target of completing the inclusive credit plan We continued to improve the quality and effi ciency of our fi nancial services, and supported the comprehensive promotion of rural revitalization The balance of our agriculture-related loans amounted to RMB45,740 million, representing an increase of 279% Made proactive deployment in pension finance The Bank made every effort to promote the development of the third- generation social insurance card, annuity custody and individual pension accounts by focusing on the “three pillars” of pension fi nance, and conducted active research development in off-system pension accounts We created a catalogue of products and services encompassing the “Botai” pension series to actively establish a pension ecosystem, which provides comprehensive fi nancial services in key areas such as the health industry, elderly services and elderly facilities The pension fi nance business achieved growth in both the number of customers and asset size Strengthened and empowered digital fi nance The Bank implemented the dual drivers of digital technology and data, built up IT infrastructure with high standards, accelerated the development of the new-generation distributed core system, the new-generation Integrated Funds Business Management System and the Data Lake-Warehouse Integrated System, and increasingly optimized the function of the Bohai on the Palm ( 掌上渤海 ) APP The Bank intended to build up systems for large models and promoted application scenarios to achieve system empowerment 07 Integrated into the overall collaborative development The Bank took the initiative to participate in the Beijing-Tianjin-Hebei collaborative development strategy, with a fi nancing balance of RMB36,400 million, and launched the fi rst innovative “local government green bond basket” in the Beijing-Tianjin-Hebei region We established a two-tier shipping finance center, continuously improved and innovated its distinctive shipping fi nance toolbox to establish a distinctive shipping fi nance brand, and launched the fi rst corporate bond index in the interbank market in the Tianjin region, ie, the “Shanghai Clearing House China Bohai Bank Tianjin Port-Industry-City Integrated Development Bond Index”, and issued the fi rst cross-border e-commerce electronic customs guarantee in Tianjin We created new approaches to industrial fi nance, continuously optimized and expanded our customer base along the industrial chains, lowered the corporate fi nancing costs in the key industrial chains, and increased support for upgrading traditional industries and fostering new quality productive forces In the face of the strong momentum of technology innovation in the Yangtze River Delta region, we gave full play to our “CBHB Technology Innovation” comprehensive service system to propel the development of local new quality productive forces In the Guangdong-Hong Kong-Macao Greater Bay Area, we have established a collaborative service network between Guangdong, Shenzhen and Hong Kong to continuously strengthen the targeted support of fi nancial services in technology, trade and other sectors Centered on the “Boyin e-Chain” ( 渤銀E鏈 ) product system, we pioneered the “Customer Factory + Product Factory” dual-driver service model, which helped stabilize and consolidate the chain with diversifi ed fi nancial service innovations Unwavering commitment to people’s livelihoods The Bank actively responded to customers’ needs, continuously improved the service experience, and was committed to create fi nancial services with warmth We fostered a strong culture of consumer rights protection, insisted on integrating consumer rights protection elements throughout all processes, ensuring all employees assuming the responsibilities of consumer rights protection, so as to comprehensively enhance our capabilities and standards in consumer rights protection The Bank also participated in a wide range of public welfare activities in related sectors, with the annual charitable donation expense reaching RMB13,274,300 People-oriented and collaborative approach Adhering to the management concepts of responsible, professional and refi ned China Bohai Bank, the Bank increased its talent cultivation efforts by organizing fi ve “Bank-wide Business Training” to enhance the professionalism of its employees, with 1,100 employees participating in the centralized training and 52,000 employees in in online training We also continuously improved our remuneration and incentive mechanism, broadened the career path of our employees, and helped our young employees to grow rapidly We strictly adhere to our people-oriented philosophy, respect and protect the rights and interests of our employees, and focus on achieving work-life balance for our employees Fortifi ed risk control and compliance defenses The Bank adhered to strict business policies that set its risk control capability as the boundary and enhanced portfolio management by authorizations and processes control, strengthened policy guidance, and improved the comprehensive risk management system We also optimized our unified comprehensive credit system, accelerated the construction of our key systems to assist on decision-making, upgraded our risk control strategies, optimized our risk control tools, and carried out unifi ed post-credit monitoring, so as to effectively fortify our risk control defenses We continued to strengthen the construction of our compliance system, independently developed a grid-based management system, established a misconduct monitoring model, actively improved our level of case prevention, focused on preventing operational risks, and comprehensively improved our level of compliant operations In 2025, the Bank will take Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guide, actively fulfi ll its environmental, social and governance responsibilities We will continuously implement the “fi ve priorities”, serve the real economy and the people, and achieve new goals in the new journey of high-quality development, celebrating the 20th anniversary of China Bohai Bank with our outstanding ESG performance! QU Hongzhi Deputy Secretary of the Party Committee and President of CHINA BOHAI BANK CO, LTD March 2025 08 2024 ESG REPORT OF CHINA BOHAI BANK About china bohai bank About China Bohai Bank 09 About china bohai bank 2024 ESG REPORT OF CHINA BOHAI BANK Introduction to the Bank China Bohai Bank Co, Ltd (“China Bohai Bank”) is the only newly established national joint-stock commercial bank since the amendment to the PRC Commercial Banking Law in 2003, and the first Chinese commercial bank to introduce a foreign strategic investor at the stage of promotion and establishment, and the first national joint stock commercial bank headquartered in Tianjin China Bohai Bank was promoted and established by seven shareholders, namely TEDA Investment Holding Co, Ltd, Standard Chartered Bank (Hong Kong) Limited, China Ocean Shipping (Group) Company (currently known as China COSCO Shipping Corporation Limited), State Development & Investment Corporation (currently known as State Development & Investment Corp, Ltd), Shanghai Baosteel Group Corporation (currently known as China Baowu Steel Group Corporation Limited), Tianjin Trust and Investment Company Limited (currently known as Tianjin Trust Co, Ltd) and Tianjin Shanghui Investment Holding Company Limited It was established on December 30, 2005 and officially opened for business in February 2006 It was listed on the Main Board of the Hong Kong Stock Exchange on July 16, 2020 Adhering to keeping political consciousness in mind and prioritizing the well-being of the people in the financial endeavors, China Bohai Bank, by strictly applying discipline in finance, utilizing finance to serves the common good, and striving for financial integrity, consciously integrates social responsibility into development strategies and business management activities, while sparing no effort in serving national strategies, the real economy, and people’s well-being The Bank has strengthened its main responsibilities and businesses with a spirit of reform, established the “Nine Major Banks”, pursued the “Ten Special Tasks”, tackled the “Five Major Challenges”, and constructed the “Three Bohai”, achieving new results in high-quality development By the end of 2024, the total assets reached RMB1,843842 billion The Bank has established 34 tier-one branches, 35 tier-two branches, 291 sub-branches, and 16 small and micro community sub-branches in 65 key cities across China and the Hong Kong Special Administrative Region The total number of officially opened outlets reached 376 In addition, the Bank has established one branch-tier special institution capital operation center, and one tier-one subsidiary, namely CBHB Wealth Management Co, Ltd ( 渤銀理財有限責任公司 ) In 2024, China Bohai Bank won numerous awards in banking-related awards selections sponsored by authoritative media, including “Financial Institution with New Quality Productive Forces of 2024”, “Financial Institution for Consumer Rights Protection of 2024”, “Excellence in Corporate Finance Award of the Year”, “2024 Gamma Award for Technological Innovation”, “2024 Green Finance Pioneer”, “2024 Outstanding Financial Institution Empowering the Elderly Care Industry”, and other honors The recognition of “investment grade” and “stable” rating outlook by international rating agencies such as S&P and Moody’s demonstrates the market’s long-term and sustained optimism about the business development of China Bohai Bank 10 2024 ESG REPORT OF CHINA BOHAI BANK About china bohai bank Organizational Structure 11 About china bohai bank 2024 ESG REPORT OF CHINA BOHAI BANK 12 2024 ESG REPORT OF CHINA BOHAI BANK About china bohai bank Social Recognition The Bank once again won the “Excellent Financial Debt Issuers” at the annual awards event hosted by China Central Depository & Clearing Co, Ltd The Bank successfully passed the certification in relation to the maturity of data center service capability of the China Cybersecurity Review Technology and Certification Center, and obtained the rating of “outstanding” In the selection of the “Benchmark Cases of Data Elements (「數據要素 × 典型案例」)” hosted by the Tianjin Municipal Bureau of Statistics, the Bank was selected as a “Benchmark Case in the Financial Services Category” In the selection of the “2024 Banking Industry ESG Development Practices” hosted by China Banking and Insurance News, the Bank was included in the list of “Top 20 Banks in ESG Comprehensive Performance”, with an AA rating At the “2024 Bankers’ Financial Innovation Forum and Bankers’ Financial Innovation Results Conference” hosted by The Chinese Banker magazine, the Bank was selected for “Bankers’ Outstanding Case for Transaction Banking Innovation of the Year” and “Bankers’ Outstanding Case for Risk Management Innovation of the Year” In the collection of “21st Century Outstanding Cases of Financial Development 2024” hosted by 21st Century Business Herald, the Bank was recognized as “Financial Institution with New Quality Productive Forces of 2024” and “Financial Institution for Consumer Rights Protection of 2024” At the “2024 China Financial Development Forum and the 15th Golden Censer Awards” and the “Five Major Finance Cases” hosted by National Business Daily, the Bank won the “Excellence in Corporate Finance Award of the Year” award and the “Five Priorities in Finance Industry – Digital Finance Case” award In the collection of “2024 Outstanding Cases of Financial Enterprise Gala” hosted by The Economic Observer, the Bank was rated as “Outstanding Inclusive Bank of the Year” 13 About china bohai bank 2024 ESG REPORT OF CHINA BOHAI BANK For the “2024 China Banking Industry Gamma Award” hosted by Securities Times (Securities Firms China), the Bank won the “2024 Gamma Award for Technological Innovation” In the collection of the 2024 “China Ding” Outstanding Cases in the Financial Industry hosted by China Internet Information Center, the Bank was selected for “Outstanding Case for Financial Consumer Protection of the Year” In the selection of the 22nd “Hall of Fame of Finance Industry” hosted by Hexuncom, the Bank won the “Bank of Finance Production Innovation Award” In the selection of the 13th “Golden Intelligence Award” hosted by jrjcom, the Bank won the “Outstanding Cross- border Financial Services Award” In the selection of the “Excellent Financial Award 2024” hosted by Jiemian News, the Bank won the “Wealth Management Excellence Award of the Year” At the 2024 Financial Industry Annual Meeting and Top Financial Institutions awarding ceremony hosted by the Financial Association, the Bank won the “2024 Top Green Financial Institution Award” At the 2024 Huaxia Institutional Investor Annual Conference & the 18th Golden Cicada Awards Presentation hosted by China Times, the Bank won the “2024 Outstanding Financial Institution Empowering the Elderly Care Industry” award In the selection of the “ESG Golden Antelope Award at the 2024 ESG and High Quality Development Innovation Forum” and “2024 Golden Tangerine Award” hosted by The Time Weekly, the Bank won the “2024 Green Finance Pioneer” award and “Best Digital Finance Institution” award, respectively In the collection of the “2024 Typical Cases of Innovative Development in China’s Banking Industry” hosted by Tsinghua Financial Review, the Bank was selected for “Outstanding Case of Innovative Development in China’s Banking Industry” At the 7th Capital Market Summit & Golden Jubilee Awards Ceremony 2024 hosted by China Investment Network, the Bank was recognized as “2024 Outstanding Regional Service Bank” 14 2024 ESG REPORT OF CHINA BOHAI BANK About china bohai bank The Bank won the “Best Institution Award” in the “2023 E Fund Index · Wind Index Regular Investment Competition” jointly hosted by Wind and E Fund The Bank won the “Outstanding Customer Service in Private Banking Award” in the “16th Fund and Wealth Management • Jiefu Awards” selection hosted by Finance Vision China In the selection of the “17th Banking Industry • Jiefu Awards”, the Bank won the “Outstanding Elderly Financial Services Award” and “Outstanding Retail Bank Wealth Management Award” In the selection of the “15th Golden Pixiu Awards” co-hosted by E-commerce Financial Media, Financial Management Magazine, and Insurance Enterprise Management, the Bank won the “Golden Banking Insurance Channel Brand Power of the Year” award In the “2024 Wind Star Selection of Wealth Manager of the Year”, the Bank won the “Outstanding Institution Award” In the selection of the “Typical Cases of Digital Finance in the Banking Sector (2024) – ‘Digital Transformation of Personal Financial Services’ Category”, the Bank was recognized as an exemplar case In the 7th “CFP · E Fund – China Financial Planner Competition (2024)” jointly hosted by FPSB China and E Fund, the Bank once again won the “Best Organization Award” At the “3rd Retail Banking Summit and Jiefu Award Ceremony” hosted by Finance Vision China, the Bank won the “Outstanding Wealth Management Retail Bank Award” and the Tianjin Branch won the “Outstanding Wealth Management Subsidiary of Banks” award At the “Empowering New Quality Productive Forces, Building New Development in Asset Management Together – 2024 Asset Management and Wealth Management Industry Development Conference and the Fourth ‘Golden Honor Award’ Ceremony for 2024” hosted by PY standard, the Bank once again won three major awards: “Bank of Excellence in Wealth Management”, “Bank of Excellence in Private Banking” and “Bank of Excellence in Wealth Services Capabilities” In the “National Financial System Model for Learning from Lei Feng Activities and Model Selection Activities” jointly hosted by the China Financial Ideological and Political Work Research Association Lei Feng Spirit Inheritance 15 About china bohai bank 2024 ESG REPORT OF CHINA BOHAI BANK Committee and others, the Bank was honored with the title of “National Financial System Demonstration Site Learning from Lei Feng ( 全國金融系統學雷鋒活動示範點 )” The Bank won the bronze prize at the 2024 Tianjin Youth Volunteer Service Project Competition jointly hosted by the Tianjin Municipal Committee of the Communist Youth League, the Social Work Department of the Tianjin Municipal Committee of the Communist Party of China, and the Tianjin Municipal Civil Affairs Bureau 16 ESG Performance 2024 ESG REPORT OF CHINA BOHAI BANK ESG Performance I Economic Performance Indicator Unit 2023 2024 Total assets RMB’0,000 173,273,3836 184,384,2128 Operating income RMB’0,000 2,499,7370 2,548,1589 Net profi t RMB’0,000 508,0903 525,5815 Return on total assets % 030 029 Return on net assets % 448 444 Non-performing loan ratio % 178 176 Capital adequacy ratio % 1158 1163 Allowance coverage ratio % 15694 15519 II Environmental Performance (I) Emissions Indicator Unit 2023 2024 Scope 1 (direct) greenhouse gas emissions of 0,000 tonnes of the Head Offi ce CO2 equivalent 017 019 Scope 2 (indirect) greenhouse gas emissions 0,000 tonnes of 291 307 of the Head Offi ce CO2 equivalent Total hazardous waste of the Head Offi ce Tonne 0 0 Total non-hazardous waste of the Head Offi ce Tonne 1,545 1,460 Note: The “Electricity Emission Factor” is taken from the “2022 National Electricity Carbon Dioxide Emission Factor Data” released by the Ministry of Ecology and Environment on December 26, 2024 19 ESG Performance 2024 ESG REPORT OF CHINA BOHAI BANK (II) Use of Resources Indicator Unit 2023 2024 Total power consumption of the Head Offi ce kWh 20,743,392 21,437,093 Total power consumption of the Data Center kWh 20,650,820 22,141,060 Total gas consumption of the Head Offi ce m3 749,254 864,746 Total water consumption of the Head Offi ce Tonne 86,390 87,204 Total fuel consumption of offi cial vehicles of the Liter 14,873 12,053 Head Offi ce Indicator Unit 2023 2024 Paper usage for various promotion materials, cards and envelopes, single-sheet papers ’0,000 pieces 1795 654 Percentage of credit card customer using e-statement % 100 100 Paper saved from e-statement ’0,000 pieces 77123 81777 (III) Sewage and Waste The sewage generated by the Bank in the course of business operation and offi ce operation is discharged into the municipal sewage pipeline network in accordance with relevant laws and regulations Domestic garbage is transported by the local environmental health team for treatment on daily basis The garbage rooms are sanitized on a regular basis Comprehensive cleaning is conducted once a week, while sewage is cleaned once a month Other wastes are gathered and transported in a “harmless” manner (IV) Green Products and Services Indicator Unit 2023 2024 Percentage of business handled via electronic % 9638 9671 channels (V) Environmental Compliance In 2024, the Bank had no environmental protection violations, was not subject to legal proceedings or administrative penalties in this regard, and did not receive any environmental complaints 20 2024 ESG REPORT OF CHINA BOHAI BANK ESG Performance III Social Performance (I) Employment and Labor Practices The Bank’s remuneration system, oriented by development strategy, is consistent with the operation management requirements of modern commercial banks, coordinated with the interests of Shareholders, the Bank and employees, and aligned with the Bank’s current development requirements The Bank’s total payroll is closely linked to operational performance indicators, with adjustments to the increase rate made in reasonable alignment with market benchmarks such as labor productivity levels Remuneration management follows the principles of strategy orientation, classification management, value orientation, performance orientation and total amount control By benchmarking the remuneration levels of peers in the market, the Bank implements differentiated remuneration management for employees at different levels, thus bringing positive remuneration management in attracting, retaining and motivating talents The Bank’s remuneration is not affected by any gender factor Both male and female employees are paid according to their positions and duties Indicator Unit 2023 2024 Total number of employees Person 13,901 13,824 Number of female employees Person 7,403 7,413 Number of male employees Person 6,498 6,411 Number of employees under 30 years old Person 3,509 3,084 Number of employees aged 31-50 Person 9,554 9,809 Number of employees over 50 years old Person 838 931 Number of new employees Person 1,360 765 Number of employees from Chinese Mainland Person 13,843 13,760 Number of employees from Hong Kong Person 58 64 Employee turnover rate % 492 535 Turnover rate of male employees % 257 283 Turnover rate of female employees % 235 252 Turnover rate of employees under 30 years old % 160 194 Turnover rate of employees aged 31-50 % 318 329 Turnover rate of employees over 50 years old % 014 012 21 ESG Performance 2024 ESG REPORT OF CHINA BOHAI BANK (II) Development and Training Indicator Unit 2023 2024 Number of employee training sessions Session 4,075 3,987 Number of employees participating in training Person 1,268,308 1,114,930 Number of employees learning online Person 14,870 14,784 Average length of training and learning for employees Hour 3155 2157 Proportion of middle-level management participating in training % 100 100 Proportion of frontline employees participating in training % 100 100 Average length of training for middle-level management Hour 75 401 Average length of training for frontline employees Hour 3366 2776 22 2024 ESG REPORT OF CHINA BOHAI BANK ESG Performance (II) Development and Training Indicator Unit 2023 2024 Gender ratio of employees % 4638 5362 Gender ratio of middle and senior management % 8016 1984 Indicator Unit 2023 2024 Number of ethnic minority employees Person 633 626 (IV) Supply Chain Management Indicator Unit 2023 2024 Number of suppliers in Chinese Mainland Supplier 689 641 Number of overseas suppliers Supplier 7 15 Total number of centralized procurement projects Project 848 975 Budget amount involved in centralized RMB’0,000 procurement 89,558 61,607 Average project cycle of central ized procurement Day 34 29 Coverage ratio of centralized procurement catalog project performance management % 100 100 Coverage ratio of supplier review % 100 100 23 ESG Performance 2024 ESG REPORT OF CHINA BOHAI BANK (V) Product Responsibility Indicator Unit 2023 2024 Overall customer satisfaction % 9938 9933 Manual service volume of remote banking 10,000 persons 10986 10574 Online channel chat-bot service volume 10,000 persons 27436 66141 Number of customer complaints received Case 2,1907 2,2593 Number of performances being praised and recognized by customers Time 324 233 Indicator Unit 2023 2024 Number of domestic and overseas branches Branch 370 376 Number of domestic self-service banking outlets Outlet 370 374 Number of self-service devices Set 1,442 1,254 (VI) Charity Indicator Unit 2023 2024 Charity donation RMB’0,000 46598 132743 24 Strategy and Management Adhering to the mission of “supporting national strategies, the real economy and better well-being, creating sustainable value for shareholders, providing growth opportunities for employees and performing corporate responsibilities for the society”, the Bank cultivates a financial culture with Chinese characteristics, and strives to build a responsible, professional and refined China Bohai Bank The Bank renews its ESG strategy with enhanced alignment to international standards, continues to strengthen its ESG governance efforts, and works with stakeholders to pioneer high-quality development 2024 ESG REPORT OF CHINA BOHAI BANK Strategy and Management I ESG Strategy Honest and trustworthy, never overstepping boundaries Upholding our business philosophy of integrity and credibility, we abide by market rules and professional ethics, value our reputation, and strengthen the credit foundation for the high-quality development of the Bank By improving supervision and restraint mechanisms for authority distribution and operation, we reinforce the respect for discipline and rules of management personnel at all levels while enhancing awareness of integrity and responsibility among employees Furthermore, we facilitate the development of a credit system, and is committed to providing truthful information to consumers, while objectively disclosing information, protecting customer information, faithfully fulfilling contractual obligations, and never crossing ethical boundaries Pursuing profit through righteousness, not profit-seeking alone Keeping in mind the national priorities and actively putting ESG concepts in to practice, we properly manage the relationship between righteousness and profit, strengthen financial support for key areas and weak links, strengthen inclusive finance and rural revitalization financial services, and support the development in fields such as technological innovation, green and low-carbon initiatives, as well as enterprises using specialized and sophisticated technologies to produce novel and unique products Adhering to finance for the people, we are building a “Big Consumer Protection ( 大消保 )” framework with the goal of creating value for society and empowering a better life for the people, which integrates consumer rights protection into corporate governance, corporate culture development and business strategies, and in turn ensuring finance serves, benefits and enriches the people Steady management, avoiding quick-success mentality Adhering to prudent operations, we uphold sound business approaches, performance perspectives and risk awareness, and consistently regard risk prevention and control as an eternal priority Our business expansion is strictly bounded by our risk management capabilities We are committed to embedding bank-wide risk awareness, comprehensive risk management and end-to-end risk oversight into every employee’s mindset and every operational process Maintaining integrity while innovating, staying grounded in real economy To steadfastly serve the real economy, we focus on excelling in the “five priorities” of finance to promote mutual 27 Strategy and Management 2024 ESG REPORT OF CHINA BOHAI BANK advancement between serving the broader socio-economic landscape and the Bank’s own development Staying true to our primary responsibilities and principal operations, we promote financial innovation along the tracks of market orientation and rule of law To improve the quality and efficiency of our services, we implement the important requirements of the “Four Excellences” with a focus on key sectors to serve technological innovation and industrial transformation, thereby enhancing the adaptability, precision and effectiveness of financial services for the real economy Lawful and compliant operations, zero tolerance for misconduct We strengthen the construction of the rule of law, continue to improve our corporate governance capabilities, conscientiously operate within the scope of regulatory permissions in accordance with the law, and promote the standardization of internal corporate governance through rule-of-law thinking We firmly establish compliance awareness and continue to optimize internal control and compliance management mechanisms, so as to embed the concepts of compliance by all, compliance throughout the process, proactive compliance and compliance creating value into the hearts and actions of all staff We also strengthen institutional development by clearly delineating red lines and bottom lines, and sharpening the tool of accountability We persist in “turning the blade inward” self-examination and courageously “wield the sword” of accountability to deepen warning education and reinforce deterrent effects Green development, contributing financial strength We thoroughly implement the new development concepts of innovation, coordination, green, openness and sharing, comprehensively promote the construction of a green financial system, continuously promote the adjustment of the credit structure, and scientifically manage climate and environmental-related risks, so as to contribute our financial strength to achieving the strategic goals of high-quality development and fostering the development of new quality productive forces Building the Bank through talent, enhancing professional competencies Adhering to the Party’s leadership in personnel management, we follow the path of organization of the Party for the new era, and uphold the principle of selecting talents with both integrity and ability while prioritizing virtue We are forging a contingent of loyal, honest and responsible talents, strengthening personnel training and echelon development, continuously optimizing career growth pathways and team structure, and comprehensively enhancing workforce quality 28 2024 ESG REPORT OF CHINA BOHAI BANK Strategy and Management II ESG Issue Materiality Analysis Through the identifi cation, assessment and screening of ESG issues, the Bank identifi es substantive issues that are material to us and stakeholders, which are then disclosed and addressed in the annual ESG reports Substantive analysis Identifi cation Assessment Report The Bank deeply comprehends pol icy The Bank assesses High-substantiality requirements, directives and opportunities by the materiality of the i s s u e s a r e analyzing High-quality development contexts and identifi ed ESG issues disclosed in the ESG issues, benchmarking against domestic a n n u a l E S G excellent joint-stock commercial banks and The priority ranking reports or as the keeping abreast of domestic and international o f t h e i s s u e s i s focus of disclosure ESG trends g e n e r a t e d b a s e d on the mater ia l i ty On the basis of the above, the Bank identifies assessment the sustainability issues which are material to the Bank and key stakeholders Operation in compliance with laws Corporate governance Operating results and investment value Risk management Developing digital fi nance Employee training and career Advance technology-driven fi nancial servies development Develop elderly care-oriented fi nancial solutions Employee safety and health Developing inclusive fi nance Developing green fi nance Protection of customer rights and interests Honest operations Education of fi nancial knowledge Industry cooperation Social welfare initiatives Green operations Materiality to stakeholders 29 Materiality to China Bohai Bank Strategy and Management 2024 ESG REPORT OF CHINA BOHAI BANK III Communication with Stakeholders Environment (E) Stakeholders Expectations and Communication Requirements Channels Responsibility Response Environment Suppo r t g reen Implementation of green The Bank implemented green finance strategies, and environmental financial policies and enhanced climate and environmental risk management, protection regulatory requirements and comprehensively facilitated the construction of a green fi nance system D i s c l o s u r e o f e n v i r o n m e n t a l The Bank strictly controlled energy consumption and performance and key adhered to green operations indicators The Bank promoted green procurement to facilitate green development in supply chain The Bank disclosed key performance and indicator data of climate and environment related matters in accordance with the principles of truthfulness, accuracy and timeliness Social (S) Stakeholders Expectations and Communication Requirements Channels Responsibility Response Government Accomplish the C o n s i s t e n t The Bank resolutely took the road of financial and regulatory tasks se t fo r th i m p l e m e n t a t i o n o f development and comprehensively implemented authorities in the nat iona l economic and financial finance culture with Chinese characteristics, thus s t r a t e g y, a n d policies providing strong support the great rejuvenation of promote economic powerful Chinese nation through promotion of Chinese- a n d s o c i a l E x e c u t i o n a n d style modernization development i m p l e m e n t a t i o n o f regulatory requirements The Bank adhered to the fundamental purpose of O p e r a t e i n serving the real economy, optimized fi nancial services c o m p l i a n c e Participation in relevant through reform and transformation, accelerated w i t h l a w s a n d i n v e s t i g a t i o n s a n d development by promoting the new quality productive regulations, and meetings forces, and continued to strengthen its capability in achieve healthy serving real economy and high-quality development development Acceptance of dai ly s u p e r v i s i o n a n d The Bank enhanced its support for technology regulation innovation, advanced production, green development and medium, small and micro enterprise, and focused F i l i n g o f r e p o r t on the “fi ve priorities”, namely technology fi nance, green materials and statistical finance, inclusive finance, pension finance and digital statements, etc fi nance The Bank firmly implemented various regulatory policies, implemented comprehensive, proactive, agile and effective risk management, strengthened internal control, held the lifeline, and laid a solid foundation for the sustainable development 30 2024 ESG REPORT OF CHINA BOHAI BANK Strategy and Management Customers P r o v i d e h i g h - Research of customer The Bank has been improving its lean fi nancial services quality financial satisfaction rate capability p r o d u c t s a n d s e r v i c e s , a n d Investigation of customer The Bank enhanced its ability in application of fi nancial c o n t i n u o u s l y needs technology improve customer satisfaction The 95541 Customer The Bank promoted consumption upgrading, and Service Center and the boosted people’s wealth growth to meet people’s Credit Card Customer growing needs for a better life Service Center Official website, official WeChat account and other Internet channels Business market ing campaigns and fi nancial knowledge education activities Employees P r o v i d e v a s t The staff congress The Bank continuously expanded career development path for career channels d e v e l o p m e n t , Reporting and appeal a s c i e n t i f i c mechanisms The Bank improved the constraint and incentive r e m u n e r a t i o n mechanism a n d w e l f a r e Platform of “Dolphin system, and an Vocal Sound” The Bank resolutely safeguarded the legitimate rights excellent working and interests of employees environment Staff leisure and sports activities The Bank cared for employees’ physical and mental health and well-being Market Achieve mutual Daily communication Benign competition, equal cooperation, and honest benefit and win- performance win results Communicat ion and cooperation with other banks Bidding activities Visiting suppliers Public Participate in public Elimination of inequality The Bank continued to work on targeted poverty welfare initiatives, on development through alleviation efforts a n d p r o m o t e pub l i c we l fa re and social harmonious charity activities The Bank insisted on participating in public welfare development initiatives, and widely promoted the education of Promotion of employee fi nancial knowledge volunteer services to actively contributing The Bank supported and encouraged employees to to the bui ld ing of a participate in volunteer services harmonious society Support for community construction and launch of community service campaigns 31 Strategy and Management 2024 ESG REPORT OF CHINA BOHAI BANK Governance (G) Stakeholders Expectations and Communication Requirements Channels Responsibility Response Shareholders R e a l i z e R e g u l a r r e p o r t s The Bank delivered sound operating results, s u s t a i n a b l e a n d i n f o r m a t i o n continuously strengthened corporate governance, and o p e r a t i o n s , announcements improved the information disclosure mechanism improve return on investment, The general meeting, a n d d i s c l o s e the meeting of Board information in a of Directors and i ts timely, truthful, spec ia l commi t tee , accu ra te and the meeting of Board comprehensive of Supervisors and its manner special committee I n v e s t o r s communication Society C o n d u c t R e g u l a r r e p o r t s The Bank established a sound management system sc ient i f ic and a n d i n f o r m a t i o n on climate-related risks, and continuously strengthened comprehensive announcements corporate governance m a n a g e m e n t over c l imate - The Bank conducted stress testing on climate and related risks, and environmental risks promote green and low-carbon development 32 Environment As it is said that “Lucid Waters and Lush Mountains are Invaluable Assets”, green development is the foundation for high-quality development In 2024, by adhering to the market-oriented principle and enhancing multi-party collaboration, China Bohai Bank proactively explored opportunities in green finance, thus achieving multiple fi rst-time launches Attributable to the outstanding achievements made in green fi nance operations, China Bohai Bank recorded perfect score in both quantitative and qualitative indicators under the Green Bank Evaluation hosted by the China Banking Association It ranked top among 21 major banks in China, and was awarded the title of “Advanced Unit in Green Bank Evaluation” 2024 ESG REPORT OF CHINA BOHAI BANK Environment Major Environmental Performance Indicator Unit 2023 2024 Green loan business Balance of green loans RMB100 million 31260 48530 Year-on-year increase in green loans % 1448 5525 Proportion of balance of green loans % 335 517 Notes: 1 Balance of green loans is aggregated by the green credit data of the Bank on the basis of People’s Bank of China 35 Environment 2024 ESG REPORT OF CHINA BOHAI BANK Green Finance Governance (I) Green Finance Organizational Structure The The Board of Directors of the Bank has established the Risk Management decision- making Committee and Green Finance Committee to formulate green finance level development strategies, as well as supervise and evaluate the strategy implementation The senior management of the Bank has set up a green finance leading group, as led by the president and vice president of the Head Office, which is responsible for the organization and leadership of green finance operations throughout the Bank According to the green finance development strategies formulated by the Risk Management Committee and the Green Finance The Committee of the Board of Directors, the green finance leading group has set the management level objectives of green finance operations, established mechanisms and processes, clarified responsibilities and authorities, conducted internal control inspection and assessment, reported the development of green finance to the Risk Management Committee and the Green Finance Committee of the Board of Directors annually, reported the progress of work to regulatory authorities and disclosed information as required 36 2024 ESG REPORT OF CHINA BOHAI BANK Environment The Group Accounts Department of the Bank (Green Finance Department) is responsible for taking the lead in coordinating and promoting the green finance business development of the Bank and providing all-round green finance business support for branches Other departments of the Head Office The are responsible for joining the lead departments to promote the Bank’s green implementation finance operations and capacity building for low-carbon development The Bank level encourages all branches to set up a green finance leading group, as led by the branch president, to systematically promote green finance business and the development of green industry clusters in the region, enhance the ESG risk identification, prevention and control capabilities of branches, and implement green operations in different branches (II) Green Finance Policies and Systems To actively respond to the requirements of national and local green fi nance policies, the Bank continuously improved its green fi nance policies and systems, and has formulated and published, amongst others, the Green Finance Analysis Report of China Bohai Bank and Action Plan for Wholesale Business Development (2023-2025) and the Management Measures for the Proceeds from Green Financial Bonds of China Bohai Bank Details of which are as follows: Green Finance Policies and Systems of China Bohai Bank Document name Document number Main contents Guidance Opinions on Further Promoting the development of green Bo Yin Xing Ban Promoting the Development of Green finance, specifying the goals, and [2021] No 571 Finance Business of China Bohai Bank focusing on key industries Specifying the path to implement the Notice on Carrying out Work on Carbon Bo Yin Pi Fa [2022] policy for carbon emission reduction Emission Reduction Support Tools No 3 support tools and its incentive arrangements 37 Environment 2024 ESG REPORT OF CHINA BOHAI BANK Strengthening green f inancing N o t i c e o n S t r e n g t h e n i n g t h e Bo Yin Pi Fa [2022] data management to reflect the Management of Green Financing No 11 authentic and accurate results of the Statistical Data development of green finance Notice on Forwarding the Notice of the Specifying the continuation of the People’s Bank of China on Matters implementation of carbon emission Related to the Continuation of the Bo Yin Pi Fa [2023] reduction support tools and its Implementation of Carbon Emission No 10 incentive arrangements Reduction Support Tools Notice on Further Regulating the Work Further regulating the requirements Bo Yin Pi Fa [2023] Related to Carbon Emission Reduction and work arrangements for the No 16 Support Tools application of carbon emission reduction support tools Analyzing the development of green Notice on Publishing the Green finance of the Bank, and formulating Finance Analysis Report of China Bohai Bo Yin Fa [2023] No 73 three-year action goals and action Bank and Action Plan for Wholesale path plans for wholesale banking to Business Development (2023-2025) promote green finance Strengthening the management of Management Measures for the proceeds from green financial bonds, Proceeds from Green Financial Bonds Bo Yin Xing Ban and ensuring the dedicated use of of China Bohai Bank [2024] No 275 proceeds from green financial bonds for supporting green industries Implementing the national top-level strategic goal layout of “carbon peak and carbon neutrality”, serving Carbon Emission Rights Pledge the national green and low-carbon Bo Yin Xing Ban Financing Business Management deve lopment , suppor t ing the [2024] No 327 Measures of China Bohai Bank (Trial) development of a carbon emission rights trading market, broadening corporate financing channels, and enhancing the competitiveness of the Bank’s products 38 2024 ESG REPORT OF CHINA BOHAI BANK Environment Green Finance Strategy Adhering to the concept of high-quality development and the dual carbon goals, the Bank actively promoted green transformation and is committed to building China Bohai Bank into a true “green fi nance bank” Leveraging green credit and diversifi ed products, the Bank continuously expanded business sectors, such as green investment banking, green leasing, green funds, green consumption and carbon fi nance, to provide customers with comprehensive, diversifi ed and high-quality green fi nancial services With an aim of becoming a leading domestic bank in green fi nance, we strive to become a fi rst-class “comprehensive green fi nance services provider” Signifi cant growth in business scale The fi nancing balance of green fi nance doubled in three years and the scale of green fi nancing reached 20% of the asset scale within fi ve years The annual growth rate of the balance of green credit remained higher than the growth rate of all loans of the Bank, and the proportion of corporate loans increased from the current 3% to 10% All types of green fi nance businesses strive to achieve a leading position comparable to our peers The proportion of green credit bond investments increased continuously, and the scale and market competitiveness of green direct fi nancing reached advanced levels among peers Strengthened brand advantage The Bank established a multi-level and multi-dimensional business system covering green credit, green direct fi nancing, green consumer fi nance and carbon fi nance, forming a product brand series with market infl uence With a rich and diverse service model, the Bank significantly increased its green finance innovation capabilities and established a solid network of cooperative with banks, governments, businesses, academia and research institutes In addition, the Bank has established multiple green fi nance innovation demonstration in China, the green fi nance brand image of Bohai Bank has become a fi rst-class brand widely recognized in the market 39 Environment 2024 ESG REPORT OF CHINA BOHAI BANK Further enhanced systems and mechanisms The Bank has established a special mechanism focusing on policies and systems, business evaluation, resource allocation and team building The mechanism is well-adapted to the development of the green finance business, fully activating and unleashing endogenous development momentum The cooperation between the Head Office and branches, as well as the synergies between business lines, has been functioning effectively in supporting the development of the green finance business, while the organizational capability, operational vitality and protection capacity have been significantly enhanced The Bank has made significant progress in building professional capabilities in green finance, and has strengthened leadership in professional fields such as domestic and international green finance standards, policy and system establishment, and carbon finance Significantly improved risk control capabilities Overall, the credit risk of the green finance business is controllable The non-performing loan ratio of green credit is lower than the average non-performing loan ratio of the Bank and there have been no major risk losses in all types of green finance business We strive to achieve domestic leading levels in terms of the establishment of an environmental, social and corporate governance (ESG) system and the results of regulatory assessments 40 2024 ESG REPORT OF CHINA BOHAI BANK Environment Climate and Environmental Risk Management The Bank has incorporated climate-related risk management into its comprehensive risk management system to fully identify climate-related risks and opportunities in business operations and investment and fi nancing, and strengthen risk monitoring and reporting The Bank has also conducted climate stress tests on the chemical, steel and power industries, assessed the impacts of carbon emission costs on the quality of credit assets, and adopted differentiated strategies and process controls to manage climate-related risks During the reporting period, the Bank did not incur any signifi cant losses due to climate risks, and the level of climate- and environment-related risks was relatively low (I) Identification, Assessment, Management, Monitor and Control Process 1 Identifi cation and assessment of climate-related risks and opportunities The Bank has incorporated climate risk management into its comprehensive risk management system to identify climate- related risks and opportunities in business operations and investment and fi nancing activities Climate risk management is an integral part of the Bank’s ESG risk management (1) Identifi cation and Assessment of Climate-Related Risks The Bank identifies and analyses climate-related risks faced in business operations and investment and fi nancing business from the perspective of physical risks and transition risks, including the short, medium and long term effects on major risks, such as credit risk, market risk, liquidity risks, operational risks, reputational risks, country risks, strategic risks and information technology risks 41 Environment 2024 ESG REPORT OF CHINA BOHAI BANK Major risks Climate-related risk factors and major effects Term Physical risks: Extreme weather damages the value of corporate assets, leading to damaged or depreciated collateral, or affecting the supply chain, thereby affecting business operations, Short, profitability and survivability, and increasing the default rate medium and Credit long term risks Transition risks: Carbon reduction policies affect the profitability of carbon-intensive companies, and related assets may become stranded Physical risks: Extreme weather may damage national infrastructure, weaken economic growth and employment, and lead to a decline in credit ratings, which may affect the value of Short, assets held on the balance sheet medium and long term Market ransition risks: The goal of carbon peak and carbon neutrality risks will lead to changes in investor preferences and a decline in the expected returns on carbon-intensive assets, which may expose us to valuation decline and increased investor volatility Physical risks: Extreme weather causes widespread damage to physical assets, resulting in construction and maintenance costs, leading to a surge in demand for withdrawals and emergency Medium and loans, and exacerbating liquidity pressures In terms of climate long term risk management, adverse corporate-issued securities may be rejected, leading to difficulties in raising funds Liquidity risks Transition risks: As environmental awareness grows, depositors and investors will increase their support for green financial services, which will affect funding sources for other financial services 42 2024 ESG REPORT OF CHINA BOHAI BANK Environment Physical risks: Extreme weather may have a negative impact on corporate infrastructure, systems, processes and employees, disrupting business continuity Medium term Operational risks Transition risks: In the process of adapting to climate changes, losses may occur if internal corporate processes and systems are unable to meet the requirements Physical risks: Extreme weather and natural disasters may affect the safe and stable operation of an enterprise, leading to supervision and evaluation by regulatory authorities on the enterprise’s management capabilities for climate-related physical risks, which may lead to regulatory compliance risks Transition risks: The green land carbon transformation of the Short, national economy, society, industry, and corporate operations, medium and Compliance risks as well as changes in industrial development and corporate long-term operations, may affect corporate business operations and risk management, leading to supervision and evaluation by regulatory authorities on the enterprise’s management capabilities for climate-related transformation risks, which may lead to regulatory compliance risks Physical risks: Providing financial support to customers and their projects that damage habitats and affect biodiversity may lead to reputation risks Transition risks: Due to the green land carbon transformation Short, Reputational of the national economy, society, industry, and corporate medium and risks operations, continuous provision of financing for enterprises with long-term “high pollution, energy consumption and emission” or substantial increase in carbon-intensive assets may lead to reputational risks 43 Environment 2024 ESG REPORT OF CHINA BOHAI BANK Physical risks: Extreme weather may have a negative impact on business strategies of enterprises Enterprises that have not fully considered the impact of climate-related risk drivers in their original business strategies will be exposed to strategic risks Medium and Transition risks: Due to the low-carbon and green long term Strategic transformation of the national economy and society, major risks changes in the production and operation of enterprises and intensified competition in green finance, the original business strategies of enterprises may not be able to meet new market demands, which may lead to strategic risks Physical risks: Continuous rise in sea level may have a negative impact on the infrastructure and economy of coastal countries medium and Transition risks: Countries relying on traditional high-carbon long-term Country development models may face impacts and challenges during risks the transformation to a green and low-carbon development model Physical risks: Extreme weather may have a negative impact on equipment and systems of enterprises, which may cause system failures, data loss or damage, resulting in financial or reputational losses Short and Information Transition risks: Due to the low-carbon transformation of the medium term technology risks economy and society, the operations of banks or enterprises may experience major changes Existing information technology may not meet new requirements, resulting in fi nancial losses (2) Identifi cation of Climate-Related Opportunities The Bank actively responds and adapts to business development opportunities in the changing climate and promotes green development 44 2024 ESG REPORT OF CHINA BOHAI BANK Environment Major opportunities Key initiatives Incorporating climate risk management into the comprehensive risk management system and the entire credit approval process for investment and fi nancing activities Keeping abreast of climate-related laws, policies and regulatory requirements, strengthening research on traditional energy industry and Sound climate risk management system high-carbon industry, and timely adjusting and optimizing credit policies for traditional energy industry, high-carbon industry and key sectors of green development Establishing a climate-related risk analysis framework For traditional energy industry and high-carbon industry which are more vulnerable to the impact of transition risks, analyzing the physical risks and transition risks faced by the asset portfolio, conducting risk assessments, early warning, monitoring and emergency drills Building a diversifi ed product system covering green credit and green bonds to meet market demands Increasing support for the development of green Developing green industries and key sectors of low-carbon transformation and the upgrading fi nance of traditional industries such as clean energy, energy conservation and environmental protection, and carbon reduction technology Actively and steadily promoting the green transformation of asset structures Continuously promoting digital business strategy, innovating and promoting Promoting digitalization online products and services, improving service quality and efficiency, transformation reducing operating costs and enhancing market competitiveness Promoting green Promoting green offi ce, green procurement and green travel to effectively operation reduce energy consumption and costs 45 Environment 2024 ESG REPORT OF CHINA BOHAI BANK Improving the business contingency planning system, clarifying the requirements for emergency management of natural disasters, establishing and improving mechanisms such as material reserves, disaster prevention inspections and duty reports to ensure the safety of customers and Enhancing emergency employees, as well as the continuous and smooth provision of financial response capability services Organizing business continuity training and emergency drills to improve the ability to respond to and handle emergencies Strengthening the construction of multiple data centers to improve the ability to ensure stable operation 2 Climate and Environment-Related Risk Monitoring and Reporting The Bank regularly monitors and analyzes the balance and percentage of credit granted and utilized by market entities in high-carbon and high transformation risk industries The Bank also strengthens the monitoring and reporting of climate- related physical risks to enhance its business continuity management and contingency management capabilities 3 Climate and Environment-Related Risk Control and Mitigation The Bank has adopted risk management measures such as key business strategies, differentiated authority and processes, and list-based management to proactively control and mitigate climate risks in business operations and the investment and fi nancing business (II) Climate and Environment-Related Risks In accordance with the ESG Risk Management Policies of China Bohai Bank Co, Ltd and the Measures for ESG Risk Management of the Credit Business of China Bohai Bank, the Bank identifi es and manages the climate-related risks and opportunities in the course of business operations and credit customer risk management During the reporting period, the Bank did not incur any signifi cant fi nancial risk losses related to climate and environment and the level of risk was very low 46 2024 ESG REPORT OF CHINA BOHAI BANK Environment (III) Climate and Environmental Stress Tests During the reporting period, the Bank selected the chemical, steel and power industries as the target industries for climate and environmental stress tests to test the possible default risk of customers under different carbon price scenarios, explore and analyze the possible climate risks, and ascertain the impact of the increase in the cost of carbon emissions of enterprises in high-carbon industries on the quality of credit assets held by the Bank in high-carbon industries The 35th meeting of the Risk Management and Green Finance Committee under the fifth session of the Board of China Bohai Bank Co, Ltd 47 Environment 2024 ESG REPORT OF CHINA BOHAI BANK Green Transformation: Green Finance Unveils New Horizons The Bank insists on taking a target-oriented approach, stays committed to upholding fundamental principles and breaking new ground, and strives to become a “green bank” As at the end of 2024, the balance, increment and growth rate of green loans of China Bohai Bank all reached new highs over past five years The balance of such loans amounted to RMB48,530 million, representing an increase of RMB17,270 million or 5525% as compared to the beginning of the year Loans to the clean energy sector amounted to RMB15,588 million, representing an increase of RMB7,998 million or 10538% as compared to the beginning of the year The Bank achieved “Four First-Time Issuances” in green fi nance First, the Bank issued green fi nancial bonds, which was the first green financial bonds issued by a corporate bank incorporated in Tianjin, to fund lending and broaden low-cost funding sources for green credit, with the proceeds used in supporting green industrial projects in the energy conservation and environmental protection sector, the clean energy sector and green infrastructure upgrades, thereby promoting the quality and quantity of the green loan business Second, the Bank flexibly applied its products, and innovated carbon financial products The Bank issued its first financing product of carbon emission rights pledge to further improve its green financial product system, and fully utilize carbon reduction support tools Third, the Bank launched transition loans in line with the low-carbon trends The Bank effectively linked green fi nance with transition fi nance to serve Tianjin Bohai Chemical’s green and low-carbon transformation project The Bank launched the fi rst batch of transition finance loans for the chemical industry in Tianjin, further enhancing the quality and efficiency of fi nancial support for green and low-carbon development Fourth, the Bank supported green construction by assisting in the issuance of sustainability-linked bonds The Bank acted as the lead underwriter of Tianjin’s fi rst sustainability-linked perpetual bonds and carbon-neutral bonds, and granted EOD model project loans 48 2024 ESG REPORT OF CHINA BOHAI BANK Environment CASE The Bank was awarded the title of Advanced Unit in Green Bank Evaluation In 2024, in the Green Bank Evaluation hosted by the China Banking Association, the Bank made a historic breakthrough by obtaining full scores in both quantitative and qualitative indicators for the first time, and ranking first among 21 major banks in China with its positive results achieved in green finance, and was awarded the honorable title of “Advanced Unit in Green Bank Evaluation” With the continuous promotion of the dual carbon goals and top-level national policies, the green concept had been gradually incorporated into the Bank’s essence The Bank fully activated its organic momentum towards “green” development, and continued to implement the decisions and deployments of the Party Central Committee and the State Council, actively implemented the national concepts of green development and a sustainable development strategy, implemented the “Ten Actions”, fully supported the construction and development of a beautiful Tianjin, and empowered the accelerated development of its green business In order to promote the active development of green fi nance by fi nancial institutions in the banking sector, and provide better fi nancial support for carbon peaking and carbon neutrality, the Green Credit Committee of the China Banking Association has conducted a green bank evaluation among 21 major banks in China since 2021 under the unifi ed assignment of the National Financial Regulatory Administration, aiming to demonstrate the achievements of the banks in green fi nance The evaluation in 2024 involved more than 300 qualitative and quantitative indicators Qualitative indicators included process management such as organizational management, policy and capacity building, green innovation, approval, compliance, and duration, information disclosure, financial technology, assessment, training, etc; and quantitative indicators included green investment and fi nancing, emission equivalents, etc The Bank launched the fi rst batch of transition fi nance loans in Tianjin In June 2024, the Bank provided 3-year “transition fi nance loans” to the companies within Bohai Chemical Group with preferential interest rate support These loans were the fi rst batch of transition fi nance loans for the chemical industry in Tianjin after the issue of the Implementation Guide for Transition Finance in Key Areas of Tianjin Chemical Industry The project loan funds were fully utilized for the construction of the Tianjin Bohua Chemical’s steam condensate waste heat recovery technology transformation project, a “public auxiliary facility transformation” project under the low carbon transformation technology path, which involved various chemical products such as caustic soda, propylene, and so on It was estimated that the annual carbon dioxide emission will be reduced by 3,738 tons upon completion The chemical industry is one of Tianjin’s advantageous pillar industries and a key area for promoting green and low-carbon transformation In order to support the transformation and development of the chemical 49 Environment 2024 ESG REPORT OF CHINA BOHAI BANK industry in Tianjin, the Bank has set up a green fi nance development platform at the Head Offi ce level, and actively promoted the transformation of traditional fi nance to green fi nance in terms of resource allocation, product development, channel construction and information sharing At the beginning of 2023, the Bank signed a strategic cooperation agreement with Bohai Chemical Group to provide key support to Bohai Chemical Group’s green transformation and development After the issue of the Implementation Guide for Transition Finance in Key Areas of Tianjin Chemical Industry by the Tianjin government, the Bank has actively participated in bank-enterprise matchmaking to understand the transformation fi nancing needs of enterprises in real time, promoted the effective link between green fi nance and transition fi nance, continuously explored the application of transition finance standards, and accelerated the pace of innovation of green financial products, so as to further improve the quality and effi ciency of fi nancial support for green and low-carbon development, and to serve the high-quality development of the economy In terms of top-level design, the Bank has explicitly included transition fi nance in its top-level design planning and established the green fi nance center of the Group Accounts Department (Green Finance Department), assigned industry managers for key industries, and initiated forward-looking research on theories of transition fi nance for key traditional industries such as the chemical industry In terms of product and service innovation, the Bank has launched a featured innovative product “Green Asset-Backed Loan” and a fi nancing product of carbon emission right pledge, and while vigorously promoting the “Green Asset-Backed Loan”, the Bank is gradually exploring the Sustainable Development-Linked Loan (SLL), At the same time, while vigorously promoting the “Green Asset-backed Loan”, the Bank gradually explores products and service solutions such as Sustainability-linked Loan (SLL), Sustainable-linked Bond (SLB), Carbon Transformation Special Loan, Transition Bond, Supply Chain Transformation Support Loan, and Low-carbon Transformation-linked Loan, so as to build up a product system of transition fi nance In addition, the Bank promotes the construction of a system for transition fi nance management, embeds the indicators related to transition fi nance into the credit management process, and establishes the supporting management tools, standards and systems for the promotion of risk management for transition fi nance The Bank successfully issued the first green financial bonds as a corporate bank incorporated in Tianjin In June 2024, the Bank successfully issued the fi rst green fi nancial bond in the amount of RMB5 billion with a term of 3 years and a coupon rate of 205%, being the fi rst green fi nancial bond issued by a corporate bank incorporated in Tianjin The proceeds are utilized in projects of energy conservation and environmental protection, cleaner production and clean energy in strict accordance with the Green Bond Endorsed Projects Catalogue (2021 Edition) and relevant policies to reduce loan fi nancing costs for green enterprises, enhance market competitiveness and facilitate business transformation 50 2024 ESG REPORT OF CHINA BOHAI BANK Environment CASE Tianjin Branch accelerated the green fi nance transformation process Guided by the spirit of the important instructions from General Secretary Xi Jinping on Tianjin and his important speech made during his visit to Tianjin, centering on the Opinions on the Construction of Beautiful Tianjin, and anchoring low-carbon economy, circular economy and ecological economy, the Tianjin Branch of the Bank actively built up a green fi nance service brand through top-level design, mechanism enhancement and product innovation Strengthening green fi nancing support with various fi nancing tools The Tianjin Branch has conducted in-depth studies on the regional characteristics of Tianjin, and has intensifi ed its fi nancing support by closely focusing on green manufacturing industries such as high-end equipment manufacturing, new energy vehicles, green petrochemicals and photovoltaics As of the end of 2024, the branch’s green credit balance amounted to nearly RMB10 billion, representing year-on-year growth of over 90% and a compound annual growth rate of nearly 40% Initial achievements were evident In addition to traditional credit fi nancing, the branch also promoted green fi nancing in the bond market to broaden the fi nancing channels for enterprises and projects Through bond investment and fi nancing, the branch supported the construction and operation of urban rail transportation and hubs with nearly RMB2 billion In July, the branch issued carbon neutral bonds for a new energy company to further support scientifi c and technological innovation and technological transformation in green and low- carbon areas of clean energy In September, the branch successfully issued Tianjin’s first sustainability- linked perpetual bonds, which provided fi nancial support for the issuer’s energy-saving, carbon-reducing and transformation development, and for the implementation of the national strategy of sustainable development Enriching green products and services and actively exploring fi nancial support modes The Tianjin Branch fully supported the construction of the carbon emissions trading market, fl exibly utilized various green fi nancial products of the People’s Bank of China such as carbon reduction credit facility and carbon pledges to further broaden the fi nancing channels of enterprises, and actively promoted the implementation of reserve projects It enriched the application scenarios by a combination of various products such as granting liquidity loans and project loans, bond investments, and comprehensive credit to provide long-term and low-cost fi nancial support for various projects such as Tianjin garbage incineration and comprehensive treatment, coal-fired boiler refueling, construction and operation of high-effi ciency energy storage facilities, green development of the Convention and Exhibition Center, and ecological environment diversity protection The Head Office and the branch made concerted efforts to enhance the ability of professional guarantee services With the support of the Head Offi ce’s preferential policies for green credit projects, the Tianjin branch actively promoted the implementation of ESG risk management mechanism, incorporated environmental and social risk categorization investigation, examination and identifi cation into the approval process, supported 51 Environment 2024 ESG REPORT OF CHINA BOHAI BANK the incorporation of corporate carbon performance into the overall risk management and the development of green fi nance system, and encouraged the development of related industries such as clean energy, ecological protection and environmental governance Hong Kong Branch helped Canvest Environmental Protection’s green fi nance sustainable development On September 4, 2024, the Hong Kong Branch of the Bank successfully granted a bilateral loan of HK$80 million to Canvest Environmental Protection As a leader in the environmental protection fi eld, Canvest Environmental Protection had been an important customer of the Hong Kong Branch The branch provided professional advice and effi cient fi nancial support solutions for the company’s future capital needs and fi nancial planning At the same time, the Hong Kong Branch was awarded the “Excellence in Green and Sustainable Bank” for the fi rst time in the HKET Excellence Awards 2024 As the fi rst overseas branch of the Bank, the Hong Kong Branch had been closely following the national dual-carbon goals and the carbon neutrality roadmap formulated by the Hong Kong SAR Government, and, in line with a series of policies formulated by the Hong Kong Monetary Authority on climate risk management and the White Paper on Green and Sustainable Banking, provided more green fi nancial products, and helped promote enterprises to make greater contributions to the society and the economy Guiyang Branch strengthened protection and enhanced synergies to deepen green fi nance Leveraging local resources and market conditions in Guizhou, the Guiyang Branch of the Bank improved its green fi nancial service capabilities along the regional green development chain, focusing on the construction of water conservancy infrastructure The branch conducted in-depth research on state-owned enterprises in the water sector that integrate water supply, sewage treatment and water engineering construction The branch formulated precise credit plans based on enterprises’ business development model The credit plans were approved through the green channel and quickly responded to the enterprises’ demand for withdrawal, providing them with medium-term working capital loans of RMB100 million Changchun Branch ranked second in the joint stock group of Jilin Banking Financial Institution Green Finance Evaluation In May 2024, the People’s Bank of China Jilin Branch announced the results of the Jilin Banking Financial Institution Green Finance Evaluation for the fi rst quarter of 2024 Among the 146 fi nancial institutions in the province that participated in the evaluation, the Changchun Branch of the Bank ranked second in the joint stock group, achieving outstanding results 52 2024 ESG REPORT OF CHINA BOHAI BANK Environment Collaborative Synergy: Energy Conservation and Emission Reduction Gained Momentum The Bank made improvements in utilizing technological means and strengthening daily management Through enhanced energy management, water resources management and paper consumption management, as well as establishing and improving a green supply chain, the Bank continuously improved its green operations (I) Energy Management and Greenhouse Gas Emissions Management The Bank has taken various measures to conserve energy and reduce consumption for projects with the highest energy consumption during its operations For central air conditioning, public lighting, water supply and drinking water, the Bank utilized energy-saving facilities and equipment and strengthened daily management to save energy and reduce consumption In terms of greenhouse gas emissions, the Bank strictly complies with the relevant requirements of the Greenhouse Gas Emissions Management System formulated by the environmental protection department The Bank has also technically upgraded the combustion systems of the 4 gas-fi red boilers in the central air-conditioning heating system After the upgrade, the greenhouse gas emissions fully comply with the relevant requirements of the international standard ISO14064-2018 for greenhouse gas emissions The Bank has commissioned a professional institution to conduct 4 tests on the greenhouse gas emissions from the gas-fi red boilers each heating season The test results meet the regulatory requirements (II) Water Resource Management The Bank has adopted comprehensive measures in terms of technology and management to reduce water consumption First, the Bank has strengthened the inspection and maintenance of water supply system equipment, facilities and appliances to prevent water leakage or dripping Second, the bank reasonably controls the pressure range of the water supply system’s start-stop pump to effectively reduce the energy consumption of different types of pumps During the summer cooling period, the Bank regularly inspects and prepares the automatic water supply device for the air conditioning cooling tower to ensure normal function and timely water supply adjustment and avoid water waste Third, the Bank analyzes the water consumption records of the Head Offi ce building on a monthly basis and takes targeted measures to ensure that water is used as needed 53 Environment 2024 ESG REPORT OF CHINA BOHAI BANK (III) Paper Consumption Management The Bank has actively implemented the concept of green offi ce, continuously optimized the OA system and the Bohai on the Palm system, which further improved the green offi ce level and reduced paper consumption through technological empowerment By optimizing the meeting management module, the Bank has brought the entire meeting process online and improved management effi ciency The Bank also promotes “paperless meeting and offi ce” to reduce the printing of meeting materials In 2024, the total procurement of offi ce paper at the Head Offi ce was 5,072,000 sheets (IV) Green Procurement In line with the concept of green procurement, the Bank actively implements the concept of green and low carbon throughout the material procurement process, taking full account of environmental protection, resource conservation, safety, health, recycling, low carbon and recycling In 2024, the Bank continued to vigorously promote green procurement and increased suppliers’ environmental protection awareness by prioritizing green products in our procurement The Bank emphasizes its environmental protection requirements in procurement needs and stipulated quantitative indicators, such as the establishment of a green management system, clean production, safe production, the recycling and treatment of scrapped materials, green warehousing, packaging and logistics, in procurement initiation, pre-qualifi cation, tender evaluation methods, supplier qualification standards and contract terms, which encourages suppliers to actively establish systems such as ISO9001, ISO14001 and ISO18001 and reduce energy consumption and pollution in all aspect from production to sales Through the above measures, the Bank has established and continuously improved the green supply chain CASE Tianjin Branch further refi ned the management of printing supplies procurement The Tianjin Branch of the Bank implemented refi ned management measures for the procurement of printing supplies based on various data generated during the printing process to further reduce energy consumption at the offi ce The branch conducted data compilation and analyzed statistics of 61 brands and models of printers from 39 branches and 29 departments, collected 7,048 sets of data on the branch’s printing usage in 2023 and calculated the usage of consumables of each unit by category Base on the above data, the Bank determined the procurement needs of each unit Hong Kong Branch participated in the large-scale environmental protection activity “Earth Hour” Earth Hour is currently the world’s largest environmental protection activity and a shared commitment by citizens, groups, businesses and governments around the globe The spirit behind the event goes far beyond turning off the lights for one hour In support of this meaningful event, the Hong Kong Branch switched off non-essential lights in the offi ce and the spotlight of the outdoor billboard from 20:30 to 21:30 on March 23, 2024 Every employee of the branch and their family members was encouraged to support and participate in the one-hour lights-off event, contributing to environmental protection by making small changes in their life 54 Society Finance serves as an ever-flowing “lifeblood” that nourishes the real economy In 2024, the Bank proactively fulfilled its mission as a state-owned joint-stock bank Focusing on the “five priorities” as the cornerstone for high-quality financial development while regarding the “Three Upgrades” and “Three Points on Quantity and Quality” as important approaches, the Bank took concrete actions to fully support high-quality development, vigorously serve the real economy, and effectively promote social progress, turning these commitments into defining “keywords” of its operations 2024 ESG REPORT OF CHINA BOHAI BANK Society Targeted Support: Inclusive Finance Benefits People’s Livelihoods Small and micro enterprises serve as a vital force in economic development and the primary channel to provide employment, while agriculture, rural areas and farmers act as the “ballast stone” for social and economic stability The Bank is committed to building a unique inclusive finance service brand by developing four major inclusive finance product lines: “Chain Series, Digital Series, Fast Series and Tech Series ( 鏈系列、數系列、快系列、科系列 )”, to further enhance financial inclusivity and accessibility Focusing on regional distinctive industries, competitive industrial clusters, core supply chains and specialized industrial parks, the Bank continues to expand and improve financial services for small and micro enterprises It has iteratively upgraded its flagship product “CBHB Housing Loan ( 渤銀房閃貸 )”, advanced scenario-based ecosystem development with its “CBHB Commercial Loan ( 渤銀商戶貸 )” product, and provides tailored financial services and customized marketing solutions covering various sectors, including tourism, pharmaceuticals, catering, logistics, and agriculture, rural areas and farmers (I) Serving Small and Micro Enterprises In 2024, the Bank thoroughly implemented the national decision and deployment, strictly implemented regulatory policy requirements, and promoted the expansion, coverage, cost reduction and quality improvement to improve the quality and efficiency of financial services for small and micro enterprises Adhering to the development strategy of “doing real, doing small and doing well”, with the development philosophy of empowering “digital, platform, scenario and ecology” through technology, the Bank embedded inclusive financial services into various scenarios of production and operation of small and micro enterprises, explored the establishment of a new model for digital inclusive finance, and comprehensively facilitated the high-quality development of financial services for inclusive small and micro enterprises by developing four major inclusive finance product lines: “Chain Series (CBHB Chain E-Loan ( 渤銀鏈易貸 ) + Digital Series (CBHB Digital E-Loan ( 渤銀數 E 貸 ) + Fast Series (CBHB QuickPass ( 渤銀快捷通 ) + Tech Series (CBHB Tech E-Loan ( 渤銀科易貸 )” As of the end of 2024, the balance of inclusive loans of the Bank was RMB55,271 million, representing an increase of RMB3,800 million or 738% as compared with the beginning of the year; the number of inclusive loan accounts was 129,465, representing an increase of 13,800 or 1193% as compared with the beginning of the year; and the average loan execution rate was 432%, representing a decrease of 04 percentage point as compared with the beginning of the year 57 Society 2024 ESG REPORT OF CHINA BOHAI BANK Took the initiative to engage with small and micro enterprises, and focused on enhancing service precision in key sectors The Bank conducted in-depth research on industry and sector characteristics to provide targeted support for the high-quality development of advanced manufacturing, green manufacturing and smart manufacturing industries Aiming at the business domains of “two zones, two chains and one ecosystem”, and focusing on key customer groups such as core corporate supply chains, scenario-based ecosystems, technology innovation enterprises and platform-based enterprises, the Bank accelerated the digital development of inclusive finance The Bank continued to innovate and optimize its online products to switch its customer acquisition model from scattered orders to batch processing, switch its marketing model from passive to active, and switch its product model from offline to online, thereby improving the accessibility and quality of its financial services for small and micro enterprises Accelerated the iteration and innovation of key products, and greatly improved customer experience and satisfaction The Bank has developed an inclusive finance service brand with Bohai characteristics As the flagship product of the “Digital Series”, “CBHB Digital E-Loan ( 渤銀數 E 貸 )” is developed based on ecosystem and scenario-driven big data analytics and risk control logic, and features small-amount decentralization, batch processing and full digitalization, enabling scenario-based business output and customized combinations through intelligent, data-driven and scenario-adaptive design models The product adopts innovative business models such as channel traffic + scenario data + whitelist mechanisms to provide tailored financial services and customized marketing solutions for customers within specific scenarios Focusing on inclusive finance scenarios within the ecosystem and chain, and leveraging its channels to leading platforms and institutions, the guarantee-related platform business of the Bank expanded the customer base of inclusive financial services, extending from high-quality customers of traditional banking to long-tail customers with strong financial needs but limited access to services By harnessing financial technology innovations, the Bank has created convenient and efficient online collaborative products while optimizing its online processes and service experiences Meanwhile, the Bank continued to refine diverse credit models including “property mortgages, big data and strong guarantees” to enhance diversified financial services for the owners of small and micro enterprises as well as individual businesses Through comprehensive applications of technological means, such as big data analytics, advanced machine learning and biometric identification, the Bank improved automated decision-making efficiency and optimized credit approval models, achieving targeted support and high-efficiency services for the owners of small and micro enterprises as well as individual businesses In 58 2024 ESG REPORT OF CHINA BOHAI BANK Society compliance with the Notice on Improving Financial Services for Small and Micro Enterprises through Loan Renewals from the National Financial Regulatory Administration, the Bank strengthened loan renewals to support its existing customers, further optimized loan renewal product features, and offered greater support for loan renewals, so as to effectively alleviate the short-term pressures on operational liquidity for small, medium and micro enterprises CASE Small bills served the big real economy In the fi rst quarter of 2024, as one of the “fi rst batch” of pilot fi nancial institutions designated by the Shanghai Commercial Paper Exchange, the Bank has consistently strengthened its credit support for the real economy through the bill business upon its successful launch of the new-generation bill business system and products in 2022, which enhanced the inclusiveness and applicability of fi nancial services across industrial chains Improved services to the real economy with bill innovation The new-generation bills break the long-standing constraints of fi xed-amount commercial drafts by introducing divisible and transferable features to accelerate the transformation of the bill business, which encourages embedding bills within corporate supply chains and promotes the conversion of accounts receivable into bills, while signifi cantly reducing corporate fi nancing costs and facilitating cost-free circulation of bills Built on the new-generation bill business system, the new-generation bills of China Bohai Bank adopt a customer-centric design with redesigned and optimized services featuring 24/7 online contracting for enhanced customer experience, automated workfl ows that intelligently link issuance and pricing details to applications, simplifying processes and eliminating manual form fi lling, and fl exible bill solutions accommodating partial payments, urgent cash needs or maturity collections for enterprises, allowing enterprises to split and use bills as needed with one click Furthermore, the new-generation bill business system of China Bohai Bank supports services covering the entire process including issuance, acceptance, discounting, endorsement, receipt and pledge, with the options for batch processing and appointment making for various transactions It has also added a groundbreaking feature which allows bill holders’ self-service conversion of “non-transferable” bills to “transferable” bills and a function to revoke the non-transferable status of bills to help enterprises make one-click changes These six 59 Society 2024 ESG REPORT OF CHINA BOHAI BANK distinctive features not only address multiple pain points of in the use of corporate bills, but also improve user experiences across the entire bill lifecycle, reduce operational risks, and further enhance the capability of bills in serving the real economy and small and micro enterprises The Bank actively responded to the “call to accelerate the connection and promotion of China’s bill business system” in the bill market by allocating infrastructure and system resources to speed up bill conversion As of now, the conversion rate of the new-generation bills of the Bank has reached 9822% Boosted the vitality of the private sector with fl exible and targeted services Hebei Province, a traditional manufacturing powerhouse, has been accelerating the development of industrial clusters such as next-generation information technology and high-end equipment manufacturing These efforts have propelled sectors including biopharmaceuticals, next-generation information technology, new energy vehicles and intelligent connected vehicles to become the fi rst batch of industrial clusters achieving over RMB100 billion in revenue Anchored by its Shijiazhuang Branch and aligned with Hebei’s industrial landscape, China Bohai Bank focuses on both traditional sectors (eg, steel, coal) and emerging markets (eg, pharmaceuticals, electronics) Leveraging the advantages of low barriers, high effi ciency and competitive rates in bill fi nancing, the Bank supports quality and effi ciency improvement of core supply chains and industrial chains as well as industrial upgrading in Hebei Province In early 2024, China Bohai Bank executed its inaugural new commercial bill discount guarantee facility for a major construction company in Shijiazhuang, which addressed the company’s challenge of being unable to utilize substantial standby credit lines across multiple banks due to mismatched business needs Granting credit to the construction company and extending financing to 27 upstream suppliers, this breakthrough transaction achieved cross-tier credit transmission within the supply chain Thanks to the fl exibility in the settlement of the new-generation bills of the Bank, a Tangshan-based equipment manufacturer gained funding fl exibility by splitting bills according to its funding needs Taking a RMB5 million bill as an example, if only RMB1 million is required for a single payment, the bill can be split and paid with a RMB1 million bill under the new-generation bill system, saving nearly RMB70,000 in discount interest compared to the traditional approach of discounting RMB5 million in full before making cash payments The new-generation bill business system resolves long-standing constraints in the development of the bill market, thereby laying a solid foundation for a new development pattern of the bill market in the new era 60 2024 ESG REPORT OF CHINA BOHAI BANK Society CASE Changsha Branch thoroughly implemented the “Together for Enterprises” initiative In accordance with the work requirements of the Hunan Office of the National Financial Regulatory Administration, the Changsha Branch of the Bank has fully deployed and carried out the “Together for Enterprises” initiative Through the intensifi ed promotion of inclusive fi nance policies and products, as well as deepened engagement with market entities and the public, the branch has taken concrete actions to support the development of small, medium and micro enterprises First, the branch promoted inclusive finance policies through diverse channels Since the launch of the “Together for Enterprises” initiative, the Changsha Branch has employed various publicity methods to create strong publicity momentum and enhance the initiative’s influence: disseminated financial knowledge and public-benefi t policies via WeChat offi cial accounts, branch promotions and on-site presentations to guide market entities and the public in identifying and selecting formal fi nancial channels, hosted product seminars and distributed fi nancial product brochures, and fi led its inclusive fi nance products with the “Hui Xiang Rong ( 惠湘融 )” one-stop query platform for inclusive fi nancial services Second, the branch strengthened service initiative and provided targeted financial services for small, medium and micro enterprises by organizing diverse engagement activities: visited Hunan Small and Medium Enterprises Financing Guarantee Co, Ltd, Hunan Technology Financing Guarantee Co, Ltd, Hunan Xiangyin Financing Guarantee Co, Ltd and other companies to discuss collaborative promotion and implementation of inclusive fi nance products and services Under the “Together for Enterprises” initiative, the Changsha Branch organized 7 financing matchmaking events, provided bank-enterprise matchmaking, loan guarantees, credit evaluations, fi nancing roadshows and other services to 1,499 small, medium and micro enterprises, and extended loans totaling RMB5,4690182 million to 542 small, medium and micro enterprises within the province These efforts demonstrate the branch’s commitment to innovating inclusive fi nance products, optimizing fi nancial service experiences and fulfi lling its mission to meet the fi nancial needs of small, medium and micro enterprises (II) Promoting Rural Revitalization In 2024, the Bank strictly implemented the directives outlined in the Opinions of the Central Committee of the Communist Party of China and the State Council on Learning and Applying the Experience of the “Thousand Villages Demonstration and Ten Thousand Villages Renovation” Project to Effectively Promote Comprehensive Rural Revitalization (《中共中央國務院關於學習運用「千村示範、萬村整治」工程經驗有力有效推進鄉村全面振興的意見》) and the requirements set forth in the Notice on Launching a Special Action to Strengthen Financial Support for Comprehensive Rural Revitalization by Learning and Applying the Experience of the “Thousand–Ten Thousand Project” 61 Society 2024 ESG REPORT OF CHINA BOHAI BANK issued by the People’s Bank of China, the National Financial Regulatory Administration, the China Securities Regulatory Commission, the Ministry of Finance, and the Ministry of Agriculture and Rural Affairs (《中國人民銀行金融監管總局中國證監會財政部農業農村部關於開展學習運用「千萬工程」經驗加強金融支持鄉村全面振興專項行動的通知》), which continuously improved the quality and effi ciency of rural fi nancial services, and supported the comprehensive promotion of rural revitalization and the construction of an agricultural power with Chinese characteristics The guarantee-related platform business of the Bank actively collaborated with leading platforms and institutions While strictly adhering to regulatory requirements and autonomous risk control principles, both parties leveraged the proprietary platform data and third-party data to establish pre-screening models, anti-fraud models and credit evaluation models, thereby actively providing fi nancial services to farmers The “Bohai Farmer Loan ( 渤農貸 )” program under the cooperation between the Changchun Branch and Jilin Financial Holdings Group has effectively addressed the “last mile” challenge in rural fi nance As of the end of 2024, the Bank’s agriculture-related loan balance amounted to RMB45,740 million, representing an increase of RMB9,966 million or 279% as compared with the beginning of the year The inclusive agriculture-related loan balance amounted to RMB4,324 million, representing an increase of RMB611 million or 1646% as compared with the beginning of the year The loan balance in regions that have been lifted out of poverty reached RMB11,726 million, representing an increase of RMB3,516 million or 4283% as compared with the beginning of the year Throughout the year, the Bank invested RMB39,740 million in rural revitalization bonds, representing an increase of RMB15,054 million or 6098% as compared to 2023 The Bank underwrote rural revitalization bonds amounting to RMB38,850 million, granted agriculture-related M&A loans of RMB952 million, and granted agriculture-related syndicated loans of RMB2,948 million The number of newly issued rural revitalization-themed cards throughout the year reached 2,799, with the number of existing cards growing by 5159% as compared with the beginning of the year CASE Hohhot Branch supported financial assistance in key regions of rural revitalization The Hohhot Branch of the Bank leveraged the role of financial services in supporting the real economy to promote economic growth and sustainable development in key regions of rural revitalization such as Chayouzhong Banner and Chayouhou Banner in Inner Mongolia Autonomous Region, based on the actual conditions of these regions First, the branch provided tailored support for the local oat industry in the “Two Banners” Focusing on the oat processing sector as a regional specialty, the branch increased credit support for an inclusive small and micro enterprise in Chayouzhong Banner and granted inclusive loans totaling RMB10 million for production and operational purposes, providing substantial support for regional industrial development Second, the 62 2024 ESG REPORT OF CHINA BOHAI BANK Society branch optimized the portfolio of inclusive products By expanding customer acquisition upstream from core enterprises, the branch achieved rapid loan approval and disbursement within minimal timeframe, including RMB10 million in reverse factoring facilities for upstream inclusive suppliers and RMB50 million in working capital loans of a food processing company, which effectively promoted the growth of the local characteristic potato industry (III) Securing Benefi ts of Finance to People’s Livelihoods The Bank entered into a comprehensive strategic cooperation framework agreement with the Tianjin Municipal Civil Affairs Bureau to fully leverage fi nancial instruments in addressing the fi nancial needs of the civil affairs sector, and entered into a preferential military service cooperation agreement with the Tianjin Veterans Affairs Bureau to provide fi nancial support, vocational training and other preferential services for active military personnel, their families, veterans and other entitled groups In partnership with Tianjin Energy Group, the Bank successfully implemented three phases of public convenience and benefit campaign for advance payment of heating fees, jointly serving people’s livelihoods Its collaboration with the Tianjin branch of UnionPay continued while launching a “60% off bus rides” promotion campaign by combining their mutual benefi ts The Bank cooperated with Tianjin We Doctor Group in credit support, medical insurance payments and fund clearing, offering multi-dimensional fi nancial services for the Tianjin Municipal People’s Government in building a primary digital “health service community” in Tianjin The Bank served as the title sponsor of the 2024 Tianjin (International) Elderly Services Expo, supporting the upgrade of elderly services through elderly product exhibitions, resource matchmaking events, summit forums and other forms of activities Furthermore, the Bank has long-term commitments to Tianjin’s sports development As a steadfast supporter of the Tianjin Women’s Volleyball Club, the Bank has insisted on growing and moving forward hand in hand with the volleyball club for 12 consecutive years To enhance the wealth management experience for individual customers, the Bank has continuously optimized its online channels by enriching the “Boyin E-Finance” product spectrum with innovations including USD time deposits, night markets, pensions and other distinctive wealth management products, alongside introducing short-term wealth management products with good market performance and competitiveness The Bank expanded its physical precious metals offerings with 11 new products, including Lunar New Year’s lucky gold, cultural-themed gold bars and “Treasure Basin” collections while making multiple upgrades in mobile banking to enhance the convenience of online transactions, inquiries or one-stop services For example, its retail deposits now include features such as time deposit + scheduled deposits and partial transfer of large-denomination certifi cates of deposit Its fund distribution service launched a “New Issue Zone” and introduced a multi-trading account model for funds Its trust distribution service optimized functions such as online qualifi ed investor authentication, traceability, product redemption and electronic signatures as well as interface displays Its insurance trust services achieved full online processing, which effectively advanced the standardization of business operations 63 Society 2024 ESG REPORT OF CHINA BOHAI BANK CASE The Bank entered into a strategic cooperation agreement with the Tianjin Commission of Commerce to support the construction of an international consumption center city On July 5, 2024, the Bank entered into a strategic cooperation agreement with the Tianjin Commission of Commerce to support the construction of an international consumption center city Both parties will strengthen collaboration in key areas such as promoting sustained consumption growth, upgrading commercial districts, innovating consumption scenarios, and building a modern commercial and trade circulation system They will implement practical and effective measures to enhance the precision and effectiveness of fi nancial services, and better meet the fi nancing needs across all aspects of consumption and circulation The Bank will leverage its product and fi nancial service advantages to actively support various initiatives in commercial and trade circulation, providing convenient and preferential financial services to enterprises and individual business owners CBHB Wealth Management refined its product offerings with a craftsman’s spirit CBHB Wealth Management remains committed to its strategic vision of becoming “the most trusted asset management institution offering the best experience” Under the principle of “CBHB Wealth Management, Where Trust Gathers”, CBHB Wealth Management named its nine major product lines as follows: “Botai Secure ( 渤泰有依 )”, “Wise Save ( 銀儲有道 )”, “Wealth Pro ( 理財有術 )”, “Yield Plus ( 財收有略 )”, “Hold Strong ( 為持有方 )”, “Smart Choice ( 信睿有選 )”, “Ascend Excellence ( 任達有升 )”, “Gain Strategy ( 匯盈有策 )” and “Profi t Hub ( 聚利有得 )” These product lines cover a full spectrum of asset classes, including cash management, bonds, non-standard assets, equities and derivatives, providing customers with comprehensive investment options Moreover, CBHB Wealth Management continued to enhance its high-quality wealth management fi nancial services in key strategic areas, critical sectors and underserved segments It further 64 2024 ESG REPORT OF CHINA BOHAI BANK Society enriched its product offerings, diligently implemented the “fi ve priorities” and upheld its positioning in inclusive fi nance while actively expanding green and ESG-themed wealth management products For example, CBHB Wealth Management launched a green finance-themed product, “CBHB Wealth Management Yield Plus Series Fixed-Income (Green Finance Theme) 6-Month Closed-End Wealth Management Product”, to increase support for green fi nance This initiative injects green momentum into the wealth appreciation of customers, shapes a distinctive brand image and creates a strong impetus for sustained investor recognition CBHB Wealth Management prioritizes customer needs in creating high-quality products Its product system is anchored by low-to-medium-risk fi xed-income offerings, forming a comprehensive product line strategy It introduced three fi xed-income series, “Wise Save ( 銀儲有道 )”, “Wealth Pro ( 理財有術 )” and “Yield Plus ( 財收有略 )”, alongside innovative specialty series Staying true to its positioning of “steady and reliable” wealth management, CBHB Wealth Management’s closed-end fi xed-income products have delivered outstanding performance in both yield delivery and fulfi llment rates, providing investors with stable returns 65 Society 2024 ESG REPORT OF CHINA BOHAI BANK CASE Shijiazhuang Branch actively supported the healthcare sector On November 5, 2024, the Shijiazhuang Branch of the Bank granted a short-term working capital loan of RMB1187 million to Tangshan Central Hospital to support the further enhancement of its patient treatment capacity As a major livelihood project in the healthcare fi eld initiated by the Tangshan Municipal People’s Government, Tangshan Central Hospital is a modern large-scale general hospital with considerable size and infl uence Nanchang Branch continued to enhance the quality of payment services Being committed to the original aspiration of “serving the people through payment services”, the Nanchang Branch of the Bank persistently optimized the payment acceptance environment, comprehensively improved payment convenience, and steadily advanced the optimization of payment services through multiple proactive measures First, the branch expanded the coverage of cash services It actively promoted “small change wallet” exchange services and offered “small change wallet” customized services to ensure immediate conversion upon request, and introduced standardized and diversified “small change wallet” products to merchants Second, the branch continued to improve customer convenience facilities It places peak passenger fl ow signs in eye-catching locations at its outlets to remind customers to arrange their time reasonably and effectively save waiting time Third, the branch strengthened its services for the elderly in halls It catered to the needs of the elderly by providing convenient payment solutions for the elderly For those who are unable to visit the branch due to mobility issues or other special circumstances, door-to-door services will be provided in a timely manner to meet their fi nancial needs Fourth, the branch organized branch-wide self-assessments on key areas, including service guides, priority channels, foreign card indicators on self- service terminals, promotional content on digital displays, and complaint hotlines Surprise checks have also been conducted to evaluate staff proficiency in payment service protocols Fifth, the branch mobilized its business units to actively engage with local business districts through diverse publicity campaigns to enhance awareness and effectiveness of optimized payment services Tianjin Branch supported the 5th Tianjin Night Festival On August 2, 2024, Tianjin launched the “Tianjin Night with You · 5th Tianjin Night Festival” at the Zhihuishan Block in Binhai High-Tech Area As a strategic partner of the festival this year, the Tianjin Branch of the Bank played a signifi cant supporting role For this night event, the branch introduced products such as the “Haihe Loan ( 海河貸 )” to boost consumption upgrade To boost the economic vitality of the business district, the branch also actively served surrounding merchants and enterprises by organizing diverse collaborative marketing campaigns Combining merchant benefi ts with banking privileges, the branch created distinctive, high-quality “fi nance + lifestyle” scenarios, injecting new energy and momentum into Tianjin’s consumer market 66 2024 ESG REPORT OF CHINA BOHAI BANK Society Aged Care: Pension Finance Delivers Results The Bank upholds the political commitment, people-centered philosophy and professional excellence in financial services It actively fulfi lls its leading role as an elderly care fi nancial institution in building the third pillar of China’s elderly care system, while supporting the high-quality development of the silver economy The Bank is dedicated to enhancing the sense of security, fulfi llment and happiness in retirement life, striving to realize the vision of “ensuring elders are well-supported, well-cared for, and able to enjoy their golden years” The Bank actively addresses elderly care needs in the society and promotes the development of a multi-tiered elderly care security system It has established a service system for pension fi nance characterized by “one card, one product suite, one service system, one professional team, and lifelong companionship” The system is built around the pension- themed debit card “Botai Card” and supported by the “Boyin E-Finance” pension product service system, which includes pension savings, pension wealth management, pension funds, pension insurance and pension trusts To enhance its professional service capabilities, the Bank has cultivated a team of certifi ed retirement fi nancial planners who design customized pension solutions tailored to the life stages and retirement needs of customers The Bank provides “whole- life-cycle, full-relationship-spectrum, omni-channel accessible and fully-customized concierge services” to the elderly customers For improved payment convenience for elderly customers, the Bank has upgraded an exclusive senior- friendly version of its mobile banking app The “Elder Mode” features universally enlarged font display Functions frequently used by elderly customers such as account inquiry, transfers, deposits and wealth management can be directly accessed with one click Both manual customer service and AI digital assistants are available to address the problem of convenient use of online channels for elderly customers The Remote Banking Center has been making continuous efforts to enhance its “call-in services” for pension fi nance First, the center launched the 95541 “Senior Care Hotline”, which utilizes big data and intelligent recognition technology to automatically and accurately identify customers Registered telephone banking customers aged 60 and above may bypass voice menus and button operations when calling the 95541 hotline, enjoying “one-click direct access” to manual customer service for a premium experience anytime, anywhere Second, the center promoted standardized and consistent customer service Its online customer service has established a repository of service scripts and instructional materials to standardize external service protocols, improve effi ciency and strictly ensure service quality Third, the center 67 Society 2024 ESG REPORT OF CHINA BOHAI BANK designated expert representatives to provide high-quality service to elderly customers For reasonable requests from elderly customers, priority is given to emotional reassurance and timely documentation and feedback, with no tolerance for evasion or perfunctory responses Service suggestions from elderly customers are actively evaluated and analyzed to continuously optimize service processes CASE The Bank partnered with Tianjin Elderly Expo to promote holistic development of elderly care services From October 25 to 28, 2024, the Bank served as the title sponsor of the 2024 Tianjin (International) Elderly Services Expo Centered on the theme of “Celebrating the Double Ninth Festival”, the expo focused on serving the elderly in the new era through elderly product exhibitions, resource matchmaking events, summit forums and other activities It addressed critical pain points of the elderly group such as senior consumption, age-appropriate products and pension fi nancial services, providing “one-stop” comprehensive solutions for elderly customers As one of the first batch of commercial banks qualified to offer personal pension services, the Bank commenced pension fi nance relatively early Leveraging its comprehensive advantages in personal fi nance, the Bank has actively established a pension fi nance service ecosystem integrating elderly care services and elderly care industries, and the silver economy to meet the new needs of differentiated, multi-level and high- quality modern Chinese-style elderly care Distinctive fi nancial inclusion initiatives To better provide elderly customers with high-quality, cost-effective, value-added and secure fi nancial services, the Bank introduced innovative service methods and offered elderly consumers with convenient and user- friendly service experience by bringing its banking hall on-site during the expo Visitors aged 50 and above could apply for the pension-themed debit card “Botai Card” there, which features enhanced security measures including a newly added “online payment lock” function in addition to the original six major categories of “debit card transaction security locks” The elderly customers may easily enable or disable online payment transactions with one click at any time, eliminating their concerns about online payment risks and further enhancing the experience, gain and security of fi nancial services for elderly customers Warmhearted retirement planning solutions Building on its professional retirement planning services, the Bank has developed the comprehensive “Boyin E-Finance” pension product and service system The system offers steady fi xed-income products represented by pension-specifi c savings and pension-specifi c wealth management to meet the customers’ needs for stable value-added pension funds, a curated selection of pension funds including target-risk and target-date options 68 2024 ESG REPORT OF CHINA BOHAI BANK Society to cater to various age groups and risk appetites, the “Enjoy Bohai” family trust series and insurance trust services with customized functions for retirement planning on the basis of investment, and exclusive pension insurance products to deliver both investment growth and stable cash fl ow for retirement life During the expo, the Bank entered into a comprehensive strategic cooperation framework agreement with the Tianjin Municipal Civil Affairs Bureau to establish an innovative “bank-government-enterprise” collaboration model, leverage fi nancial instruments, optimize the business environment according to the fi nancial needs of the civil service sector in Tianjin, and make civil service services compatible with economic and social development and support the continued progress as a modern metropolitan city CASE Nanjing Branch continued to enhance elderly assistance services The Nanjing Branch of the Bank has developed a meticulous and tailored service program for elderly customers to improve the fi nancial services for elderly customers and ensure they receive secure, convenient and thoughtful banking services First, the branch focused on improving the level of smart services for the elderly It leveraged smart technology to improve fi nancial services for elderly customers at its outlets Second, the branch effectively enhanced the in-branch experience for elderly customers It strengthened supervision and management of the services for the elderly customer group, including lobby waiting, communication support, reminders, self-service machine operation guidance and transaction assistance Recognizing the unique needs and capabilities of elderly customers, the branch adopted a two-pronged approach consisting of traditional service methods and smart services to continuously improve the experience of elderly customers visiting the outlets Third, the branch upgraded its physical facilities by equipping with essential amenities such as reading glasses, magnifi ers, wheelchairs, walking sticks and fi rst-aid kits At outlets serving a large number of elderly customers, additional improvements have been made based on the actual situation of the outlets, including more seating, enlarged signage and senior-friendly reading materials, all contributing to better service quality for elderly customers Fourth, the branch carried out targeted education and guidance It conducted public welfare education activities and gave mini financial sessions in the banking hall when the elderly customers are waiting for handling transactions These sessions cover topics such as preventing telecom fraud, regulatory risk alerts, and general financial knowledge, further establishing the outlets as important offl ine hubs for elderly customers to access fi nancial knowledge and public welfare Fifth, the branch adapted its service models to elderly needs and provided door-to-door services for the elderly The bank hall ambassadors provided patient guidance for the elderly who are unfamiliar with smartphones or VCRs to handle transactions, conducted public welfare lectures, and offered hands-on tutorials for mobile banking For those who are unable to visit the outlets to handle transactions due to physical constraints, door-to-door services have been provided under the premise of compliance 69 Society 2024 ESG REPORT OF CHINA BOHAI BANK Innovation-Driven: Technology Finance Provides Strong Support Technology is the primary productive force, igniting the “engine” of new quality productive forces The Bank focuses on serving technology innovation enterprises, adheres to the advantages of “specialization”, the concept of “refinement”, “special” responsibilities, and “personalized” soul The Bank systematically focuses on aspects such as industry research, regional layout, channel construction, product innovation and digital empowerment, continuously improving the system and mechanism of technology financial services The Bank strengthens finance supply that best suit its needs and circumstances, gives full play to the “CBHB Technology Innovation” comprehensive service system, prioritizes the implementation of the “CBHB Technology Express Loan ( 渤銀科速貸 )” service, provides financial services for technology enterprises such as national “small giants” using specialized and sophisticated technologies to produce novel and unique products, and promotes the development of new quality productive forces As of the end of 2024, the Bank’s balance of loans to technology enterprises amounted to RMB45,878 million, representing an increase of RMB3,792 million or 901% as compared to the beginning of the year The number of technology enterprise loan accounts was 1,258, representing an increase of 333 accounts or 3600% as compared to the beginning of the year In terms of system establishment, the Bank has continuously improved its systems related to technology finance The Bank has successively issued the Notice of China Bohai Bank on Promoting the High-Quality Development of Technology Finance and the Implementation Plan of China Bohai Bank for Promoting the High-Quality Development of Technology Finance In terms of products and services, first, innovative financial services promoted the development of technology enterprises In 2024, the Bank successively launched technological innovation products, such as the CBHB Technology Express Loan ( 渤銀科速貸 ), Binhai Hi-Tech Zone Point Loan ( 濱海高新區積分貸 ) and intellectual property pledge loan The “CBHB Technology Express Loan ( 渤銀科速貸 )” replaces the “capital flow” credit model with the “technology flow” evaluation to provide preferential funds for enterprises using specialized and sophisticated technologies to produce novel and unique products Incorporating into the innovative point system of Tianjin Binhai New Area, the point loan provides credit support for high-tech enterprises The Bank actively promoted online products to improve service efficiency while promoting technology innovation and enterprise development Second, the Bank optimized the investment process for technology innovation bonds and provided comprehensive financial services for technology innovation enterprises The Bank optimized the investment decision-making process for investment in technology innovation corporate bonds, increased the investment in technology innovation bonds, and established long-term cooperative relationships with enterprises to improve customer stickiness and the sustainability of business development Third, the Bank replenished its product offering with technology innovation finance products CBHB Wealth Management launched a technology innovation wealth management product in December 2024, “6-Month Wealth Management (Technology Innovation) 70 2024 ESG REPORT OF CHINA BOHAI BANK Society for 2024 No 83”, with proceeds raised of RMB50 million, achieving a breakthrough in technology innovation products Fourth, China Bohai Bank created distinctive products under its technology fi nance brand Leveraging the early and small investment characteristics of technology fi nance enterprises, the Bank gave full play to its resource advantages, and provided fi nancing services with greater convenience for enterprises through investment and loan collaboration CASE China Bohai Bank started a new chapter in technology fi nance The BanThe Bank treated fi nance-empowered technology enterprises at priority, as a key breakthrough for supporting and serving the real economy, and a starting point for its own high-quality transformation and developmentk treated finance-empowered technology enterprises at priority, as a key breakthrough for supporting and serving the real economy, and a starting point for its own high-quality transformation and development Product innovation to enrich technology fi nancial services The Bank has continuously strengthened its focus on technology enterprises To ensure the depth and breadth of its financial services, the Bank has continuously improved its financial service system and mechanism and provided “full-cycle, comprehensive, all-rounded” professional fi nancial services to technology enterprises The Bank has established the “CBHB Technology Innovation” comprehensive service system for enterprises in different stages from start-up, growing to mature The Bank has developed fi nancial services covering the entire life cycle, all scenarios and the entire industry chain of technology enterprises, ensuring the rapid growth of technology enterprises The Bank focused on national technology innovation demonstration enterprises, enterprises leading an individual fi eld of the manufacturing industry, and enterprises using specialized and sophisticated technologies to produce novel and unique products In view of their profound expertise, light assets, low collateral, high growth rate and high risk, where traditional credit products lack matching and support, the Bank launched an innovative and specialized technology fi nance product with special characteristics - Technology Express Loan, which comprehensively evaluates technology enterprises based on information from the “technology fl ow” dimension, such as intellectual property rights, research and development investment, market position, management team and capital operations, so as to provide more precise financial support for technology enterprises with innovative capabilities and growth potential, with fast and effi cient approval For instance, there is a technology enterprise in Shanghai focuses on the innovative research and development of cognitive 71 Society 2024 ESG REPORT OF CHINA BOHAI BANK intelligent robots, and has independent intellectual property rights, proprietary technologies and advanced knowledge, with more than 400 independent patents It has been rated as a national “small giant” using specialized and sophisticated technologies to produce novel and unique products In 2024, the enterprise had strong fi nancing needs The Bank provided proactive services and quickly completed the entire process from application to loan disbursement through the “CBHB Technology Express Loan (渤銀科速貸 )” to meet the enterprise’s capital needs Focus on the main business line and spare no effort to support the development of technology enterprises In recent years, the Bank has carried out various benefi cial practices in the technology fi nancing sector By actively listening to the needs and diffi culties of technology enterprises, the Bank provided fi nancial support at critical moments, stimulated innovation in the technology industry with fi nancial strength, and injected new vitality and momentum into the high-quality development of the local economy While products such as “CBHB Technology Express Loan ( 渤銀科速貸 )” and “Talent Loan ( 人才貸 )” have enriched the full-cycle services and products of technology innovation enterprises, the Bank has also established synergistic internal and external ecological service bridges through investment and loan collaboration with industry funds and venture capital funds The Bank focused on the innovation and entrepreneurship needs of technology enterprises and top talents in the Tianjin Tiankai Hi-Tech Innovation Park, namely “Tiankai Park”, and advanced the fi nancial service window to provide “close” fi nancial services The Bank also injected fi nancial vitality to cultivate new talents and activated industry-education-research collaboration to plan and generate new development momentum For instance, there is a company engaging in industry and education integration, which has been growing and developing along with Tiankai Park, at its early development stage, and is focusing on energy storage control, battery operation and maintenance technology transformation and product introduction in the fi elds of special power supply, energy storage and new energy power generation The Bank accompanied the customer as it incubates and grows, took the initiative to pay visits to gain a comprehensive understanding of its “soft power” in technology innovation In cooperation with Haihe Industrial Fund, Haitang Fund and the Technology Innovation Angel Fund, the Bank formulated a fi nancing plan for the customer through investment and loan collaboration, and promoted technology innovation and the transformation of achievements At the same time, the Bank provided the customer with a wide range of comprehensive fi nancial services, such as online corporate banking, the CBHB E-Salary, an intelligent platform for corporate human resources and fi nancial management platform, agency payment and corporate wealth management 72 2024 ESG REPORT OF CHINA BOHAI BANK Society CASE Shanghai Pilot Free Trade Zone Branch successfully supported the fi rst smart car AI chip company for its listing in Hong Kong On August 8, 2024, the fi rst smart car AI chip company offi cially listed on the Hong Kong Stock Exchange, with a market value of over HK$12 billion The Shanghai Pilot Free Trade Zone Branch of the Bank is one of its principal bankers The branch has been steadily promoting the “Ten Actions” for high-quality development, focusing on the national “technology innovation” strategy and the Head Office’s “thousand households” policy, and targeting industry leaders in fi elds such as new energy, automobiles and high-end manufacturing Under the guidance of the Head Offi ce’s Investment Banking Department, the branch has launched a special syndicated loan initiative to actively support the development of high-tech enterprises Suzhou Branch received a thank-you banner from a technology innovation enterprise customer On January 9, 2024, the Suzhou Branch of the Bank received a banner, with a message of “Serving Enterprises with Caring Services, Creating Bright Future with Diligent Works” on it, from Zhongke Fusion Perception and Intelligence Research Institute Co, Ltd to express its gratitude for the effi cient services and strong support provided by the branch At the end of 2023, the company obtained a nursery loan of RMB10 million from the Bank and withdrew RMB5 million, effectively alleviating the fi nancial pressure of its operations Founded in October 2018 and incubated at the Suzhou Institute of Nano-Tech of the Chinese Academy of Sciences, Zhongke Fusion is the only enterprise in China that can independently research and develop “MEMS chips + SOC chips + core algorithms” and offer complete AI+3D chips and module products The company’s management has extensive industry experience, and is led by a “dream team” of overseas returned semi- conductor chip experts and experienced Chinese industry experts Our Shanghai Branch entered into a strategic cooperation agreement with Huangpu Technology Innovation Group Co, Ltd 73 Society 2024 ESG REPORT OF CHINA BOHAI BANK Digital Empowerment: Digital Finance Accelerates Transformation The Bank formulated and implemented an implementation plan to promote the high-quality development of digital fi nance, acting as a guide for digital fi nance and digital transformation The Bank strengthened digital empowerment in key areas and created “digital series” online products The Bank has continuously promoted the construction of key enterprise-level projects such as the next-generation distributed core system and counter channel system, and completed the commissioning of key systems such as the FRTB sub-system and the second-generation data warehouse, laying a solid foundation for the digital infrastructure On December 26, 2024, the Bank offi cially launched Mobile Banking 70, taking a new step in the fi eld of digital fi nance Mobile Banking 70 is centered on the three strategic positions and development models of account banking, wealth banking and ecological banking in the retail business It continuously deepens the “fi nance + life” dual service model, accelerates the transformation from channel construction to digital operation, and comprehensively upgrades in terms of intelligent services, wealth management, ecological scenarios, and customer experience First, the Bank has innovated the intelligent housekeeper services to create a brand new family financial service system Second, the Bank has established a comprehensive wealth management service to meet the asset allocation needs of customers Third, the Bank has enriched the ecology of community business circles and enhanced customers’ livelihoods with financing Fourth, the Bank has focused on improving the customer experience so that customers can enjoy convenient services throughout the process CASE Digital finance as the engine for steady and sustainable high-quality development The Bank continued to deepen its efforts in the field of digital finance and vigorously promote digital transformation to lay a solid technological foundation for high-quality development 74 2024 ESG REPORT OF CHINA BOHAI BANK Society Strategic planning: Charting the course toward the digital blue ocean To effectively promote digital finance practices and ensure the smooth execution of digital transformation strategies, the Bank integrated digital transformation and digital finance under a unified management framework, and upgraded its digital transformation organizational structure by establishing a digital fi nance leadership group, supported by specialized working teams, to push forward key transformation initiatives across the Bank The Bank has meticulously formulated the Implementation Plan for Promoting High-Quality Digital Finance Development of China Bohai Bank, which defi nes its digital transformation strategies with clear objectives, pathways and methodologies The digital transformation strategies of the Bank are systematically advanced through four major enterprise-level projects: the new-generation distributed core system and counter channel system, the new-generation credit risk management platform, the new-generation Integrated Funds Business Management System and the Data Lake-Warehouse Integrated System The four major enterprise-level projects strengthened the digital operations across the Bank The Bank continued to enhance data management capabilities, reinforce the role of data empowerment, deepen data governance and unleash data value in the long term, so that all business segments and lines of the Bank may use data freely and securely and share data clearly and cleanly, thereby maximizing the effectiveness of data application and supporting the transformation of data-empowered operations Implementation focus: Setting sail with technology integration and innovation The Bank deepened self-reliant capability building and promoted technological innovation leadership Through cloud computing, artifi cial intelligence, blockchain and big data technologies, the Bank continued to enhance its independent control over key core technologies, and empowered business development and product innovation through the dual engines of digital technology and data elements The Bank intended to build up systems for large models and digitalize intelligent risk management reports for retail operation At the same time, the Bank promoted application scenarios such as Q&A Assistant, and facilitated the development of digital productivity and intelligent upgrades with the use of large model technology The Bank enhanced operation and maintenance management capabilities, and achieved an excellent rating in data center service maturity certifi cation To promote the transformation of IT infrastructure, the Bank completed the deployment and operation of the basic cloud platform under the Data Lake-Warehouse Integrated System and the second-generation data warehouse, continuously unleashing platform technical capabilities At the same time, it completed the construction of, and offi cially operated, the third data center in the same city The Bank also continued to improve the level of refi ned operation and maintenance management, reinforced the safety foundation of production operations, and ensured the safe and stable information system operation 75 Society 2024 ESG REPORT OF CHINA BOHAI BANK Team building: Cultivating a professional and effi cient crew The Bank continued to optimize its technology talent system, and strengthened the cultivation and reserve of supporting technology talents Centering on the “Talent Pool Construction” initiative, the Bank focused on improving its independent research capabilities, carried out comprehensive skills training for employees and accelerated the cultivation of digital talents with the goal of improving the quality and effi ciency of technology empowerment, actively driving digital fi nance innovation with talent innovation, thereby providing strong talent support for promoting digital transformation Development acceleration: Steering toward optimized customer experience Aligned with its key business objectives, the Bank completed major projects with high effi ciency and quality to empower growth across the Bank The Bank launched its flagship product “Haina Pool ( 海納池 )” to continuously optimize its self-established supply chain fi nance platform, and thus enabled the fi nancial service capabilities for comprehensive wholesale business ecosystem scenarios The Bank optimized mobile banking to enhance its digital marketing services system and optimize its fi nancial products and customer experience It established the “Bo Lan Hui ( 渤攬惠 )” ecosystem scenario service brand to introducing personal pension insurance and wealth management products It launched the “Batch Open Bao ( 批開寶 )” to enrich its pension fi nance service system with Bohai characteristics, and rolled out the “Sincere E-Deposit ( 誠 e 存 )” product for intent-based fund management to actively explore new paths for digital customer management The Bank also elevated the digitalization of its fi nancial market operations by developing the new-generation Integrated Funds Business Management System, the quantitative transaction system and the agency fund transaction system, fostering professional and systematic growth of its fi nancial market operations By consistently leveraging digital fi nance to empower business development, China Bohai Bank made positive progress in transforming operations, adjusting structures, improving quality and enhancing effi ciency, further strengthening its capacity to serve the real economy It has established inclusive fi nance service brands and a pension fi nance service ecosystem centered on elderly care services and elderly care industries, and the silver economy These efforts have signifi cantly enhanced the Bank’s ability to serve the real economy and improve quality of life 76 2024 ESG REPORT OF CHINA BOHAI BANK Society CASE China Bohai Bank started a new chapter in technology fi nance On November 15, 2024, the Bank launched its newly upgraded product, domestic letters of credit, as part of its supply chain fi nance offerings, effi ciently meeting the transaction needs of corporate customers in various scenarios through “three major innovations” Commitment to transformation of transaction banking: Streamlining services through digitization and scenario-based solutions The new-generation domestic letters of credit integrated the scenario-based “Boyin Purchase Pay Ease ( 渤銀購付通 )” model, and introduced innovative products such as “Instant Letter Issuance ( 極速開證 )” and the “Three-to-Two Combination ( 三對二合一 )” solution Integrating fi nancial products into transaction scenarios may fl exibly support corporate settlement and fi nancing needs, enabling instant payments and fi nancing when aligned with business scenarios A dedicated business system for domestic letters of credit has been newly established Leveraging the output and integration of technological capabilities including corporate online banking, direct bank-enterprise connectivity and the supply chain finance platform, the system further enhanced online services across the whole process from issuance, notifi cation, submission, receipt, payment confi rmation, payment confi rmation notices, to forfaiting, and offered ultimate online experience of fi nancial services to ensure corporate customers’ easy access to domestic letters of credit and forfaiting services with one-stop login as needed, anytime, anywhere, to swiftly meet their funding needs Taking serving the national strategic objectives and the real economy as its fundamental purpose, the Bank continued to strengthen product development, scenario-based solutions and online capabilities to build a transaction banking ecosystem Especially, in supply chain finance, China Bohai Bank focused on small, medium and micro enterprises and their operational scenarios Through a tiered supply chain service system, it embed financial services into the entire industrial chain, aligning with corporate perspectives to meet corporate settlement needs while enhancing convenience and security for corporate settlement and financing Meanwhile, the Bank deeply explored customer needs, and collaborated with industry leaders to launch financial services for various scenarios such as “fi nance + electricity”, “fi nance + liquor distribution” and “fi nance + equipment distribution” based on the characteristics of the related industries and scenarios while providing services for core enterprises and public utility payments The scenario-based service capabilities have been integrated into the new-generation domestic letter of credit model, making diverse options available to customers Customers may fl exibly select fi nancial products based on their transaction scenarios and meet payment needs with one click 77 Society 2024 ESG REPORT OF CHINA BOHAI BANK Support for prime industries and regional economies: Immediate nationwide implementation upon launch Within just two days after its launch, the new-generation domestic letters of credit served over 10 leading enterprises in key industries across Beijing, Tianjin, Chengdu, Jinan, Qingdao, Guangzhou, Shijiazhuang and other regions, with an amount exceeding RMB300 million Integrated into various scenarios, the product has been solidly adopted nationwide, delivering tangible benefi ts and superior experiences to corporate customers: In Chengdu, a Fortune 500 company successfully adopted the “Instant Letter Issuance” model in combination with “Online Forfaiting” of the Bank, achieving letter issuance and disbursement within half a day The customer remarked that the “Instant Letter Issuance” model has eliminated the previous needs of requiring multiple staff members to make repeated trips to bank outlets across different locations, and it can secure same-day funding without leaving offi ce The online banking application process was praised for its exceptional convenience, with straightforward operations and excellent user experience Particularly for businesses with frequent settlement needs, this new model has significantly reduced communication costs, improved disbursement effi ciency and enhanced capital utilization The customer expressed its intention to further strengthen cooperation with China Bohai Bank In Shijiazhuang, a leading logistics company in Hebei utilized the “Haina Pool + Letter of Credit + Forfaiting” model of the Bank, and completed the entire process from letter issuance to forfaiting financing in merely two hours The remarkably smooth and efficient end-to-end process earned high praise from the customer for the Bank’s integrated product solutions and dual-driven digital transformation The customer explicitly stated it would further deepen its cooperation on financial services with China Bohai Bank in the future In Qingdao, a subsidiary of a state-owned enterprise, which faced particularly stringent payment timeliness requirements from its upstream suppliers, achieved “letter issuance and forfaiting within the same day” by adopting the new streamlined process of the Bank The seamless integration of payment settlement and upstream fi nancing alleviated its initial hesitation toward using the domestic letters of credit and forfaiting products Its fi nance team expressed pleasant surprise at the product’s convenience and efficiency, noting the product completely eliminated the cumbersome offline procedures and documentation while fully meeting its payment requirements The corporate online banking template import function has significantly reduced the workload of its finance team The customer also expressed anticipation for China Bohai Bank’s further enhancements to the business systems and achieve greater results in the future In Tianjin, a large logistics group used the corporate online banking of the Bank to issue letters of credit Its fi nance team highlighted user-friendly features such as sectionalized form fi lling, application draft saving and template pre-filling, which not only provided clear guidance but also significantly reduced errors when making applications, and expressed strong hope that China Bohai Bank would continue developing more considerate functions 78 2024 ESG REPORT OF CHINA BOHAI BANK Society Integrated Innovation: Supporting Collaborative Development Strategies As a national joint-stock commercial bank headquartered in Tianjin, the Bank takes the initiative to integrate into the Beijing-Tianjin-Hebei, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area collaborative development strategies, and is committed to providing robust fi nancial support for these collaborative development strategies As of the end of 2024, the balance of the financing related to the Beijing-Tianjin-Hebei collaboration amounted to RMB36,400 million Developing shipping fi nance As the fi rst bank in Tianjin to establish a two-tier shipping fi nance center, the Bank has continuously improved and innovated its distinctive shipping fi nance toolbox to establish a distinctive shipping fi nance brand and create a shipping finance ecosystem with collaborative forces It launched the first Tianjin corporate bond index in the interbank market - the “Shanghai Clearing House China Bohai Bank Tianjin Port-Industry-City Integrated Development Bond Index”, issued the first cross-border e-commerce electronic customs guarantee in Tianjin, and hosted the “Conference on Promoting High-Quality Integrated Development of Port, Industry and City” The Bank provided RMB13,700 million in credit support to leading Beijing-Tianjin-Hebei shipping enterprises including Tianjin Port Group, and undertook the fi rst African sovereign “buyer’s credit” project issued by a corporate bank incorporated in Tianjin, which became one of the major achievements of the Forum on China-Africa Cooperation for the year Deepening industrial fi nance The Bank seized the historic opportunity of industrial transformation in the Beijing-Tianjin-Hebei region, and increased support for upgrading traditional industries and fostering new quality productive forces It deeply cultivated key industrial chains and fully utilized innovative supply chain products to extend services from core enterprises to their chain partners, thereby continuously optimizing and expanding its customer base along the industrial chains Focusing on the characteristics and competitive advantages of the Beijing-Tianjin-Hebei region, the Bank introduced industry-specifi c and scenario-based fi nancial solutions tailored to corporate development needs It also explored the “bank-government-enterprise” cooperation model to create new approaches to industrial fi nance 79 Society 2024 ESG REPORT OF CHINA BOHAI BANK Creating multiple fi rst-time launches in the market The Bank launched China’s fi rst free trade zone credit bond index - the “Tianjin Pilot Free Trade Zone Financial Innovation Financial Leasing Credit Bond Index”, issued the first RMB5,000 million green financial bonds of a corporate bank incorporated in Tianjin, and created China’s second and Beijing-Tianjin-Hebei region’s first green-themed local government bond basket The Bank acted as the lead underwriter of the fi rst sustainability- linked perpetual bond in Tianjin, and executed the first batch of Securities, Funds and Insurance companies Swap Facility (SFISF) bond repurchase transactions as one of the fi rst batch of institutional participants in that instrument in the market The Bank successfully completed the fi rst public REITs in Tianjin, facilitated the fi rst 10-year medium-term notes for a municipal state-owned enterprise in Tianjin, and granted the fi rst technology upgrade and equipment renovation loan specifically for corporate research and development and digital transformation projects The Bank became the fi rst corporate fi nancial institution incorporated in Tianjin to promote corporate bank settlement accounts integrating domestic and foreign currencies, offering “online-offl ine integrated, domestic-foreign currency integrated” convenient account opening services In the face of the strong momentum of technology innovation in the Yangtze River Delta region, the Bank gave full play to its “CBHB Technology Innovation” comprehensive service system to propel the development of local new quality productive forces In the Guangdong-Hong Kong-Macao Greater Bay Area, it has established a collaborative service network between Guangdong, Shenzhen and Hong Kong to continuously strengthen the targeted support of fi nancial services in technology, trade and other sectors Centered on the “Boyin e-Chain” ( 渤銀 E 鏈 ) product system, we pioneered the “Customer Factory + Product Factory” dual-driver service model, which helped stabilize and consolidate the chain with diversifi ed fi nancial service innovations CASE Digital finance as the engiThe Bank hosted the “Aspiring for Miles, Connecting the World - Conference on Promoting High-Quality Integrated Development of Port, Industry and City”ne for steady and sustainable high-quality development On August 22, 2024, the Bank hosted the “Aspiring for Miles, Connecting the World - Conference on Promoting High-Quality Integrated Development of Port, Industry and City” in collaboration with Tianjin Port Group and Sinosure Tianjin Branch During the conference, the Shipping Finance Center of China Bohai Bank was offi cially inaugurated The Shipping Finance Center was established to implement Tianjin’s “Ten Actions” initiative, actively integrate into Tianjin’s new pattern of high-quality development, and support the development of a port financial 80 2024 ESG REPORT OF CHINA BOHAI BANK Society ecosystem In line with external policies, market conditions, and the development strategies of the Bank, the center will focus on port economy and shipping fi nance to make strategic arrangements, innovate shipping finance products, formulate targeted marketing strategies, serve port-related industries, and promote the integrated port-industry-city development in Tianjin The Shipping Finance Center unveiled a comprehensive fi nancial service plan to facilitate the integrated port-industry-city development, including fi ve major products: “CBHB Tariff Ease (渤銀關稅通)”, “CBHB Global Fast Payment (渤銀全球速匯) + CBHB Hedging Solution (渤銀避險 )”, “CBHB Haina Pool ( 渤銀海納池 )”, “New-Generation Corporate Account Overdraft ( 新一代法人賬戶透支 )”, and “Boyin e-Chain ( 渤銀 E 鏈 )” Centered on ports and extending to port-related industries, these products leverage the advantages of local state-owned fi nancial services to channel fi nancial “lifelines” that continuously support the integrated port-industry-city development At the signing ceremony, the Bank entered into cooperation agreements with each of the Tianjin Municipal Transportation Commission, Sinosure and the representatives from enterprises using the “CBHB Tariff Ease ( 渤銀關稅通 )” service, marking a new chapter in government-bank, bank-insurance and bank-enterprise collaboration, and providing stronger support and guarantee for the high-quality port-industry-city development in Tianjin Together with Tianjin Customs, the Tianjin Municipal Transportation Commission, Tianjin Port, Sinosure Tianjin Branch and other parties, the Bank also initiated a proposal to form a “cross-industry alliance” Each party will contribute its expertise and work collectively to enhance service capabilities, offering Tianjin enterprises more convenient, effi cient and comprehensive services and support, with an aim to elevate the quality and effi ciency of integrated port-industry-city development to new heights 81 Society 2024 ESG REPORT OF CHINA BOHAI BANK CASE Offi cial launch of the Shanghai Clearing House China Bohai Bank Tianjin Port-Industry-City Integrated Development Bond Index On April 8, 2024, the “Shanghai Clearing House China Bohai Bank Tianjin Port-Industry-City Integrated Development Bond Index” jointly designed by the Shanghai Clearing House and the Bank, was officially launched This index aims to provide market participants with diversified bond price benchmarks and investment targets, meeting market investment demands while actively serving fi nancial market innovation and supporting the healthy development of the real economy and industrial transformation and upgrading The “Shanghai Clearing House China Bohai Bank Tianjin Port-Industry-City Integrated Development Bond Index” selects urban investment bonds and industrial bonds issued by the state-owned enterprises with good credit quality in Tianjin as constituent bonds, which comprehensively refl ect the market trends of bonds that serve the high-quality port-industry-city development in Tianjin, and may serve as a performance benchmark and investment target for investment in bonds with the theme of integrated port-industry-city development The index’s base period is January 2, 2018, with a base value of 100 The back-testing period spans from January 2, 2018, to February 26, 2024, covering 1,538 trading days The index includes 42 issuers and 321 constituent bonds, comprising (ultra-)short-term fi nancing bills, private placement debt fi nancing instruments, medium-term notes, green debt fi nancing tools, corporate bonds and enterprise bonds traded in the interbank market, the Shanghai Stock Exchange and the Shenzhen Stock Exchange, with a total size of RMB3021 billion Tianjin, a city built by the sea and thriving through its port, regards port resources as a critical strategic asset and competitive advantage From systematic exploration in late 2022 to the Action Plan for Port-Industry-City Integration Development in June 2023, the Tianjin Municipal People’s Government consistently enhanced Tianjin Port’s capacity to serve the Beijing-Tianjin-Hebei collaborative development strategy, support the broader regional economy and attract resources to Tianjin Leveraging its regional advantages as a Tianjin- based state-owned fi nancial institution, the Bank deeply explored new frontiers in shipping fi nance to fully support the high-quality “port-industry-city integration” development in Tianjin Since signing a strategic cooperation agreement with Tianjin Port Group and Bohai Insurance in April 2023, the Bank have innovated shipping finance models On one hand, the Bank provided loans, bond issuance, structured financing, infrastructure REITs and other products and services to meet the needs of port construction and expansion, while exploring cross-border syndicated loans to introduce low-cost overseas funding, helping Tianjin Port Group reduce costs and improve effi ciency On the other hand, the Bank actively supported the fi nancing needs of the subsidiaries of Tianjin Port Group to support enterprises in the port-related industrial chain 82 2024 ESG REPORT OF CHINA BOHAI BANK Society CASE Leveraging headquarters advantage to deepen Beijing-Tianjin-Hebei collaboration and enhance quality of life The Bank granted a 5-year loan of RMB693 million through an internal syndication between its Beijing and Tianjin branches to support the Xiaodian Model Town Farmers’ Resettlement Housing Project in Beichen District, Tianjin Located in northern Tianjin’s urban core, Beichen District serves as a crucial functional zone along the Beijing-Tianjin urban development corridor The Xiaodian Model Town Farmers’ Resettlement Housing Project, situated in central Beichen, involves Tianjin Jinchen Yinhe Investment Development Co, Ltd as the borrower, with a total loan amount of RMB1,230 million over fi ve years The loan will be used to facilitate the development of three model towns in Xiaodian Town, Beichen District, Tianjin, namely Liu’anzhuang, Zhaozhuang and Xiaohezhuang for the construction of farmers’ resettlement housing, including community services, kindergartens, primary schools, nursing homes and municipal facilities The total construction area is 1227 million square meters, which can accommodate 14,910 villagers, a total of 4,054 households Upon completion, the project will, on the one hand, urbanize agricultural populations and improve the living standards of farmers On the other hand, it will optimize rural land resources through rational planning, laying the foundation for future town development This project was jointly undertaken by the Beijing and Tianjin branches of the Bank through an innovative internal syndicated loan structure, with the Beijing Branch serving as the agent bank and lead arranger, while the Tianjin Branch participated as a member bank Through effective internal resource coordination, this approach successfully ensured the smooth advancement of the project The Bank devised the “Tianjin Integrity Merchant Partnership Growth Program” to empower private enterprises In June 2024, the “China Bohai Bank Supports Enterprises, Integrity Endures” Conference on Credit Evaluation Deployment for Tianjin Federation of Industry and Commerce Affi liated Chambers & Launch of “Tianjin Integrity Merchant” Brand hosted by the Tianjin Federation of Industry and Commerce and Municipal Development and Reform Commission, and co-organized by the Bank and the Tianjin Credit Association, was held in Tianjin The Bank devised the “China Bohai Bank Tianjin Integrity Merchant Partnership Growth Program” and signed strategic cooperation agreements with six AAA-rated chambers of commerce, with an aim to support these chambers in broader participation in Tianjin’s regional economic development and contribute to the high-quality growth in Tianjin The “China Bohai Bank Tianjin Integrity Merchant Partnership Growth Program” centers on the “CBHB Digital E-Loan Tianjin Integrity E-Loan”, an exclusive online product designed to address the needs of 83 Society 2024 ESG REPORT OF CHINA BOHAI BANK enterprises in business operations, employee management, wealth appreciation and other aspects, and offers one-stop comprehensive fi nancial service solutions that combine online and offl ine fi nancial support, reshaping the “government + bank + chamber (association)” multi-party cooperation model This approach better aligns with the practical needs of private enterprises, while expanding coverage, increasing volume, optimizing pricing and enhancing fi nancial service accessibility and satisfaction of private enterprises “Tianjin Integrity E-Loan” is a tailored product exclusively designed by the bank for the program, which enables fully mobile-based operations with loan disbursement achievable within just 2 hours, effectively addressing financing challenges for private enterprises and activating capital liquidity At the same time, we introduced an innovative online member credit scoring system, which leverages big data modeling to provide credit and fi nancing support for enterprises and further improve comprehensive services for member enterprises Beijing Branch pursued the “fi ve priorities” based on the actual economic development and industrial layout of the capital In 2024, the Beijing Branch of the Bank closely aligned with its own advantages and characteristics, grounded in the actual economic development and industrial layout of the capital, and continuously pursued the “fi ve priorities” First, the branch increased credit supply It granted an increasing number of manufacturing loans, private enterprise loans and technology innovation loans, and actively issued sci-tech innovation notes and invested in green bonds Second, the branch optimized business processes For green credit, technology loans and agricultural-related loans, it established dedicated task forces, allocated separate credit quotas and set up fast-track approval channels For inclusive small and micro enterprises, it continued to promote credit product innovation, reasonably set loan terms, optimized loan procedures, and vigorously promoted pre-approved credit lines and fl exible loan repayment models to meet the fl exible funding needs of small and micro enterprises Third, the branch promoted distinctive products It introduced Huawei’s buyer’s agency forfaiting service without account opening and connected with Sinochem Group’s “Huacai Jin ( 化彩金 )” system for direct linkage business, thereby enhancing its capability to serve the real economy 84 2024 ESG REPORT OF CHINA BOHAI BANK Society Service Excellence: Strengthened Management Fuels Growth In 2024, the Bank insisted on “fi ve must and fi ve don’t”, focused on political consciousness in mind and putting people first in its financial operations, and took “service excellence” as the core driving force for development The ESG concept was closely integrated to promote two-way enhancement of long-term value and customer satisfaction of enterprises We continued to shape our service culture by adhering to “putting customer as focus and servicing for development”, actively responding to customer needs, and continuously optimizing the service experience, thereby striving to provide more thoughtful fi nancial services We improved the quality of customer service by, among others, improving our service management system, service standards, training and assessment to promote refi ned service management and customer satisfaction enhancement (I) Integrity Management Code of ethics The Bank has formulated and issued the Code of Professional Conduct for Practitioners of China Bohai Bank to regulate the professional behavior of employees and enhance their professional ethics and professional quality Case prevention and control, and compliance training The Bank strengthened the compliance awareness of all employees through the launch of the Bank’s case prevention and control training to ensure that every employee is able to consciously comply with compliance operations and promote the creation of value in the Bank’s daily operations In total, 10,796 participants attended training in 2024 with a pass rate of 99% 85 對營業網點內物品擺放、服務規範等細節進行規範，提升了整體服務品質和客戶體驗。 Society 2024 ESG REPORT OF CHINA BOHAI BANK (II) Service Management Establishing service management systems The Bank has formulated and issued the Code of Professional Conduct for Practitioners of China Bohai Bank to regulate the professional behavior of employees and enhance their professional ethicsThe Bank improved the service management standards and implementation procedures through the formulation of the Notice on Further Strengthening the Service Management of the Business Network, China Bohai Bank Business Network Basic Service Standards (2024 Version), Basic Requirements of China Bohai Bank Tier-one Branch Service Management (2024 Version), and Service Standards for the Operation of China Bohai Bank Business Network to ensure that all levels of the Bank’s network consistently provide quality customer service, which further improved its service management quality and professional quality Optimizing service processes The Bank standardized the placement of items and service standards in its business network to enhance the overall service quality and customer experience Management of remote services The Bank has The Management Rules for Inbound Call Outsourcing of China Bohai Bank Remote Banking Center is revised to strengthen the behavioral management of outsourced staff, and optimize the quality of remote services to ensure that the remote banking center can serve customer needs efficientlyformulated and issued the Code of Professional Conduct for Practitioners of China Bohai Bank to regulate the professional behavior of employees and enhance their professional ethics and professional quality Service monitoring management The Bank ensured that quarterly, monthly and weekly comprehensive inspections of all branches and sub-branches can be conducted through the establishment of an internal and external bank-wide service supervision and inspection mechanism, which realized a service inspection system with 100% coverage of all branches and sub-branches at the Head Office on a quarterly basis, 100% coverage of all branches and sub-branches at the branch level on a monthly basis, and 100% self-inspection coverage at the sub-branch level on a weekly basis In 2024, the Head Office conducted 2,086 inspections of branches and sub-branches, and rectified 5,745 issues with a completion rate of rectification of 994% 86 2024 ESG REPORT OF CHINA BOHAI BANK Society (III) Service Assessment and Training Improving the service assessment system The Measures for Service Management Assessment of Tier-one Branches of China Bohai Bank in 2024 has been formulated by the Bank to clarify the assessment indicators and scoring standards, and closely integrate service management assessment with KPI assessment and consumer protection assessment of the retail business line, promoting continuous improvement of customer service quality at each branch Employee training and competency enhancement We strengthened service management training and compliance training In 2024, we organized more than 700 training sessions on consumer rights protection, with a total of more than 120,000 participants, to ensure that all employees understand and implement the corporate culture and service standards The remote banking center has also strengthened service skills training, especially in customer complaint handling and risk management, to ensure continuous improvement in service quality (IV) Customer Satisfaction Tracking and Feedback In order to continuously improve the customer experience, we collected customer opinions and feedback through multiple channels Through the customer service satisfaction survey conducted at business outlets within the Bank, we collected a total of 37,544 questionnaires and the overall customer service satisfaction rate was 959% During the year, the Bank collected a total of 255,142 valid service evaluations via counter-terminal interactive devices There were 253,004 customer ratings of satisfaction, representing a satisfaction rate of 9916% The Bank also achieved a customer satisfaction rate of 9989% through transaction-triggered evaluation prompts on smart devices Such feedback provided data support for us to optimize our service processes and improve the quality of customer interactions With reference to the results of customer satisfaction surveys and feedback data, we further optimized our service processes, standardized our service behaviors, and continuously improved our service quality (V) Service Channel Construction The Bank’s online service channels adheres to a customer-centric approach Base on integrated marketing, integrated risk control, and an integrated data system, we have established an integrated online service platform that incorporates product operations, content operations, customer operations, and security control with a user-centric approach Mobile 87 Society 2024 ESG REPORT OF CHINA BOHAI BANK banking acts as the main channel for online customer service, the main battlefield for product innovation, and the main position for ecological construction, constantly iterating and upgrading the “dual model” of “finance + life” Our offline branches and institutions scientifically plans the network layout based on the construction principle of “strictly controlling new establishments and optimizing the layout” The Bank preferentially supports large industrial parks that have not been established in blank areas of cities, as well as those supported by the government We further consolidate the approval authority for site selection and carefully assess the rationality of site selection We also strengthen supervision and management of branch construction and coordinate the preparation and opening of branches Adhering to the principle of “improving quality, increasing efficiency and reducing costs”, the Bank optimizes and adjusts the layout and construction standards of outlets to promote the transformation of business outlets In 2024, the Bank established 10 new institutions and relocated 11 institutions, further optimizing and improving the layout of branch institutions As of the end of 2024, the Bank had a total of 458 ATMs and CRS equipment, including 6 off-site equipment The Bank has established a mechanism for real-time monitoring, early warning and hierarchical response to abnormal situations in self-service equipment such as ATMs throughout the day, conducted real-time monitoring of cash inventory in the machine cash box and the operation of the cash module, and continuously strengthened on-site inspections of self- service equipment such as ATMs at business outlets and management of customer advisory services, ensuring stable and 24-hour operation of our ATM self-service equipment to meet customer demand Adhering to the key principle of “optimizing payment services and improving payment convenience”, the Bank has further optimized payment services, improved the convenience of payment for foreigners in China, and achieved 100% coverage of ATM equipment with foreign card cash withdrawal function In addition, small-amount RMB withdrawal function has been integrated into our ATM equipment, with 6084% of our ATMs equipped with this function The Bank considers digital and intelligent transformation to be the primary driver for achieving high-quality financial development In 2024, the Bank participated in the World Intelligence Conference with the theme “Intelligent Connectivity, Generating Future”, where it showcased the its intelligent equipment achievements, including the UCR intelligent equipment mainframe + “intelligent lightweight desktop” equipment and all-in-one PAD equipment, to the general financial consumers In particular, the all-in-one PAD equipment demonstrated its comprehensive outreach capabilities, intelligence and convenience through the booth showcase and on-site mobile customer acquisition business scenarios, laying a hardware foundation for the Bank to build a business processing model with complementary lobby equipment The Bank has continuously optimized its door-to-door financial services, providing door-to-door services to customers who are unable to visit the counter in person for special reasons or who have difficulties doing so In 2024, the new intelligent PAD mobile equipment had a new online verification function after 19:00, which provides services for customers after working hours, ensuring that our convenient services are “never closed” Centered around the three strategic positions and development models of account banking, wealth banking, and 88 2024 ESG REPORT OF CHINA BOHAI BANK Society ecological banking in the retail business, the Bank has continuously deepened the “fi nance + life” dual service model of mobile banking, accelerated the transformation from channel construction to digital operations, and comprehensively upgraded in terms of intelligent services, wealth management, ecological scenarios, and customer experience The Bank has innovated the intelligent housekeeper services to create a brand new family financial service system, established a comprehensive wealth management service to meet the asset allocation needs of customers, enriched the ecology of community business circles and enhanced customers’ livelihoods with financing and focused on improving the customer experience so that customers can enjoy full-process convenient services The Bank’s remote banking center continues to improve the customer service experience with integration, full media, and multiple channels In 2024, the Bank received a total of 2,349,200 customer calls, with a customer satisfaction rate of 9933% for manual service channels, a call connection rate of 9081%, and an intelligent self-service diversion rate of 6573% 89 Society 2024 ESG REPORT OF CHINA BOHAI BANK Primary Responsibility: Building Comprehensive Consumer Protection The Bank has been deeply aware of keeping political consciousness in mind and putting people fi rst in its fi nancial operations, and fully performed its obligations on consumer rights protection The Bank actively constructed the work layout of “Big Consumer Protection ( 大消保 )” by integrating consumer rights protection elements throughout all processes, ensuring all employees assuming the responsibilities of consumer rights protection, paying attention to consumer rights protection at source, and strengthening consumer protection from the outset, which were organized by key executives to foster a strong culture of consumer rights protection The Bank strictly implemented the “three appropriateness ( 三適當 )” requirements By opening up complaint channels and implementing hierarchical handling, the Bank comprehensively enhanced its capabilities and standards in consumer rights protection During the reporting period, the Bank handled a total of 22,593 consumer complaints, including 21,743 complaints from individuals and 850 complaints from corporate customers, with a complaint settlement rate of 100% The complaints from individual consumers received by the Bank were primarily concentrated in personal loans and credit card services, accounting for 4106% and 3025% respectively, totaling 7131% Geographically, these complaints were mainly located across fi ve provinces and cities: Tianjin (including complaints related to consumption involving the Head Offi ce), Guangdong, Beijing, Henan and Jiangsu, accounting for 6818%, 556%, 289%, 263% and 243% respectively, totaling 8169% (I) Construction of Consumer Rights Protection Strengthening the construction of consumer rights protection mechanisms and systems The Bank integrated consumer rights protection into corporate governance, corporate culture development and business strategies The Bank has established a comprehensive and clear consumer rights protection system, covering consumer protection planning, management regulations and various supporting mechanisms, and formulated and revised 18 internal control regulations and 156 related policies specifi cally for consumer rights protection Cumulatively, the Bank devised 391 regulations related to consumer rights protection, laying a solid foundation and framework for its consumer rights protection efforts 90 2024 ESG REPORT OF CHINA BOHAI BANK Society Developing a distinctive culture brand of consumer rights protection The Bank hosted an IP solicitation and selection event for its consumer rights protection brand while adopting the slogan “Financial Services Uphold Our Original Aspiration, Consumer Rights Protection Demonstrates Our Responsibility” as the motto for its consumer rights protection culture Aiming to meet the people’s needs for a better life, the Bank fully integrated the cultural concept of consumer rights protection into its management practices, system development, business processes, ideological education, job training, inspection and supervision, and brand communication The Bank conducted over 700 consumer rights protection training sessions, cumulatively training more than 120,000 participants, which effectively enhanced its employees’ awareness and capabilities in consumer rights protection Enhancing full-process management and control effi ciency nalignment with recent regulatory priorities, high risk business areas and frequent compliance topics, the Bank further enriched its database of consumer rights protection review points, and clarifi ed mandatory constraints and dispute resolution processes It employed a combination of on and off-site and unannounced inspections to conduct consumer rights protection checks across the Head Office and its branches The Bank analyzed consumer rights protection regulatory penalties in the industry and new regulatory requirements, and organized emergency drills for major consumer rights protection incidents and signifi cant consumer complaints (II) Customer Privacy and Personal Information Security Protection The Bank has continuously established and improved the personal information protection system, and formulated and published the Customer Personal Financial Information Protection Management Measures of China Bohai Bank and the Management Rules on Data Protection for Children Customers of China Bohai Bank In accordance with regulatory requirements, the Bank has continuously refi ned the requirements for each management scenario for protecting the personal fi nancial information of customers, and strengthened the code of conduct of the Bank’s employees in terms of information protection The Bank has continuously conducted daily supervision and inspection for protecting the personal information of customers, organized and conducted semi-annual inspections across the Bank to identify potential risks in protecting 91 Society 2024 ESG REPORT OF CHINA BOHAI BANK the personal information of consumers, covering all relevant departments of the Head Office and all branches, and facilitated the safety management, operation and execution of personal information throughout its entire lifecycle comprising collection, transmission, processing, storage, usage, provision, disclosure and deletion The Bank organized and conducted special training on protection of personal financial information of customers The training included regulatory requirements, internal system regulations, employee codes of conduct, key points for personal information protection in different business scenarios and other aspects, which effectively enhanced the awareness and ability of the Bank’s employees in protecting personal information The Bank has continuously summarized and updated the key points related to personal information protection from important laws, regulations, supervisory documents, and relevant systems into the Summary of Key Points for Personal Information Protection in Banking Financial Institutions, enhancing employees’ knowledge reserve on personal information protection The Bank organized and conducted emergency drills for customer personal financial information emergencies in 2024 The Bank specially invited industry experts to conduct specialized training on emergency management and handling emergencies Various departments at the Head Office and branches participated in scenario drills, immerse simulation of the entire process of incident occurrence, classification, handling, and reporting, which further enhanced the emergency response capabilities, execution capabilities, and handling skills of relevant departments at the Head Office and branches in responding to emergencies involving customers’ personal financial information (III) Customer Complaint Management Improving the complaint management mechanism First, the Bank has revised and published the Consumer Complaint Handling Management Measures of China Bohai Bank and the Operating Procedures for Handling Consumer Complaints of China Bohai Bank (Trial), which refined the complaint statistical analysis mechanism, internal communication, information sharing, collaborative handling, complaint verification, traceability and rectification, and the mechanism for diversified settlement of financial disputes Second, the Bank has revised and published the Evaluation Measures for Handling Consumer Complaints of China Bohai Bank, which further clarified the quantitative assessment standards for self-received complaints, regulatory referrals, and complaints reported by regulatory authorities, and improved the effectiveness and operability of evaluation standards for handling complaints 92 2024 ESG REPORT OF CHINA BOHAI BANK Society Strengthening regular monitoring The Bank has established a working mechanism which involves daily monitoring, weekly summaries, monthly analysis and quarterly reporting It covers aspects such as the quality and effectiveness of complaint handling, public disclosure in relation to complaint channels, rectification of issues reported by regulatory authorities, analysis of complaint issues and source tracing The Bank identified weaknesses in a timely manner and formulated corrective measures accordingly to ensure that all types of potential risks are investigated, identified, alerted and addressed at an early stage, thus reducing the occurrence of consumer complaints at source The Bank focused on hotspots and surges in consumer complaints and conducted in-depth analysis of issues, such as complaints referred by regulatory authorities, repeated complaints and complaints from special groups We promptly notified relevant departments and business lines of the Head Office of dispute settlement cases and the content of inspection notices, timely reviewed and conducted case analyses, and provided regular reports to serve as a warning measure Strengthening traceability and rectification For business areas that receive a large amount of complaints, such as the credit card and personal loan business, the Bank has systematically formulated solutions for setting operation standards, product development, sales management, customer service, operational processes and incentive mechanisms The Bank improved the management of personal loan with a consumer-oriented approach, reasonably set business development indicators, strengthened risk control in the approval process, effectively met the reasonable demands of consumers, and improved the management, supervision and inspection of key processes such as marketing, interest rates, debt collection and personal information protection, thus effectively reducing the occurrence of consumer complaints Emphasis on the identification of abnormal complaints The Bank diligently followed the requirements of the Guidelines for the Identification of Abnormal Complaints in the Banking Industry (Trial) issued by the China Banking Association, and strengthened its ability to identify abnormal complaints through measures such as daily advocacy, special training, and case sharing The Bank conducted in-depth reviews of each complaint referred by regulatory authorities, and collected relevant supporting materials, which have been actively reported on a monthly basis It strictly adhered to the general principle of “Three Measures in Place, One Action to Handle”, resolutely resisted illegal professional agents, maintained a normal operating order in the banking industry, and effectively safeguarded the legitimate interests of consumers 93 Society 2024 ESG REPORT OF CHINA BOHAI BANK Promoting the establishment of a dispute settlement mechanism The Bank has formulated and published the Notice on Further Clarifying the Diversified Settlement of Financial Disputes, which further improved the mechanism for diversified settlement of financial disputes combining consumer complaints with dispute settlement First, the Bank has incorporated the implementation of the dispute settlement mechanism into the consumer protection assessment and evaluation system, leveraging the assessment as a guiding tool to encourage organizations at all levels to actively cooperate with local financial consumer dispute settlement organizations Second, the Bank conducted regular inspections on the establishment of mechanisms for diversified settlement of financial dispute in business departments of the branches and the Head Office, the results of which have been included in the performance evaluations Third, the Bank actively cooperated with the Tianjin Financial Consumer Dispute Settlement Center and received a thank- you letter from the center for its dedicated support in financial disputes settlement, mediator selection, optimized management system and business process, settlement business training, and financial knowledge promotion Fourth, the Bank actively promoted diversified financial dispute resolution methods through channels such as text messaging, official accounts, and video accounts, and published contact information for local financial dispute settlement organizations through its business outlets Fifth, the Bank successfully held the “Promoting the Fengqiao Experience to Facilitate Harmonious Finance” consumer protection salon event and the inauguration ceremony of China Bohai Bank Fengqiao Experience Workshop in Beijing During the year, organizations at all levels settled 447 complaints through financial dispute settlement organizations, achieving a settlement rate of 100% (IV) Education of Financial Knowledge and Promotion of Consumer Education The Bank greatly promoted the construction of a comprehensive matrix for financial education and publicity, combining online and offline methods with both centralized and localized approaches Focusing on the financial needs of key groups such as the elderly, the young, and new migrants, the Bank enhanced the relevance, inclusivity and effectiveness of financial education During the reporting period, the Bank conducted over 14,365 online and offline educational and publicity activities, reaching more than 3525 million financial consumers It was honored with the title of “National Financial System Demonstration Site Learning from Lei Feng ( 全國金融系統學雷鋒活動示範點 )” Centralized activities In accordance with regulatory requirements, the Bank organized and carried out centralized educational and publicity activities such as the “3·15” Financial Consumer Rights Protection Education and Publicity Campaign and the September as the Month for Financial Literacy across the Bank A total of 28,000 employees participated, representing 94 2024 ESG REPORT OF CHINA BOHAI BANK Society an employee participation rate of 100% Branches that were open for normal business actively participated in the publicity promotional activities, with a 100% coverage rate Various state media outlets, including the People’s Daily, Xinhua News Agency, China Media Group, Economic Daily, China Daily, CPPCC News and China News Service, reported on the Bank’s financial education and publicity activities, which effectively enhanced the Bank’s social influence Regular activities The Bank combined monthly thematic financial education with regular “outreach + open-door” the “one theme per month” approach Closely integrate financial education with the “going out” and “coming in” approaches to financial education activities, and further enhanced the frequency and consistency of daily public welfare initiativespublicity Focusing on special groups such as the elderly, the young, and new migrants“one old person, one young person and one new person”, daily consumer protection tips and holiday/solar-term themed short videos were produced and released to maintain daily educational content, weekly updates and clear thematic focus, guiding consumers to establish a scientific and healthy consumption concept 95 Society 2024 ESG REPORT OF CHINA BOHAI BANK People-Centric: Fostering a Harmonious Workplace Guided by the business philosophy of building a “professional China Bohai Bank”, the Bank prioritized the strategic development of young employees as a cornerstone initiative We accurately discerned the development trend, centered on developing versatile professionals, intensifi ed training investments, and continuously optimized remuneration and incentive mechanisms At the same time, the Bank continued to highly uphold the people-centric concept, respected and protected the rights and interests of employees, paid attention to achieving work-life balance, and valued the infi nite value of employees’ well-being for the Bank itself and the society (I) Equal Employment and Diversifi ed Recruitment The Bank has strictly complied with the Labor Law of the People’s Republic of China, the Labor Contract Law of the People’s Republic of China, the Law of the People’s Republic of China on the Protection of Rights and Interests of Women and other laws and regulations to ensure lawful employment practices and comprehensive protection of employees’ legitimate rights The Bank attaches great importance to the diversity of employee groups and equal development opportunities, and resolutely opposes discrimination against employees or restrictions on employment due to race, ethnicity, region, religion, gender and other personal traits (II) Optimization of Remuneration and Incentive Mechanisms The Bank continued to build a scientific assessment and incentive mechanism and salary distribution system, which is closely centered on the overall strategic goal of transformation and development The Bank insisted on positive incentives and value creation, followed the distribution principle of “position-based and performance-based remuneration”, emphasized the connection between performance and remuneration and established a sound market-oriented distribution mechanism to determine remuneration based on performance and contribution, so as to continuously motivate employees to enhance their personal capabilities and value contribution In terms of internal 96 2024 ESG REPORT OF CHINA BOHAI BANK Society distribution management, the average wage increase of employees at the Group’s headquarters was lower than the average wage increase of employees in positions in the Bank; the average wage increase of middle and senior management positions was no higher than the average wage increase of employees in positions in the Bank We strictly implemented the social insurance and housing provident fund systems stipulated by the state, and provided protection programs such as enterprise annuities and supplementary medical insurance (III) Supporting the Growth and Development of Employees Broadening development paths for employees The Bank has formulated the Trial Measures for the Management of the Positions and Grades of Employees of China Bohai Bank to provide employees with extensive career development opportunities and continuously broaden their career development paths Continuously enhancing employee training The Bank followed the basic principles for financial development and the modern finance theme of the “five priorities” Adhered to the direction of keeping political consciousness in mind and putting people fi rst in trainings, as supported by the building of comprehensive program system and mentors from internal trainings, the Bank established a “one body with two wings ( 一體兩翼 )” training structure, and further promoted high-quality development to achieve new results The Bank focused on its operational development goals, and contributed to business development by “facilitating training with demands” Adhering to the direction of problem solving from the hotspots, diffi culties and blocks of prevailing business practices, the Bank has been enhancing the relevance and effectiveness of trainings, and promoted the improvement of the professionalism and competitiveness of its employees At the macro and fi nancial industry levels, the Bank conducted various trainings on macroeconomic environment, investment and fi nancing market trend, full picture of foreign exchange policy, changes in policies and systems and other topics In respect of serving the real economy, the Bank conducted various trainings on capacity improvement of retail business in branches, customer boost agency service, desirable deposit growth and customer base management strategy and other topics In respect of promotion of fi nancial innovation and development, the Group conducted various trainings on business operation, transformation and innovation in finance market, deepening of retail reform, promotion of high-quality development and other topics 97 Society 2024 ESG REPORT OF CHINA BOHAI BANK CASE Jinan Branch held a training program to improve the management capabilities of its young cadres and reserve talents In order to further strengthen the construction of its team of young cadres, enrich management knowledge, broaden management perspectives, improve management capabilities, and consolidate development momentum, in November 2024, the Jinan Branch of the Bank cooperated with Shandong University to hold a 5-day training program to improve the management capabilities of its young cadres and reserve talents This training program underwent nearly two months of meticulous preparation from participant selection and curriculum development to program execution It was a fi ve-day premium course designed to cover the management abilities and quality improvement required of emerging management personnel Tianjin Branch organized the fi rst “Meeting the Managers” elite training camp To enhance the professional capabilities of its retail account managers, in November 2024, the Tianjin Branch of the Bank, in collaboration with Capital Securities, organized the fi rst “Meeting the Managers” elite training camp for 20 account managers who achieved excellent performance in the distribution of trusts and wealth management products at the end of October The event invited outstanding lecturers from Capital Securities to give lectures on site, with topics including the macro market “How to view the strategic opportunities of China’s capital market” and the analysis of the operation of trust asset management products “Report on the operation of Capital Asset Management products” From the macro to the micro, the lectures were explained in a simple way for the outstanding elites within the industry, enhancing their professional service capabilities (IV) Protecting the Legitimate Rights and Interests of Employees The Bank implemented a labor contract system for all employees, and all contract employees must sign labor contracts with the Bank in accordance with the law The Bank’s employees enjoy various types of leave as stipulated by the state, as well as basic social insurance such as basic pension insurance, basic medical insurance, unemployment insurance, work-related injury insurance and maternity insurance, housing provident fund, heatstroke prevention and cooling, heating subsidies and other state-mandated benefi ts, fully respecting and practically protecting the legitimate rights and interests of employees 98 2024 ESG REPORT OF CHINA BOHAI BANK Society The Bank strictly abides by relevant national regulations to protect the legitimate rights and interests of female employees, and provides special protection to female employees during pregnancy, childbirth and breastfeeding The Bank hosted an event with a theme of “Women Excel, Striving for a Good Start” to celebrate the International Women’s Day on March 8, showing its special care for female employees The Bank hosted a series of themed activities for the International Women’s Day, “Dragon Soaring over China Bohai Bank, Women Achieving Success” (V) Fostering a United and Harmonious Labor Relationship The labor unions at all levels of the Bank actively fulfilled their basic duties, innovated service methods, promoted democratic management, and fostered a united and harmonious labor relationship and a good culture of corporate development In 2024, the labor union at the Head Office gave away a total of RMB95,500 in relief goods and money to frontline employees in need, and gave away a total of RMB48,000 in relief goods and money to employees and their families affected by typhoon in the Haikou Branch, the Shanghai Pilot Free Trade Zone Branch and the Shanghai Branch, and 99 Society 2024 ESG REPORT OF CHINA BOHAI BANK the labor union at the administration gave away a total of RMB136,000 in relief goods and money to employees in need The frontline labor unions in the Tianjin region gave away RMB220,000 worth of holiday gifts to on-duty employees We conducted 141 routine care visits for weddings, childbirth, hospitalization and other incidents with a total of RMB350,000 disbursed The Head Office also purchased mutual accident insurance for employees and processed RMB159,700 in critical illness claims for 6 employees The labor union at the Head Office organized psychological counseling to effectively alleviate the psychological stress and negative emotions of our frontline employees, and hosted 6 networking events for single employees, with a total of 359 participants, in order to help young employees fi nd their life-long partners In addition, the labor union at the Head Offi ce also allocated annual subsidies of RMB12562 million as the labor union funds to support the frontline labor unions in serving frontline employees The Bank revised the Administrative Measures for Relief and Assistance for Staff Members in Need of Labor Unions (Interim) and elevated hospitalization support standards for ill members At the same time, the Bank dedicated resources to the frontline employees, and allocated RMB93 million in union funds to support the recreational cultural and sports activities carried out by the labor union teams of various departments CASE Tianjin Branch organized the theme activity “Golden Autumn Dreams Soar, Healthy Striving Empowers Journeys” In order to strengthen the role of labor union as a bridge and bond, enrich the employees’ leisure life, and enhance communication among its teams and employees, the labor union of the Tianjin Branch of the Bank organized the theme activity “Golden Autumn Dreams Soar, Healthy Striving Empowers Journeys” for its members During the activity, labor union teams independently partnered up to conduct diverse team-building exercises across Tianjin in their spare time, including fi tness walking, mountain hiking, cycling and recreational sports, which embodied the concepts of low-carbon, environmental protection, health, and harmony In 2024, the Bank revised the Employee Representative Meeting System of China Bohai Bank and the Administrative Disclosure System of China Bohai Bank; organized and held 9 employee representative meetings at the Head Offi ce to review and discuss proposals on systems related to employees’ immediate interests, such as the Measures for Handling Employee Violations and the Measures for the Management of the Positions and Grades of Employees More than 200 employee representatives of the Bank elected new employee supervisors via on-site voting The Tianjin Branch and other branches held seven frontline employee representative meetings, demonstrating that employee representatives at all levels participated in corporate governance in an orderly manner, actively participated in corporate management, and worked together to foster a harmonious labor relationship 100 2024 ESG REPORT OF CHINA BOHAI BANK Society On October 26, 2024, the Bank held its fourth staff sports day The Bank formed a team to participate in the opening ceremony of the Tianjin Workers’ May 1st Carnival 101 Society 2024 ESG REPORT OF CHINA BOHAI BANK Smart Procurement: Rigorous Supply Chain Management The Bank has issued the Procurement Management Measures of China Bohai Bank (2024 Revision) and the Management Measures for Procurement Authorization of China Bohai Bank, which further improved the management standards of procurement projects at all levels in accordance with the law The Bank has established a smart procurement technology platform system with “Bo Cai Yi Guan ( 渤採易管 )” as the core and “Bo Cai Yi Cai ( 渤採易採 )” and “Bo Cai Yi Gou ( 渤採易購 )” as the supplementary dual platforms, providing supply chain cooperation solutions from management to services for various types of suppliers In 2024, the “Bo Cai Yi Gou ( 渤採易購 )” platform processed more than 6,000 orders in total, with a total amount of over RMB88 million The Bank strengthened the supervision of the exercise of power in centralized procurement activities, and implemented open and transparent procurement by integrating departmental control and management into the entire process and every aspect of procurement execution and supervision, while always adhering to the principles of openness, fairness and impartiality For Class A procurement projects, 845% of the projects disclosed transaction amounts publicly, 100% of the projects were conducted through the entrusted procurement model, and external experts constituted no less than two-thirds of the member of the evaluation committees of the projects In the procurement process, the Bank pursues compliance with high effi ciency while improving quality and effi ciency In 2024, the Bank completed a total of 62 Class A batch procurement projects, with a procurement budget of RMB410 million and a fi nal transaction amount of RMB340 million, and achieved a savings rate of 1814% and savings (net profi t contribution) of RMB74 million 102 2024 ESG REPORT OF CHINA BOHAI BANK Society The Bank has established a procurement risk prevention mechanism featuring “front-end prevention, mid-process control, and back-end supervision”, which is a comprehensive, multi-faceted, three- dimensional supervision and control system that spans from centralized procurement policies to internal compliance management, and further extends to audits, disciplinary inspections, and inspection tours By combining prevention with oversight, we have intensified the frequency of inspections and spot checks for both branches and the Head Office’s demand management departments, with heightened scrutiny applied to critical areas and pivotal stages Full-process supervision and management is implemented across the preparation of procurement budgets, the finalization of procurement demand, the preparation of procurement plans, the management of evaluation experts, the review of response documents, the signing of procurement contracts, and the acceptance and inspection of goods and services 103 Society 2024 ESG REPORT OF CHINA BOHAI BANK Proactive Commitment: Scaling Up Investment in Public Charity “Supporting Public Welfare to Show Love” has remained a constant and radiant hallmark throughout the growth journey of China Bohai Bank In 2024, we continued our targeted poverty alleviation efforts, signifi cantly increased our investments in public welfare and charitable initiatives, and deepened our volunteer services, making this radiant hallmark shine even brighter (I) Targeted Poverty Alleviation Efforts In accordance with the requirements of the Party Central Committee and the CPC Tianjin Municipal Committee on comprehensive rural revitalization, the Party Committee of China Bohai Bank has prioritized assistance to economically underdeveloped villages Since July 2021, the Bank has carried out a new round of targeted support for the economically underdeveloped villages in Sangzi Town, Jizhou District, Tianjin From 2021 to 2024, the Bank disbursed support funds totaling RMB96 million to four economically underdeveloped villages in Sangzi Town, including support funds amounting to RMB32 million disbursed to four economically underdeveloped villages at the beginning of 2024 In 2024, the Bank’s poverty alleviation taskforce: first, utilized fiscal funds to generate a total of RMB196,000 in collective operating income for four villages; second, guided the two committees of the villages to actively review the land contracting contracts of the villagers and standardize the contracting system, adding approximately RMB410,000 to collective operating income; third, actively marketed high-quality green agricultural products and implemented consumption support policies, achieving sales of about RMB600,000 as of July 2024, which included about RMB60,000 in profit-sharing for economically underdeveloped villages; fourth, supported characteristic industries with the strong support and cooperation of the town Party committee and government, contributing RMB200,000 to collective income The four economically underdeveloped villages achieved collective operating income totaling RMB866,000 for the year All of them exceeded the RMB200,000 target in annual income from collective operations in the acceptance assessment in August 2024 At the same time, the villagers’ disposable income reached the city’s average level In addition, since April 2024, according to the work plan, we have cooperated with the town government to carry out village-by-village acceptance inspections of infrastructure construction projects to improve economically underdeveloped villages, and have successfully passed the comprehensive acceptance inspections by the municipal and district Party committees and governments 104 2024 ESG REPORT OF CHINA BOHAI BANK Society In August 2024, the Bank’s poverty alleviation taskforce fulfi lled all 34 assessment indicators under the “fi ve increases and fi ve upgrades” three-year support program for economically underdeveloped villages formulated by the Tianjin Municipal People’s Government The Bank’s poverty alleviation taskforce was highly recognized by the district and town Party committees and local governments and also praised by the villagers It was also rated as an outstanding support unit by Jizhou District (II) Public Welfare Donations Supported the “Quality Teacher University” Project General Secretary Xi Jinping pointed out in his speech during his inspection of Tianjin that “Tianjin, as the country’s advanced manufacturing, research and development base, must give full play to its advantages such as its extensive scientifi c and educational resources, and strive to be the fi rst and excel in developing new quality productive forces” Tianjin Normal University is the inheritor of Tianjin’s century-long tradition of teacher education and the birthplace of Tianjin’s basic education legacy It has cultivated a large number of famous experts in basic education and core backbone teachers for Tianjin and even the whole country The university gives full play to its leading and pivotal role in higher education and takes the initiative to integrate into the coordinated development of education in the Beijing-Tianjin-Hebei region It has established the “Beijing-Tianjin-Hebei Research Institute of Ecological Civilization Development”, the “Beijing-Tianjin-Hebei International Chinese Education Exchange Center” and the “Beijing-Tianjin-Hebei Collaborative Innovation Center for Teacher Development” to serve the construction of Tianjin’s “1+3+4” modern industrial system and 12 industrial chains The Tianjin Higher Education Think Tank Development Research Center is headquartered at the university, with three think tanks being selected as high-end think tanks in Tianjin In order to earnestly fulfi ll its commitment to sustainable development, support educational endeavors, and contribute to Tianjin’s chapter of Chinese modernization, beginning from 2024, the Bank has supported the “Quality Teacher University Project” of Tianjin Normal University for four consecutive years through charitable donations totaling RMB40 million In May 2024, the Bank disbursed the fi rst installment of RMB10 million to the Tianjin Normal University Education Development Foundation The Bank’s donation will be used in attracting and nurturing of high-end talent, faculty development and training, education and teaching reforms, enhancing academic research capabilities, improving and innovating management services, expanding external exchanges and cooperation, and other initiatives 105 Society 2024 ESG REPORT OF CHINA BOHAI BANK Participated in Typhoon Disaster Relief Efforts in Hainan On September 6, 2024, a super typhoon named “Capricorn” made landfall in Wenchang, Hainan, causing serious damage to parts of Hainan Province The Bank donated disaster relief supplies worth RMB74,300 to Puqian Town, Wenchang City, and the Haikou Branch was tasked with carrying out targeted assistance efforts, including providing drinking water, daily necessities and medical supplies to the affected areas, as well as assisting with emergency power supply support On September 12, the Bank delivered relief supplies to Puqian Town Despite challenges such as disrupted communications and staffi ng shortages, the Bank swiftly and actively engaged in disaster relief operations Haikou Branch rushed to the typhoon-stricken area 106 2024 ESG REPORT OF CHINA BOHAI BANK Society CASE Kunming Branch went to Wuding County to pursue targeted poverty alleviation On January 18, 2024, the person in charge of the Kunming Branch of the Bank led a team to Zengyi Village, Chadian Town, Wuding County, Chuxiong Prefecture to conduct research on targeted poverty alleviation and visit cadres stationed in the village as assigned by the Kunming Branch During the research, the branch held discussions with cadres from Chadian Town and Zengyi Village, and conducted in-depth discussions on consolidating the results of poverty alleviation, increasing the income of villagers, and implementing the “fi ve small” projects related to rural pension in Wuding County (III) Volunteer Services Over the years, the Bank has actively encouraged employees to make progress alongside the enterprise, care about people’s livelihoods and well-being, devote themselves to public welfare and charitable initiatives, and participate in volunteer services Taking the volunteer service team at the Head Offi ce as a benchmark, we have promoted the establishment of employee volunteer organizations across all branches to organize and participate in volunteer services and activities For example, the Shenzhen Qianhai Branch formed a youth volunteer team named “CBHB Shenzhen Qianhai Branch ‘Youth Cavalry’ Volunteer Service Team”, which integrates into the “Youth Cavalry” volunteer initiative of the fi nancial sector in Shenzhen The Hangzhou Branch has established multiple volunteer teams, including those for Party members, young volunteers, female volunteers, and community volunteers, ensuring a well-structured organizational system and orderly activity execution The Nanning Branch assembled the “Golden Osmanthus Spark” Party Building Volunteer Service Team to participate in the theme activity of “Growing with Finance, Building a Strong Protective Wall” organized by the Guangxi Bureau of the National Financial Regulatory Administration By the end of 2024, the Bank has carried out more than 1,570 volunteer service activities, with 2,721 employees participating in these activities, accumulating more than 21,000 hours of service The volunteer service team at the Head Offi ce has recruited a total of 1,524 registered volunteers The volunteer service team at the Head Offi ce has been actively implementing Party-building initiatives to guide frontline governance initiatives, and leveraged the Bank’s advantages as a state-owned fi nancial enterprise It has consistently engaged in community governance, charitable activities and public welfare programs, and continuously carried out “Six Linkages” community partnership projects, which facilitated the sharing of resources with neighboring communities, provided support to disadvantaged groups at the grassroots level and people in need in the community, and contributed to the development of a more beautiful Tianjin through volunteer-driven business growth We have organized a wide 107 Society 2024 ESG REPORT OF CHINA BOHAI BANK range of volunteer initiatives such as assistance for the underprivileged, financial literacy education, matchmaking events, charitable donations, book-sharing programs, emergency preparedness training, community beautification efforts, cultural performances, public space improvement, waste sorting campaigns, and beautifying the Haihe River At the 2024 Tianjin Youth Volunteer Service Project Competition jointly hosted by the Tianjin Municipal Committee of the Communist Youth League, the Social Work Department of the Tianjin Municipal Committee of the Communist Party of China, and the Tianjin Municipal Civil Affairs Bureau, the Bank’s “Love and Companionship with ‘Silver Bells’” financial education volunteer service project, which aims to improve financial literacy and fraud prevention awareness among the elderly, won the bronze prize at the Tianjin Youth Volunteer Service Project Competition The financial education volunteer service team at the Head Office was recognized as a “National Financial System Demonstration Site Learning from Lei Feng ( 全國金融系統學雷鋒活動示範點 )” in the national financial system demonstration site learning from Lei Feng and the selection of Lei Feng role models On July 30, 2024, the volunteer service team at the Head Office launched the “Fulfilling Our Duty with Blood Donation, Demonstrating State-Owned Responsibility” blood donation activity A total of 120 volunteers signed up, with 93 successfully donating blood, contributing a remarkable23,300 ml in total for blood donation The May 2024 issue of the magazine Charity featured the public welfare efforts of the partner organizations and volunteer service teams of the Tianjin Charity Association, including a special report on the initiatives of the volunteer service team at the Head Office At the same time, the branches of the Bank have leveraged the organizational strengths of the Party, the Communist Youth League and the labor unions to encourage employees to actively participate in volunteer services and charitable activities Over the past three years, volunteer activities have flourished with diverse and impactful programs in various branches The Shanghai Pilot Free Trade Zone Branch partnered with Weifang Sub-district to establish the Wangjiang Post Volunteer Team, which engages in the daily operations, public welfare activities and cultural services at the post The staff volunteers of the Haikou Branch were devoted to disaster relief efforts for Typhoon “Capricorn”, addressing critical shortages of drinking water, daily necessities and medical supplies in affected areas The Youth League Committee of the Nanjing Branch took the lead in forming a youth-dominated volunteer team, and worked with the sub-district and schools to co-organize the “Hand-in-Hand with Love for Children’s Day” themed event The Taiyuan Branch emphasized military and police support through community-integrated volunteer activities across its sub-branches The Jinan Branch maintained regular employee volunteer services, and organized 265 consecutive days of activities in 2024, benefiting 147,683 people The Xi'an Branch established a “Respect for the Elderly Month” task force, and carried out volunteer service activities with the theme of “Insisting on a Senior-centric Approach and Building an Age-friendly Society”, serving 2,255 people The Suzhou Branch launched the “Bohai Volunteers Serving the Public” campaign, signed community partnership agreements, and set up an “8-Task Action Plan” to enhance urban environments and resolve resident challenges The Hohhot branch carried out a wide range of volunteer activities, including blood donations, outreach activities in schools, rural areas and communities, visits to elderly homes, responsible dog ownership advocacy, and support for military families 108 2024 ESG REPORT OF CHINA BOHAI BANK Society CASE Shijiazhuang Branch set up “College Entrance Examination Volunteer Service Stations” On June 6, 2024, the Shijiazhuang Branch of the Bank issued a notice requiring all sub-branches to set up “College Entrance Examination Volunteer Service Stations” in their banking halls during the National College Entrance Examination period from June 7 to 9 These stations should provide six complimentary convenience services for examinees and their parents The first was to prepare bottled drinking water or bottled plum juice; the second was to prepare paper and pens; the third was to prepare emergency charging devices; the fourth was to provide wireless Wi-Fi Internet access; the fi fth was to provide temporary rest areas with shelter from rain; and the sixth was to provide umbrellas All sub-branches ensured the above services were fully operational prior to the examination dates Nanjing Branch visited orphaned and disabled children in the community ahead of Children’s Day On May 31, 2024, the labor union, the youth league committee, the Party branch of the Daguanlu Sub- branch and the retail banking staff of the Nanjing Branch of the Bank visited Guanghua Dongjie Primary School to spend time with the orphaned, disabled, underprivileged and ethnic minority children from the local community, and participated in the “Hand-in-Hand with Love for Children’s Day” event co-organized by the branch, the sub-district and the school The labor union and the youth league committee of the branch, alongside the frontline branches of the sub- branches, have actively participated in community partnerships and public welfare programs for a long time 109 Society 2024 ESG REPORT OF CHINA BOHAI BANK CASE Shenzhen Qianhai Branch “Youth Cavalry” Volunteer Service Team engaged in community outreach In the third quarter of 2024, the Shenzhen Qianhai Branch of the Bank established the “CBHB Shenzhen Qianhai Branch ‘Youth Cavalry’ Volunteer Service Team”, actively stepping out into the community to deliver fi nancial services for the public good On July 31, the branch’s “Youth Cavalry ” volunteer service team went to the Yuer Community in Shekou Sub-district, Nanshan District, to carry out a publicity campaign on preventing new types of telecom and online fraud On September 12, the branch’s “Youth Cavalry” volunteer service team went to the Xicheng Yazhu Residential Complex in Haiyu Community, Xin'an Subdistrict, Bao'an District, to carry out community volunteer activities 110 Governance Good corporate governance is an inevitable element for high-quality development The Bank is fully committed to strengthening the foundations of corporate governance, continuing to optimize and deepen the implementation of a ‘comprehensive, proactive, agile and effective’ risk management system, and promoting the construction of a large-scale risk concentration system The Bank optimizes its internal control and compliance management system, and strictly monitor employee behavior, so as to effectively prevent and mitigate various financial risks The Bank has been operating prudently and developing steadily, thereby achieving sustainable development value Through continuous building up of ESG management capability, the Bank promotes High-quality development for future steady operations 111 112 2024 ESG REPORT OF CHINA BOHAI BANK Governance Strengthening Corporate Governance Through Optimization and Enhancement Sound corporate governance is a cornerstone of high-quality development China Bohai Bank continuously improves its modern corporate system and enhances its governance capabilities to provide a solid foundation for high-quality transformational development (I) Further Improving Corporate Governance Structure In accordance with laws and regulations such as the Company Law, based on as well as with reference to the actual situation of the Bank, the Bank has established a corporate governance structure suitable for modern enterprises, which comprisinges of the Shareholders’ general meeting, the Board of Directors and its special committees, the Board of Supervisors and its special committees and the senior management and its special committees, and integrated the Party’s guidance into all links of corporate governance The Party organization plays a leading role, and is responsible for setting the directions, managing overall situation and securing implementation The Shareholders’ general meeting is the highest organization of authority of the Bank, which exercises its functions and powers of authority according to laws As the decision-making organizationorgan of the Bank, the Board of Directors assumes the ultimate responsibility for the Bank’s operation and management, and is accountable to the Shareholders’ general meeting As the supervisory organization, Tthe Board of Supervisors is the Bank’s supervisory organization and is accountable to the Shareholders’ general meeting As the execution organization of the Board of Directors, tThe senior management, as the executive organ of the Board of Directors of the Bank, is responsible for the Bank’s operation and management, and is accountable to the Board of Directors In 2024, the Shareholders’ general meeting, the Board of Directors, the Board of Supervisors and their respective special committees fully played their roles in decision-making and supervision, with a total of and held 61 meetings heldin total, at which they deliberated 178 proposals and adoptedreviewed 178205 resolutions, heard and reviewed 7107 work reports and formed opinions thereon, and made timely decisions on major issues concerning the Bank’s development and facilitated the implementation thereof 113 Governance 2024 ESG REPORT OF CHINA BOHAI BANK (II) Further Improving Corporate Governance System Since its establishment, the Bank has established a relatively comprehensive corporate governance system with continuous revision and improvement, laying a solid foundation for the legal, compliant and efficient operations of corporate governance units In 2024, the Board of Directors formulated the Measures For Comprehensive Risk Management and the Measures For Financial Asset Risk Classification, and revised the Group Risk Appetite Statement, the Measures For Country Risk Management, the Operational Risk Management Policy, the Information Technology Risk Management Policy, the Liquidity Risk Contingency Plan, the Management Measures For Criminal Case Risk Prevention and Control, the Measures For Violations by Employees, the Management Measures For Business Continuity, the Recovery Plan for China Bohai Bank, the Suggestion for Disposal Plans of China Bohai Bank, the Management Measures For Consignment Wealth Management Business, the Management Rules For Sales in Consignment Wealth Management Business and the Management Measures For the Administration of Consignment Wealth Management Business Sales Personnel The Audit and Consumer Rights Protection Committee of the Board of Directors revised the Management Measures For External Accounting Firms In addition, based on the latest amendments to the Company Law and relevant changes in overseas listing regime for Chinese enterprises, the Bank has initiated works on amendments to the Articles of Association, and has prepared the fi rst draft of the amendments The Bank is seeking opinions from all parties and continuously refi ning the amendments At the same time, in accordance with relevant requirements of the state-owned assets management department and the fi nance department, the Bank continues to monitor the progress of regulatory updates, actively studies and explores plans on amendments to the Articles of Association that is in line with the reform of the Board of Supervisors, and continues to promote the establishment of corporate governance system (III) Further Improving Information Disclosure Mechanism Adhering to sound corporate governance, the Bank continues to regulate the information disclosure mechanism, aiming to treat shareholders and stakeholders fairly In 2024, more than 70 information disclosure documents, including regular reports, various statutory and voluntary temporary announcements, were published on the offi cial websites of the Hong Kong Stock Exchange and the Bank The Board of Directors successfully prepared and disclosed the 2023 Annual Report and the 2024 Interim Report in accordance with industry regulatory requirements and requirements under the Hong Kong Listing Rules The Audit and Consumer Rights Protection Committee under the Board of Directors and independent Directors of the Bank strictly implemented the Work Procedures For Reviewing Annual Financial Reports By Audit and Consumer Rights Protection Committee of the Board of Directors and the Work Procedures For Reviewing Annual Reports By Independent Directors, and diligently guided and supervised works on preparation, review and disclosure of annual reports 114 2024 ESG REPORT OF CHINA BOHAI BANK Governance (IV) Communications Between the Shareholders’ General Meeting, the Board of Directors, the Board of Supervisors and the Senior Management In order to make all corporate governance units duly perform their duties, improve effi ciency and level up standards, it is essential for the Shareholders’ general meeting, the Board of Directors, the Board of Supervisors and the senior management to communicate with each other in a timely, smoothly manner To ensure timely and effective communications between corporate governance units and improve the effi ciency and standard of duty performance, the Bank issued a total of 43 minutes of president’s executive meeting, 29 information reports, 2 consumer rights protection risk alerts and 51 general related party transaction reports in 2024, providing information support for the Board of Directors, the Board of Supervisors and their special committees in making scientifi c decisions 115 Governance 2024 ESG REPORT OF CHINA BOHAI BANK Robust Framework: Advancing ESG Management The Bank has established a sound governance framework, continuously strengthened the ESG management capabilities of the Board of Directors, and consistently improved its ESG management policies to advance ESG performance (I) Governance Structure The Board of Directors of the Bank is the highest decision-making organization for ESG risk management It assumes the ultimate responsibility for ESG risk management, promotes the implementation of “carbon peak and carbon neutrality” target across the Bank, deliberates and makes decisions on major ESG-related matters, regularly reviews the progress of ESG-related works, and reviews the annual ESG report, public welfare and charity donations, green finance work report, inclusive finance business development plan, consumer rights protection works and relevant issues The Board of Directors has established special committees, including the Risk Management and Green Finance Committee, the Audit and Consumer Rights Protection Committee and the Development Strategy and Inclusive Finance Committee, to review important issues on corporate governance, development strategy, risk management, internal control and compliance, related party transaction, green fi nance, inclusive fi nance, social responsibility and consumer rights protection in relation to the performance of ESG responsibilities, and to provide advice and recommendations to the Board of Directors (II) ESG Management by the Board of Directors In 2024, the Board of Directors of the Bank considered and approved 18 ESG-related resolutions, including, among others, the Bank’s annual ESG report, annual review on corporate governance policy, annual report and interim report, annual and interim comprehensive risk management report, annual green finance work report, annual and interim consumer rights protection work report, annual consumer rights protection assessment report, annual revision on group risk appetite statement, annual assessment report on shareholders’ qualification, publication of insider information announcements on quarterly financial information and other information, three rounds of donation, and candidates 116 2024 ESG REPORT OF CHINA BOHAI BANK Governance for the sixth session of the Board of Directors It has also listened to 9 ESG-related reports, including annual special report on related party transactions, annual inclusive finance business development plan, annual regulatory evaluation on consumer rights protection, annual consumer complaint handling work report, and annual and quarterly consumer complaint reports All Directors have participated in special training sessions, namely Analysis on General Trend of Consumer Right Protection and Interpretation of Regulatory Policies Under New Regulatory Regime and Discussion on Impacts of the Revision of Company Law On Corporate Governance in the Banking Industry, and studied the anti-corruption training material, namely “Hong Kong’s Competitive Edge - Partnership in Business Ethics” Toolkit on Directors’ Ethics All members of the Audit and Consumer Protection Committee attended the Training on Accounting Standards and Important Regulatory Updates Three proposed directors attended the Compliance Training for Hong Kong Listed Company and the anti-money laundering and counter-terrorist financing trainings of the Bank The secretary to the Board and the joint company secretaries participated in continuing professional trainings, as well as themed trainings on the Roles of Secretary to the Board of Directors of Commercial Banks and the Amendments to G20-OECD Principles of Corporate Governance and Development Trend of Corporate Governance in the International Banking Industry The aforementioned 2023 Annual Report and 2024 Interim Report, as reviewed and approved by the Board of Directors, included ESG risk sections The 2023 Annual Comprehensive Risk Management Report and the Comprehensive Risk Management Report for the First Half of 2024 included contents on ESG risk management, which described the Bank’s works on ESG risk management and results thereof As guided and driven by the Board of Directors, the Bank supports the development of real economy in key national sectors, actively performs its environmental and social responsibilities, creates social value, enhances the performance of ESG responsibilities on green finance, inclusive finance, private enterprises, manufacturing industry and rural revitalization, continuously strengthens its risk management capabilities, and establishes itself into a responsible bank with pioneer concepts, sustainable finance resources and outstanding ESG performance Hence, the Bank’s ESG governance performance and ESG performance have been enhanced The 2023 Annual Social Responsibility (ESG) Report was considered and approved at the 56th meeting of the 5th session of the Board of Directors of the Bank on March 28, 2024, with further improvements and enhancements made as compared to last year’s report: (1) the report was prepared under three key themes, namely “Environment”, “Society” and “Governance”; (2) in response to requirements under the “Enhanced ESG Management and Information Disclosure on Climate and Environmental Risk Management: Emphasizing the Disclosure of the Roles and Works of the Board of Directors in ESG Management” of HKEx, additional information for “ESG management” and “environmental and climate risk management” has been added; (3) in accordance with the guidance of HKEx on the “Preparation for the Comprehensive Introduction of Environmental and Climate Disclosure Indicators of the ISSB (International Sustainability Standards Board)”, an index of disclosure indicators recommended by the TCFD (Task Force on Climate- Related Financial Disclosures of the Financial Stability Board) has been added to the “Appendices” 117 Governance 2024 ESG REPORT OF CHINA BOHAI BANK (III) ESG Management Approach and Strategy The Board of Directors of the Bank attaches great importance to ESG management Adhering to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, it has determined the fundamental direction for ESG management of developing China Bohai Bank into a modern financial institution with Chinese characteristics that is strongly guided by state policies, featuring a clear strategic positioning, effective corporate governance, improved business quality and efficiency, controllable overall risks and healthy and sustainable development, through continuous strengthening of ESG management The Board of Directors of the Bank adopts a systematic process to evaluate, prioritized and manage material ESG issues Adhering to the implementation of Party’s guidelines, policies and national strategies, centering on the missions to be accomplished by financial institutions in banking industry, this process is formulate after thoroughly taking into consideration of the changes in domestic and overseas regulatory requirements, industry development trends, stakeholder feedback and strategic goals of the Bank In 2024, the Board of the Bank treated the missions of “deeply grasped keeping political consciousness in mind and putting people first in the financial work, kept in mind the attributes of small and medium-sized financial institutions, focused on the prioritized task of economic construction and high- quality development, and implemented the five priorities” and “actively served the Tianjin “Ten Special Tasks”, fully implemented the revitalization of existing stocks, cultivated incremental growth, and enhanced quality standards” as the priorities of ESG strategic management The Development Strategy Plan for 2021-2025 (2024 Revision) was considered and approved at the 67th meeting of the 5th Board of Directors of the Bank held on December 20, 2024 The Board of Directors of the Bank implements a long-term strategy of “enhancing duty performance and strengthening the foundation of ESG management” The Board of Directors conducts continuous professional trainings and studies in order to ensure continuous enhancement of ESG knowledge and capabilities of its members In 2024, all Directors have participated in special training sessions, namely Analysis on General Trend of Consumer Right Protection and Interpretation of Regulatory Policies Under New Regulatory Regime and Discussion on Impacts of the Revision of Company Law On Corporate Governance in the Banking Industry, and studied the anti-corruption training material, namely “Hong Kong’s Competitive Edge - Partnership in Business Ethics” Toolkit on Directors’ Ethics All members of the Audit and Consumer Protection Committee attended the Training on Accounting Standards and Important Regulatory Updates Three proposed directors attended the Compliance Training for Hong Kong Listed Company and the anti-money laundering and counter-terrorist financing trainings of the Bank The secretary to the Board and the joint company secretaries participated in continuing professional trainings, as well as themed trainings on the Roles of Secretary to the Board of Directors of Commercial Banks and the Amendments to G20-OECD Principles of Corporate Governance and Development Trend of Corporate Governance in the International Banking Industry In addition, the Bank also gathers information on the latest regulatory requirements of the Hong Kong Stock Exchange and ESG update news for the study of Directors These measures not only help Directors keep well-informed of the latest developments and best practices in ESG-related matters, but also continuously improve their duty performance, ensuring scientific and effective decisions in ESG management can be made 118 2024 ESG REPORT OF CHINA BOHAI BANK Governance (IV) Review and Optimization of ESG Management The Board reviews the progress of accomplishing ESG-related goals on regular basis so as to ensure steady progress towards High-quality development can be made This process involves the use of various mechanisms and tools, including ESG performance data review, analysis on key indicators, as well as communication and collaboration with the management The Board of Directors thoroughly reviews the Bank’s annual ESG report, evaluates the progress of ESG work, and identifi es areas for improvement At the same time, the Board of Directors values feedbacks from external parties, such as requirements of regulators and stakeholder opinions, aiming to gain a comprehensive understanding of the Bank’s ESG performance During the review process, the Board of Directors and the management of the Bank will jointly analyze the implementation of the ESG strategy, discuss the challenges and opportunities in the progress of implementation, and adjust strategies and goals as needed, so as to ensure that ESG objectives are aligned with overall strategy and consistent with industry standards and regulatory expectations In 2024, the Board of Directors supervised relevant departments in making timely update on information disclosure process, so as to ensure they are consistent with the latest requirements Through this ongoing review and optimization process, the Board of Directors promoted continuous improvement in the Bank’s ESG management and created long-term value for stakeholders 119 Governance 2024 ESG REPORT OF CHINA BOHAI BANK Prudence as Principle: Risk Control as the Lifeline The Bank adheres to strict business policies that set its risk control capability as the boundary and enhanced portfolio management by authorizations and processes control, strengthens policy guidance, and improves the comprehensive risk management system It also optimizes its unifi ed comprehensive credit system, accelerates the construction of its key systems to assist on decision-making, upgrades its risk control strategies, optimizes its risk control tools, and carries out unifi ed post-credit monitoring, so as to effectively fortify its risk control defenses (I) Continuously Improve the Risk Management Framework In 2024, the Bank published the Measures For Comprehensive Risk Management of CHINA BOHAI BANK CO, LTD, which further improves comprehensive risk management policy and system, and builds up a risk management system with sound organizational structure and clear terms of duties The Board of Directors assumes the ultimate responsibility for comprehensive risk management The Board of Supervisors assumes the responsibility for supervision over comprehensive risk management The senior management assumes the responsibility for implementation of comprehensive risk management The Risk Management and Green Finance Committee under the Board of Directors has established communication channels with other special committees under the Board of Directors, including the Development Strategy and Inclusive Finance Committee, the Audit and Consumer Rights Protection Committee and the Nomination and Remuneration Committee, so as to ensure suffi cient information sharing and support decision- making in relation to risk management The Risk Management Department under the senior management has established communication channels with other special committees under the senior management, so as to ensure suffi cient information sharing and support decision-making in relation to risk management The Bank continues to promote the construction of centralized risk management, aiming to achieve the goals of risk management through the “three lines of defense” The risk prevention and control mechanism has been further improved The independent checks and balances of risk control system have been continuously strengthened The fi rst line of defense of risk management is formed by various business departments of the Bank, which are directly responsible for carrying out their risk management functions The second line of defense is departments of risk management line, which assume responsibilities for formulating policies and procedures, supervising and managing risk The third line of defense of risk management is the audit departments, which assumes audit responsibilities for the performance of the fi rst and second lines of defense 120 2024 ESG REPORT OF CHINA BOHAI BANK Governance (II) Formulating Risk Management Strategies, Risk Appetite and Risk Limits The Bank has enhanced the analysis on overseas and domestic economic condition, and diligently studied national macroeconomic policies and financial regulatory policies Based on its own condition and external environment, the Bank has formulated the 2024 risk management strategy, and reviewed risk appetite and determined the 2024 risk appetite based on the changes in business scale, complexity and risk condition The Bank comprehensively optimized limit control, and set the 2024 risk limits for credit risk, country risk, liquidity risk, market risk and interest rate risk in the banking book etc The Bank evaluated and updated its risk limit management plan, monitored, reported and managed the implementation of risk limit indicators, and reported the implementation of risk limit to the senior management and the Board (III) Strengthening the Management of a Variety of Material Risks In 2024, the Bank incorporated various types of business, credit risk borne by various customers, market risk, liquidity risk, operational risk, country risk, bank book interest rate risk, reputation risk, strategic risk, information technology risk, ESG risk, concentration risk and other risks into the scope of comprehensive risk management, so as to ensure that various risks can be effectively identified and managed, and the risk level can meet regulatory requirements The Bank implemented the requirements of the “Three Measures” issued by the China Banking and Insurance Regulatory Commission, comprehensively revised and improved the risk management systems of various businesses, formulated the 2024-2025 credit policy, and implemented the “five priorities” The industry, regional and customer structures were continuously optimized, and the guiding role of the risk policy continued to be strengthened Risk process optimization was promoted, control over key links was strengthened, and unified comprehensive credit management was continuously optimized Risk control tools were upgraded, and the construction of key projects such as a new-generation credit risk management platform and a collateral information management system was further advanced The development of risk models for wholesale and retail businesses was accelerated, and the preliminary effectiveness of model-assisted decision-making was demonstrated The ability to manage risks digitally continued to improve, supporting front-line business operations The Bank improved the asset preservation management system and mechanism, strengthened the construction of a dedicated asset preservation team, established the Asset Resolution Department of the Head Office, and promoted relevant branches to accelerate the completion of tasks such as setting up institutions, supplementing personnel, and adjusting positions The Bank optimized the assessment mechanism for reducing the scale of problem assets and the disposal of cash collection, continuously strengthened the efforts of collection and disposal, and continued to improve the ability of problem collection and disposal 121 Governance 2024 ESG REPORT OF CHINA BOHAI BANK (IV) Promoting a Prudent Risk Culture In 2024, the Bank continued to deepen the implementation of a prudent risk culture featuring “comprehensive, proactive, agile and effective”, developed risk management concepts, value standards and professional ethics that were suitable for the Bank, established training, communication and supervision mechanisms, effectively conveyed the concept of comprehensive risk management, and promoted understanding and implementation by all employees In 2024, the Bank carried out risk management-related training for management and frontline employees, focused on cultivating employees' risk management capabilities, clearly defi ned the “boundary constraints” of risk management for business development, and cultivated and improved the risk management capabilities of all employees that match their positions and responsibilities 122 2024 ESG REPORT OF CHINA BOHAI BANK Governance Compliance as Bedrock: Integrity as the Cornerstone The Bank continued to strengthen the construction of our compliance system, independently developed a grid-based management system, established a misconduct monitoring model, actively improved our level of case prevention, focused on preventing operational risks, and comprehensively improved our level of compliant operations The Bank continued to spare no efforts in the guiding and safeguarding role of strict governance of the party in an all-round way, firmly shouldering the political responsibility of governing and ruling the party, and unswervingly maintaining strict discipline and combat corruption The Bank further promoted the effective implementation of anti-money laundering measures from the solid fulfi lment of basic obligations to achieve a signifi cant improvement in the ability and level of prevention and control of money laundering risks (I) Internal Control and Compliance The Bank has established a “four-in-one” internal control organization system consisting of process execution, functional management, second-line supervision and internal audit The Bank adheres to the principle of “comprehensive, whole- process, and whole-workforce” in internal control management, compliance support, operational risk prevention, case prevention and control, anti-money laundering management, business continuity management, auditing and inspection and other aspects, to promote compliant and orderly management and steady development of all operations In 2024, the Bank continued to improve the long-term mechanism of internal control and compliance management, optimized the internal control and compliance management structure, and strengthened segment management; improved the system and assessment system to improve the accuracy and effectiveness of internal control and compliance management assessment; strengthened case prevention management, established a grid-based employee management structure, and improved employee management efficiency; strengthened inspection management, coordinated the bank's on-site inspection work, and achieved organic integration of on-site inspection planning, organized the on-site inspection work of the Bank, and achieved organic linkage among the planning, execution and supervision of on-site inspections; strengthened rectifi cation supervision, increased accountability and responsibility, and focused precisely on violations; independently researched and developed a grid management system, continuously optimized the internal control and compliance model, and continuously improved the level of intelligence in internal control and compliance management; continued to compile and distribute the Internal Control and Compliance Risk Reminder, carried out various forms of internal control and compliance training, continuously improved employees’ awareness of compliance, and fostered a compliance culture 123 Governance 2024 ESG REPORT OF CHINA BOHAI BANK (II) Anti-Corruption Coordinating the establishing of the Party's work styles and integrity and the key works of anti-corruption throughout the year At the annual meeting on comprehensively and strictly governing the party, the Party Committee of the Head Offi ce made comprehensive arrangements for the establishment of a clean and honest party and anti-corruption work, studied and formulated the key tasks for the construction of a clean and honest party and anti-corruption work for 2024, clarified the key tasks in seven major areas, refined 18 specific tasks, established a task list, issued the list to the Bank and supervised and promoted the Party committees at all levels to fully implement each listed item Keeping a close eye on key holiday periods, persistently rectifying the issue of “four work styles’ The Bank kept a close eye on key nodes, issued notices on maintaining a positive work style and strict discipline and reminders on integrity to Party committees at all levels, organized all cadres and employees to study the typical case reports in relation to the violations of the spirit of the central authorities' eight-point requirement issued by the Central Commission for Discipline Inspection and Tianjin Municipal Commission for Discipline Inspection, and urges Party organizations at all levels to fulfil their primary responsibilities for establishing work styles and attaining satisfactory results in terms of discipline education and employee management The discipline inspection commissions were organized to strengthen supervision and inspection in key areas such as violations of regulations on dining and drinking, vehicle use, and reimbursement In 2024, the Bank carried out a total of 1,717 supervision and inspection activities, covering 3,305 locations Conducting precautionary education in a hierarchical manner to lay down solid cornerstones for the defensive ideological foundation The Bank held a precautionary education meeting, organized party members and leading cadres at the middle level and above to view the integrity education fi lms, including “Investigate Bribery and Corruptors Together”, “Warning Records of Typical Cases of State-owned Enterprises - Dependent on and Exploiting Each Other’ and “Engraved in the Heart”, and organized grassroots management personnel to watch “Warning Records of Typical Cases of Punishing New and Hidden Forms of Corruption” By strengthening the use of internal cases and continuously arranging discipline inspection committees to regularly sort out typical violations and disciplinary issues investigated by the Bank, we analyzed the causes of the cases and the lessons to be learned, and reported and disclosed them by name within the jurisdiction We compiled and printed a collection of warning 124 2024 ESG REPORT OF CHINA BOHAI BANK Governance education materials, kept a close eye on key nodes, organized all party members and cadres to study the relevant videos, articles and typical case reports issued by the Central Commission for Discipline Inspection and the Municipal Commission for Discipline Inspection, and urged them to always keep their discipline in check We have used the sharp sword of supervision to promote precise problem identifi cation and effective problem solving The Bank carried out two special inspections, adhered to the positioning of political inspections, fully implemented the work policy of ‘identifying problems, creating a sense of shock, promoting reform and promoting development’, carefully formulated an annual inspection work plan based on actual conditions, and focused on the implementation of the Party Central Committee’s decisions and arrangements at the grassroots level, irregularities and corruption among the masses, the construction of grassroots party organizations and party member teams, inspection and rectifi cation, and the use of results, focusing on identifying and rectifying problems such as political deviations in the performance of duties by the inspected party organizations A total of 102 problems have been identifi ed In-depth inspection and rectifi cation supervision and evaluation work has been carried out, with a total of 101 feedback comments, 51 problems identifi ed, and rectifi cation continuing to be promoted (III) Anti-Money Laundering The Bank has comprehensively consolidated the foundation of its anti-money laundering work, from solidly fulfi lling its basic anti-money laundering obligations to deepening the effectiveness of anti-money laundering management Through key measures such as optimizing management mechanisms, improving business systems, strengthening supervision and inspection, and focusing on improving quality, it has achieved a signifi cant improvement in its ability and level of prevention and control of money laundering risks In 2024, we continued to improve our anti-money laundering internal control system, revised various core systems such as the reporting of large and suspicious transactions and the management of anti-money laundering in cross-border business, and optimize the anti-money laundering management mechanism We strengthened institutional supervision and inspection, as well as research visits, to consolidate our internal anti-money laundering capabilities We attached great importance to the governance of the source of anti-money laundering problems, comprehensively carried out the batch improvement of customer information, and improved the quality of basic anti-money laundering data We have increased the capacity of anti-money laundering management technology, and based on system operation and key management issues, we have optimized the functions of the anti-money laundering system and transaction monitoring models in various ways We regularly implement money laundering risk assessments of business products to effectively identify and control the money laundering risks of new business products We earnestly fulfi lled our responsibilities 125 Governance 2024 ESG REPORT OF CHINA BOHAI BANK as a financial institution, carried out internal training to enhance the capabilities and knowledge of our employees, and organized various external publicity activities to raise the awareness of the public and our customers about risk prevention CASE Qingdao Branch has innovatively launched the ‘Anti-Money Laundering CSV Data Processing Procedure’ At the end of August 2024, the self-developed “Anti-Money Laundering CSV Data Processing Program” of the Qingdao Branch of the Bank offi cially commenced operation in accordance with relevant industry standards Backed by automation and intelligent technology, it signifi cantly improved the effi ciency and quality of anti- money laundering data processing The program is able to automatically perform a series of operations such as data segmentation, format conversion, file naming, and field translation, greatly simplifying the operation process First, it solved the problem of row limit encountered by Excel and WPS software when processing large amounts of data, and can automatically split files that exceed the limit; second, it implemented automatic conversion of CSV to Excel, and optimized the processing of long scientifi c counting, with fi rst-row locking and automatic column width adjustment; third, it automatically completed the Chinese mapping of table headers and documents according to the standards of the People’s Bank of China, ensuring the normativity and consistency of data processing 126 2024 ESG REPORT OF CHINA BOHAI BANK Independent limited assurance report Appendix 127 Independent limited assurance report 2024 ESG REPORT OF CHINA BOHAI BANK 128 2024 ESG REPORT OF CHINA BOHAI BANK Independent limited assurance report 129 Independent limited assurance report 2024 ESG REPORT OF CHINA BOHAI BANK 130 2024 ESG REPORT OF CHINA BOHAI BANK Independent limited assurance report 131 List of Important Systems for ESG-related Issues 2024 ESG REPORT OF CHINA BOHAI BANK List of Important Systems for ESG-related Issues Issues Names of System Risk Management Regulations on Environmental and Social Risk Management of the Credit Business of China Bohai Bank ESG Risk Management Policies of China Bohai Bank Co, Ltd Regulations on ESG Risk Management of the Credit Business of China Bohai Bank Employee Behavior Management Code of Professional Conduct for Practitioners of China Bohai Bank Employee Handbook of China Bohai Bank (2012 Edition) Anti-money Laundering Risk Management Policies on Money Laundering and Terrorist Financing of China Bohai Bank Co, Ltd Customer Identifi cation Management Measures of China Bohai Bank (2020 Second Revision) Large Transaction and Suspicious Transaction Reporting Management Measures of China Bohai Bank (2024 Revision) Anti-corruption The Implementation Plan of China Bohai Bank’s Party Committee on Integrally Promoting the Dare Not to be Corrupt, Cannot be Corrupt and Do Not Want to be Corrupt Internal Audit Internal Audit Charter of China Bohai Bank Co, Ltd (2022 Revision) Internal Audit Policies and Procedures of China Bohai Bank Co, Ltd (2022 Revision) Information Security Network Security Management Measures of China Bohai Bank Special Virtual Network Management Measures of China Bohai Bank Internet Assets Security Management Measures of China Bohai Bank Network Security Vulnerability Management Measures of China Bohai Bank Network Security Monitoring Management Measures of China Bohai Bank Terminal Security Management Measures of China Bohai Bank Information System Security Development Life Cycle Management Measures of China Bohai Bank 132 2024 ESG REPORT OF CHINA BOHAI BANK List of Important Systems for ESG-related Issues Information System Cryptographic and Keys Management Measures of China Bohai Bank Data Security Classifi cation Implementation Rules of China Bohai Bank Data Life Cycle Security Management Implementation Rules of China Bohai Bank Data Security Assessment Implementation Rules of China Bohai Bank Third-party Data Cooperation Security Management Implementation Rules of China Bohai Bank Data Export Security Management Implementation Rules of China Bohai Bank Data De-sensitization Implementation Rules of China Bohai Bank Destruction of Data Storage Media Implementation Rules of China Bohai Bank Data Security Incident Contingency Plan of China Bohai Bank Data Security Management Measures of China Bohai Bank (2023 Revision) Consumer Rights Protection Work Plan for the Protection of Financial Consumer Rights of China Bohai Bank Co, Ltd (2021-2025) Consumer Rights Protection Management Measures of China Bohai Bank Co, Ltd (2023 Revision) Administrative Measures for Review on Financial Consumer Rights Protection of China Bohai Bank (2024 Revision) Consumer Rights Protection Information Disclosure and Inquiry Management Measures of China Bohai Bank (2024 Revision) Sales Behaviors Traceability Management Measures of China Bohai Bank Customer Personal Financial Information Protection Management Measures of China Bohai Bank (2024 Revision) Management Rules on Data Protection for Children Customers of China Bohai Bank Consumer Complaint Handling Management Measures of China Bohai Bank (2024 Revision) Operating Procedures for Handling Consumer Complaints of China Bohai Bank (Trial) Guidelines for Diversifi ed Settlement of Financial Disputes of China Bohai Bank Notice on Further Clarifying the Diversifi ed Settlement of Financial Disputes Administrative Measures for Internal Training on Consumer Rights Protection of China Bohai Bank Administrative Measures for the Certifi cation of Consumer Rights Protection Staff of China Bohai Bank (Trial) Administrative Measures for Financial Education and Publicity of China Bohai Bank (2023 Revision) Administrative Measures for Public Welfare Promotional Materials for Consumer Rights Protection of China Bohai Bank (Trial) 133 List of Important Systems for ESG-related Issues 2024 ESG REPORT OF CHINA BOHAI BANK Administrative Measures for Consumer Rights Protection Assessment of China Bohai Bank (2024 Revision) Evaluation Measures for Handling Consumer Complaints of China Bohai Bank (2024 Revision) Terms of Reference of the Consumer Rights Protection Working Committee of China Bohai Bank (2024 Second Revision) Notice on Further Clarifi cation on Staffi ng Requirements for Consumer Rights Protection in Branches Guidelines on Establishing Consumer Rights Protection Culture of China Bohai Bank Administrative Measures for Internal Oversight and Accountability on Consumer Rights Protection of China Bohai Bank (2024 Revision) Coordination Mechanism for Protection of Consumer Rights of China Bohai Bank Implementation Measures for Rectification and Follow-up of Supervisory Evaluation Opinions on Protection of Consumer Rights of China Bohai Bank Consumer Rights Protection Response Plan for Major Emergencies of China Bohai Bank (2022 Revision) Emergency Response Plan for Major Consumer Complaints of China Bohai Bank (2024 Revision) Emergency Response Plan for Customer Personal Financial Information Protection Emergencies of China Bohai Bank (2022 Revision) Recruitment and Employment Operational Procedures for Personnel Administration of China Bohai Bank (2024 Revision) Selection and Employment Measures for Middle-level and Senior Management Personnel of China Bohai Bank (2023 Revision) Selection and Employment Measures for Grass-roots Management Personnel of China Bohai Bank (2023 Revision) Administrative Measures for Employees’ Exit of China Bohai Bank (Trial) Green Finance Guidance on Further Promoting the Development of Green Finance Business of China Bohai Bank Green Finance Analysis Report of China Bohai Bank and Action Plan for Wholesale Business Development (2023-2025) Management Measures for the Proceeds from Green Financial Bonds of China Bohai Bank Carbon Emission Rights Pledge Financing Business Management Measures of China Bohai Bank (Trial) 134 2024 ESG REPORT OF CHINA BOHAI BANK Index of the Environmental, Social and Governance Reporting Code of the Stock Exchange Index of the Environmental, Social and Governance Reporting Code of the Stock Exchange Major performance indicators Guidance requirements Relevant section or paragraph Governance Structure Mandatory The board’s oversight of ESG issues P116-P119 disclosure The board’s ESG management approach and strategy, including the process used to evaluate, prioritize and Mandatory P118 manage material ESG-related issues (including risks to disclosure businesses) How the board reviews progress made against ESG- Mandatory related goals and targets with an explanation of how P119 disclosure they relate to the businesses A Environmental Aspect A1: Emissions Policies and compliance with relevant laws and regulations that have a significant impact on the General issuer relating to air and greenhouse Comply or P19 Disclosure gas emissions, discharges into explain P53-P54 water and land, and generation of hazardous and non-hazardous waste The types of emiss ions and Comply or KPI A11 P19 respective emissions data explain Direct (Scope 1) and energy indirect (Scope 2) greenhouse gas Comply or KPI A12 emissions (in tonnes) and, where P19 explain appropriate, intensity (eg per unit of production volume, per facility) 135 Index of the Environmental, Social and Governance Reporting Code of the 2024 ESG REPORT OF CHINA BOHAI BANK Stock Exchange Total hazardous waste produced (in tonnes) and, where appropriate, Comply or KPI A13 P19 intensity (eg per unit of production explain volume, per facility) To ta l non -haza rdous was te produced (in tonnes) and, where Comply or KPI A14 P19 appropriate, intensity (eg per unit of explain production volume, per facility) Description of emissions target(s) set Comply or P34-P38 KPI A15 and steps taken to achieve them explain P48-P54 Description of how hazardous and non-hazardous wastes are handled, Comply or KPI A16 and a description of reduction explain P20 target(s) set and steps taken to achieve them Aspect A2: Use of Resources Policies on the efficient use of General resources, including energy, water Comply or P53 Disclosure and other raw materials explain Direct and/or indirect energy consumption by type (eg electricity, Comply or KPI A21 gas or oil) in total (kWh in ’000s) and P20 explain intensity (eg per unit of production volume, per facility) Water consumption in total and Comply or KPI A22 intensity (eg per unit of production P20 explain volume, per facility) 136 2024 ESG REPORT OF CHINA BOHAI BANK Index of the Environmental, Social and Governance Reporting Code of the Stock Exchange Description of energy use efficiency Comply or KPI A23 target(s) set and steps taken to P53-P54 explain achieve them Description of whether there is any issue in sourcing water that is fit for Comply or KPI A24 purpose, water efficiency target(s) P53 explain set and steps taken to achieve them Total packaging material used for This indicator is not applicable as the finished products (in tonnes) and, if Comply or KPI A25 Bank is a financial institution rather applicable, with reference to per unit explain than a manufacturing enterprise produced Aspect A3: The Environment and Natural Resources P o l i c i e s o n m i n i m i z i n g t h e General Comply or issuer’s significant impacts on the P53-P54 disclosure explain environment and natural resources Description of the significant impacts of activities on the environment and Comply or KPI A31 P36-P54 natural resources and the actions explain taken to manage them Aspect A4: Climate Change Policies on identif ication and mitigation of significant climate- General Comply or related issues which have impacted, P37-P44 disclosure explain and those which may impact, the issuer Description of the significant climate- related issues which have impacted, Comply or KPI A41 and those which may impact, the P41-P47 explain issuer, and the actions taken to manage them 137 Index of the Environmental, Social and Governance Reporting Code of the 2024 ESG REPORT OF CHINA BOHAI BANK Stock Exchange B Social Employment and Labor Practices Aspect B1: Employment Information on the policies and compliance with relevant laws and regulations that have a significant impact on the issuer relating to General compensation and dismissal, Comply or Disclosure P96-P99 rec ru i tmen t and p romot ion , explain working hours, rest per iods, equal opportunity, diversity, anti- discrimination, and other benefits and welfare To ta l wo rk fo rce by gende r, employment type (for example, Comply or KPI B11 P21 full- or part-time), age group and explain geographical region Employee turnover rate by gender, Comply or KPI B12 P21 age group and geographical region explain Aspect B2: Health and Safety Information on the policies and compliance with relevant laws and regulations that have a significant General Comply or impact on the issuer relating to P98-P99 Disclosure explain providing a safe working environment and protecting employees from occupational hazards Number and rate of work-related fatalities occurred in each of the past Comply or KPI B21 Not applicable to the Bank three years including the reporting explain year 138 2024 ESG REPORT OF CHINA BOHAI BANK Index of the Environmental, Social and Governance Reporting Code of the Stock Exchange Comply or KPI B22 Lost days due to work injury Not applicable to the Bank explain Description of occupational health and safety measures adopted, and Comply or KPI B23 P98-P99 how they are implemented and explain monitored Aspect B3: Development and Training Policies on improving employees’ General knowledge and skills for discharging Comply or P97-P98 Disclosure duties at work Description of explain training activities The percentage of employees trained by gender and employee Comply or KPI B31 P22 category (eg senior management, explain middle management) The average t ra in ing hours Comply or KPI B32 completed per employee by gender P22 explain and employee category Aspect B4: Labor Standards Information on the policies and compliance with relevant laws and General Comply or regulations that have a significant P98-P99 Disclosure explain impact on the issuer relating to preventing child and forced labor Description of measures to review Comply or KPI B41 employment practices to avoid child P98-P99 explain and forced labor Description of steps taken to Comply or KPI B42 eliminate such practices when P98-P99 explain discovered 139 Index of the Environmental, Social and Governance Reporting Code of the 2024 ESG REPORT OF CHINA BOHAI BANK Stock Exchange Operating Practices Aspect B5: Supply Chain Management General Policies on managing environmental Comply or P54 Disclosure and social risks of the supply chain explain P102-P103 Number of suppliers by geographical Comply or KPI B51 P23 region explain Description of practices relating to engaging suppliers, number of Comply or KPI B52 suppliers where the practices are P102-P193 explain being implemented, and how they are implemented and monitored Description of practices used to identify environmental and social Comply or P54 KPI B53 risks along the supply chain, and explain how they are implemented and P102-P103 monitored Description of practices used to promote environmentally preferable Comply or KPI B54 products and serv ices when P54 explain selecting suppliers, and how they are implemented and monitored Aspect B6: Product Responsibility Information on the policies and compliance with relevant laws and regulations that have a significant General impact on the issuer relating to Comply or P85-P95 Disclosure health and safety, advertising, explain labeling and privacy matters relating to products and services provided and methods of redress 140 2024 ESG REPORT OF CHINA BOHAI BANK Index of the Environmental, Social and Governance Reporting Code of the Stock Exchange Percentage of total products sold or This indicator is not applicable as the Comply or KPI B61 shipped subject to recalls for safety Bank is a financial institution rather explain and health reasons than a manufacturing enterprise Number of products and service Comply or P90 KPI B62 related complaints received and explain P92-P94 how they are dealt with Description of practices relating to Comply or KPI B63 observing and protecting intellectual P123 explain property rights This indicator is not applicable as the Description of quality assurance Comply or KPI B64 Bank is a financial institution rather process and recall procedures explain than a manufacturing enterprise Description of consumer data protection and privacy policies, and Comply or KPI B65 P91-P92 how they are implemented and explain monitored Aspect B7: Anti-corruption Information on the policies and compliance with relevant laws and General regulations that have a significant Comply or P124-P125 Disclosure impact on the issuer relating to explain P126 bribery, extortion, fraud and money laundering Number of concluded legal cases regarding corrupt practices brought Comply or KPI B71 against the issuer or its employees Not applicable to the Bank explain during the reporting period and the outcomes of the cases 141 Index of the Environmental, Social and Governance Reporting Code of the 2024 ESG REPORT OF CHINA BOHAI BANK Stock Exchange Description of preventive measures and whistle-blowing procedures, Comply or KPI B72 P120-P122 and how they are implemented and explain monitored Description of anti-corruption training Comply or KPI B73 P124-P125 provided to directors and staff explain Community Aspect B8: Community Investment Policies on community engagement to understand the needs of the General communities where the issuer Comply or P57-P84 Disclosure operates and to ensure its activities explain take in to cons ide ra t ion the communities’ interests Focus areas of contribution (eg Comply or KPI B81 education, environmental concerns, P104-P108 explain labor needs, health, culture, sport) Resources contributed (eg time or Comply or KPI B82 P104-P108 money) to the focus area explain 142 2024 ESG REPORT OF CHINA BOHAI BANK Index of the International Financial Reporting Standard S2 – Climate-Related Disclosures Index of the International Financial Reporting Standard S2 – Climate-Related Disclosures Core content Relevant section or paragraph Governance 6(a) The governance body(s) (which can include a board, committee or equivalent body charged with governance) or individual(s) responsible for oversight of climate-related risks and opportunities How responsibilities for climate-related risks and opportunities are P36-P37 refl ected in the terms of reference, mandates, role descriptions and other P116-P119 related policies applicable to that body(s) or individual(s) How the body(s) or individual(s) determines whether appropriate skills and competencies are available or will be developed to oversee strategies P116-P118 designed to respond to climate-related risks and opportunities How and how often the body(s) or individual(s) is informed about climate- P116-P118 related risks and opportunities How the body(s) or individual(s) takes into account climate-related risks and opportunities when overseeing the entity’s strategy, its decisions on major transactions and its risk management processes and related P41-P47 policies, including whether the body(s) or individual(s) has considered trade-offs associated with those risks and opportunities How the body(s) or individual(s) oversees the setting of targets related to climate-related risks and opportunities, and monitors progress towards P41-P47 those targets, including whether and how related performance metrics are P116-P119 included in remuneration policies 6(b) Management’s role in the governance processes, controls and procedures used to monitor, manage and oversee climate-related risks and opportunities Whether the role is delegated to a specifi c management-level position or management-level committee and how oversight is exercised over that P36-P37 position or committee 143 Index of the International Financial Reporting Standard S2 – Climate-Related 2024 ESG REPORT OF CHINA BOHAI BANK Disclosures Whether management uses controls and procedures to support the oversight of climate-related risks and opportunities and, if so, how these P36-P37 controls and procedures are integrated with other internal functions Strategy Climate-related risks and opportunities 10(a) Describe climate-related risks and opportunities that could P41-P46 reasonably be expected to affect the entity’s prospects 10(b) Explain, for each climate-related risk the entity has identified, whether the entity considers the risk to be a climate-related physical risk P41-P44 or climate-related transition risk 10(c) Specify, for each climate-related risk and opportunity the entity has identified, over which time horizons—short, medium or long term—the P42-P44 effects of each climate-related risk and opportunity could reasonably be expected to occur 10(d) Explain how the entity defi nes “short term”, “medium term” and “long term” and how these defi nitions are linked to the planning horizons used P42-P44 by the entity for strategic decision-making Business model and value chain 13(a) A description of the current and anticipated effects of climate-related P41-P46 risks and opportunities on the entity’s business model and value chain 13(b) A description of where in the entity’s business model and value chain climate-related risks and opportunities are concentrated (for P41-P46 example, geographical areas, facilities and types of assets) Strategy and decision-making 14(a) Information about how the entity has responded to, and plans to respond to, climate-related risks and opportunities in its strategy and decision-making, including how the entity plans to achieve any climate- related targets it has set and any targets it is required to meet by law or regulation 144 2024 ESG REPORT OF CHINA BOHAI BANK Index of the International Financial Reporting Standard S2 – Climate-Related Disclosures Current and anticipated changes to the entity’s business model, including its resource allocation, to address climate-related risks and opportunities (for example, these changes could include plans to manage or decommission carbon-, energy- or water-intensive operations; resource P48-P52 allocations resulting from demand or supply-chain changes; resource allocations arising from business development through capital expenditure or additional expenditure on research and development; and acquisitions or divestments) Current and anticipated direct mitigation and adaptation efforts (for This indicator is not applicable as example, through changes in production processes or equipment, the Bank is a financial institution relocation of facilities, workforce adjustments, and changes in product rather than a manufactur ing specifi cations) enterprise Current and anticipated indirect mitigation and adaptation efforts (for P48-P52 example, through working with customers and supply chains) P53-P54 Any climate-related transition plan the entity has, including information P48-P52 about key assumptions used in developing its transition plan, and P53-P54 dependencies on which the entity’s transition plan relies How the entity plans to achieve any climate-related targets, including any greenhouse gas emissions targets, described in accordance with P48-P54 paragraphs 33–36 14(b) Information about how the entity is resourcing, and plans to resource, the activities disclosed in accordance with paragraph 14(a) P48-P54 14(c) Quantitative and qualitative information about the progress of plans disclosed in previous reporting periods in accordance P48-P54 with paragraph 14(a) Financial position, fi nancial performance and cash fl ows As the disclosure of this indicator will 16(a) How climate-related risks and opportunities have affected its require the Bank to incur undue cost fi nancial position, fi nancial performance and cash fl ows for the reporting or effort, it is planned to be disclosed period in the future when the Bank has more capacity and resources 145 Index of the International Financial Reporting Standard S2 – Climate-Related 2024 ESG REPORT OF CHINA BOHAI BANK Disclosures As the disclosure of this indicator will 16(b) The climate-related risks and opportunities identifi ed in paragraph require the Bank to incur undue cost 16(a) for which there is a signifi cant risk of a material adjustment within or effort, it is planned to be disclosed the next annual reporting period to the carrying amounts of assets and in the future when the Bank has liabilities reported in the related fi nancial statements more capacity and resources 16(c) How the entity expects its fi nancial position to change over the short, medium and long term, given its strategy to manage climate-related risks As the disclosure of this indicator and opportunities, taking into consideration: its investment and disposal will require the Bank to incur plans (for example, plans for capital expenditure, major acquisitions undue cost or effort, it is planned and divestments, joint ventures, business transformation, innovation, to be disclosed in the future when new business areas, and asset retirements), including plans the entity the Bank has more capacity and is not contractually committed to, and its planned sources of funding to resources implement its strategy 16(d) How the entity expects its financial performance and cash flows As the disclosure of this indicator to change over the short, medium and long term, given its strategy to will require the Bank to incur manage climate-related risks and opportunities (for example, increased undue cost or effort, it is planned revenue from products and services aligned with a lower-carbon to be disclosed in the future when economy; costs arising from physical damage to assets from climate the Bank has more capacity and events; and expenses associated with climate adaptation or mitigation) resources Climate resilience 22(a) The entity’s assessment of its climate resilience as at the reporting date: (1) the implications, if any, of the entity’s assessment for its strategy and business model, including how the entity would need to respond to the effects identified in the climate-related scenario analysis; (2) the signifi cant areas of uncertainty considered in the entity’s assessment of As the disclosure of this indicator its climate resilience; (3) the entity’s capacity to adjust or adapt its strategy will require the Bank to incur and business model to climate change over the short, medium and long undue cost or effort, it is planned term, including: the availability of, and flexibility in, the entity’s existing to be disclosed in the future when financial resources to respond to the effects identified in the climate- the Bank has more capacity and related scenario analysis, including to address climate-related risks and resources to take advantage of climate-related opportunities; the entity’s ability to redeploy, repurpose, upgrade or decommission existing assets; and the effect of the entity’s current and planned investments in climate-related mitigation, adaptation and opportunities for climate resilience 146 2024 ESG REPORT OF CHINA BOHAI BANK Index of the International Financial Reporting Standard S2 – Climate-Related Disclosures 22(b) How and when the climate-related scenario analysis was carried out: (1) information about the inputs the entity used, including: which climate-related scenarios the entity used for the analysis and the sources of those scenarios; whether the analysis included a diverse range of climate-related scenarios; whether the climate-related scenarios used for the analysis are associated with climate-related transition risks or climate- related physical risks; whether the entity used, among its scenarios, a climate-related scenario aligned with the latest international agreement on climate change; why the entity decided that its chosen climate-related scenarios are relevant to assessing its resilience to climate-related P39-P47 changes, developments or uncertainties; the time horizons the entity used in the analysis; and what scope of operations the entity used in the analysis (for example, the operating locations and business units used in the analysis); (2) the key assumptions the entity made in the analysis, including: climate-related policies in the jurisdictions in which the entity operates; macroeconomic trends; national- or regional-level variables (for example, local weather patterns, demographics, land use, infrastructure and availability of natural resources); energy usage and mix; and developments in technology; (3) the reporting period in which the climate- related scenario analysis was carried out Risk management 25(a) The processes and related policies the entity uses to identify, assess, prioritize and monitor climate-related risks, including information about: the inputs and parameters the entity uses (for example, information about data sources and the scope of operations covered in the processes); whether and how the entity uses climate-related scenario analysis to inform its identifi cation of climate-related risks; how the entity P36-P37 assesses the nature, likelihood and magnitude of the effects of those risks P41-P47 (for example, whether the entity considers qualitative factors, quantitative thresholds or other criteria); whether and how the entity prioritizes climate- related risks relative to other types of risk; how the entity monitors climate- related risks; and whether and how the entity has changed the processes it uses compared with the previous reporting period 147 Index of the International Financial Reporting Standard S2 – Climate-Related 2024 ESG REPORT OF CHINA BOHAI BANK Disclosures 25(b) The processes the entity uses to identify, assess, prioritize and monitor climate-related opportunities, including information about whether P41-P47 and how the entity uses climate-related scenario analysis to inform its identifi cation of climate-related opportunities 25(c) The extent to which, and how, the processes for identifying, assessing, prioritizing and monitoring climate-related risks and P41 opportunities are integrated into and inform the entity’s overall risk management process Metrics and targets Climate-related metrics 29(a) Greenhouse gases—the entity shall: (1) disclose its absolute gross greenhouse gas emissions generated during the reporting period, expressed as metric tonnes of CO2 equivalent (see paragraphs B19– B22), classified as: Scope 1 greenhouse gas emissions; Scope 2 As the disclosure of the indicator of greenhouse gas emissions; and Scope 3 greenhouse gas emissions; (2) Scope 3 greenhouse gas emissions disclose the approach it uses to measure its greenhouse gas emissions will require the Bank to incur (see paragraphs B26–B29) including: the measurement approach, undue cost or effort, it is planned inputs and assumptions the entity uses to measure its greenhouse gas to be disclosed in the future when emissions; the reason why the entity has chosen the measurement the Bank has more capacity and approach, inputs and assumptions it uses to measure its greenhouse resources gas emissions; and any changes the entity made to the measurement approach, inputs and assumptions during the reporting period and the reasons for those changes As the disclosure of this indicator will require the Bank to incur 29(b) Climate-related transition risks—the amount and percentage of undue cost or effort, it is planned assets or business activities vulnerable to climate-related transition risks to be disclosed in the future when the Bank has more capacity and resources 148 2024 ESG REPORT OF CHINA BOHAI BANK Index of the International Financial Reporting Standard S2 – Climate-Related Disclosures As the disclosure of this indicator will require the Bank to incur undue cost 29(c) Climate-related physical risks—the amount and percentage of or effort, it is planned to be disclosed assets or business activities vulnerable to climate-related physical risks in the future when the Bank has more capacity and resources As the disclosure of this indicator will require the Bank to incur undue cost 29(d) Climate-related opportunities—the amount and percentage of or effort, it is planned to be disclosed assets or business activities aligned with climate-related opportunities in the future when the Bank has more capacity and resources 29(e) Capital deployment—the amount of capital expenditure, fi nancing or P48 investment deployed towards climate-related risks and opportunities 29(f) Internal carbon prices—the entity shall disclose an explanation As the disclosure of this indicator will of whether and how the entity is applying a carbon price in decision- require the Bank to incur undue cost making (for example, investment decisions, transfer pricing and scenario or effort, it is planned to be disclosed analysis); and the price for each metric tonne of greenhouse gas in the future when the Bank has emissions the entity uses to assess the costs of its greenhouse gas more capacity and resources emissions 29(g) Remuneration—the entity shall disclose a description of whether As the disclosure of this indicator will and how climate-related considerations are factored into executive require the Bank to incur undue cost remuneration (see also paragraph 6(a)(v)); and the percentage of or effort, it is planned to be disclosed executive management remuneration recognized in the current period in the future when the Bank has that is linked to climate-related considerations more capacity and resources Climate-related metrics 33 An entity shall disclose the quantitative and qualitative climate-related targets it has set to monitor progress towards achieving its strategic goals, and any targets it is required to meet by law or regulation, including any greenhouse gas emissions targets P35 33(a) The metric used to set the target (see paragraphs B66–B67) P48 149 Index of the International Financial Reporting Standard S2 – Climate-Related 2024 ESG REPORT OF CHINA BOHAI BANK Disclosures 33(b) The objective of the target (for example, mitigation, adaptation or P35 conformance with science-based initiatives) P48 33(c) The part of the entity to which the target applies (for example, P35 whether the target applies to the entity in its entirety or only a part of the P48 entity, such as a specifi c business unit or specifi c geographical region) P35 33(d) The period over which the target applies P48 P35 33(e) The base period from which progress is measured P48 P35 33(f) Any milestones and interim targets P48 33(g) If the target is quantitative, whether it is an absolute target or an P35 intensity target P48 33(h) How the latest international agreement on climate change, including P35 jurisdictional commitments that arise from that agreement, has informed P48 the target 34 An entity shall disclose information about its approach to P35 setting and reviewing each target, and how it monitors progress against each target P48 34(a) Whether the target and the methodology for setting the target has P35 been validated by a third party P48 P35 34(b) The entity’s processes for reviewing the target P48 P35 34(c) The metrics used to monitor progress towards reaching the target P48 P35 34(d) Any revisions to the target and an explanation for those revisions P48 150 2024 ESG REPORT OF CHINA BOHAI BANK Index of the International Financial Reporting Standard S2 – Climate-Related Disclosures 35 An entity shall disclose information about its performance P35 against each climate-related target and an analysis of trends or changes in the entity’s performance P48 36 For each greenhouse gas emissions target disclosed in P19 accordance with paragraphs 33–35, an entity shall disclose the following information P48 P19 36(a) Which greenhouse gases are covered by the target P48 36(b) Whether Scope 1, Scope 2 or Scope 3 greenhouse gas emissions P19 are covered by the target P48 36(c) Whether the target is a gross greenhouse gas emissions target or net greenhouse gas emissions target If the entity discloses a net P19 greenhouse gas emissions target, the entity is also required to separately P48 disclose its associated gross greenhouse gas emissions target (see paragraphs B68–B69) 36(d) Whether the target was derived using a sectoral decarbonization P35-P40 approach 36(e) The entity’s planned use of carbon credits to offset greenhouse gas emissions to achieve any net greenhouse gas emissions target In explaining its planned use of carbon credits the entity shall disclose information including, and with reference to paragraphs B70–B71: the extent to which, and how, achieving any net greenhouse gas emissions As the disclosure of this indicator will target relies on the use of carbon credits; which third-party scheme(s) require the Bank to incur undue cost will verify or certify the carbon credits; the type of carbon credit, or effort, it is planned to be disclosed including whether the underlying offset will be nature-based or based in the future when the Bank has on technological carbon removals, and whether the underlying offset is more capacity and resources achieved through carbon reduction or removal; and any other factors necessary for users of general purpose financial reports to understand the credibility and integrity of the carbon credits the entity plans to use (for example, assumptions regarding the permanence of the carbon offset) 151 GRI Content Index 2024 ESG REPORT OF CHINA BOHAI BANK GRI Content Index CHINA BOHAI BANK CO, LTD has reported the information cited in this GRI content Statement of use index for the period from January 1, 2024 to December 31, 2024 with reference to the GRI Standards GRI 1 used GRI 1: Foundation 2021 GRI Standard Disclosure Location 2-2 Entities included in the organization’s P1 sustainability reporting 2-3 Reporting period, frequency and contact point P1 P157 There are no signif icant 2-4 Restatements of information changes to the reporting scope compared to previous years 2-5 External assurance P127-P131 2-6 Activities, value chain and other business P19 relationships P33-P84 P21-P22 2-7 Employees P96-P101 2-8 Workers who are not employees See the Bank’s annual report 2-9 Governance structure and composition P11-P12 2-10 Nomination and selection of the highest See the Bank’s annual report governance body 2-11 Chair of the highest governance body See the Bank’s annual report 2-12 Role of the highest governance body in overseeing the management of impacts P113-P119 2-13 Delegation of responsibility for managing impacts P113-P115 2-14 Role of the highest governance body in sustainability reporting P116-P118 152 2024 ESG REPORT OF CHINA BOHAI BANK GRI Content Index 2-15 Conflicts of interest See the Bank’s annual report 2-16 Communication of critical concerns P114-P115 2-17 Collective knowledge of the highest P114-P115 governance body P116-P119 2-18 Evaluation of the performance of the highest See the Bank’s annual report governance body 2-19 Remuneration policies P96 2-20 Process to determine remuneration See the Bank’s annual report 2-21 Annual total compensation ratio See the Bank’s annual report 2-22 Statement on sustainable development strategy P27-P28 2-23 Policy commitments P27-P28 P5-P8 2-24 Embedding policy commitments P27-P28 2-25 Processes to remediate negative impacts P41-P47 P120-P122 2-26 Mechanisms for seeking advice and raising P29-P32 concerns 2-27 Compliance with laws and regulations P20 P123 2-28 Membership associations P13-P16 2-29 Approach to stakeholder engagement P29-P32 3-1 Process to determine material topics P29 GRI 3: Material Topics 3-2 List of material topics P29 2021 3-3 Management of material topics P29 201-1 Direct economic value generated and distributed P19 GRI 201: 201-2 Financial implications and other risks and Economic P41-P47 opportunities due to climate change Performance 2016 201-3 Defined benefit plan obligations and other P96 retirement plans P98-P99 153 GRI Content Index 2024 ESG REPORT OF CHINA BOHAI BANK 202-1 Ratios of standard entry level wage by gender The Bank plans to gradually GRI 202: compared to local minimum wage disclose this in the future Market Presence 2016 202-2 Proportion of senior management hired from The Bank plans to gradually the local community disclose this in the future GRI 203: 203-1 Infrastructure investments and services P79-P84 Indirect supported Economic Impacts 2016 203-2 Significant indirect economic impacts P24 P87-P89 GRI 204: Procurement 204-1 Proportion of spending on local suppliers P23 Practices 2016 205-1 Operations assessed for risks related to P124-P125 corruption GRI 205: Anti-corruption 205-2 Communication and training about anti- P124-P125 2016 corruption policies and procedures 205-3 Confirmed incidents of corruption and actions P124-P125 taken GRI 206: Anti-competitive 206-1 Legal actions for anti-competitive behavior, Not applicable to the Bank Behavior anti-trust, and monopoly practices 2016 207-1 Approach to tax See the Bank’s annual report 207-2 Tax governance, control, and risk management See the Bank’s annual report GRI 207: Tax 207-3 Stakeholder engagement and management 2019 See the Bank’s annual report of concerns related to tax 207-4 Country-by-country reporting See the Bank’s annual report GRI 301: Materials 301-1 Materials used by weight or volume P20 2016 GRI 302: Energy 302-1 Energy consumption within the organization P20 2016 154 2024 ESG REPORT OF CHINA BOHAI BANK GRI Content Index 302-2 Energy consumption outside of the P35 organization P48-P52 302-3 Energy intensity P19 302-4 Reduction of energy consumption P35-P52 302-5 Reductions in energy requirements of P19 P53-P54 products and services P74-P78 GRI 303: Water and 303-1 Interactions with water as a shared resource P20 Effluents 2018 303-5 Water consumption P20 306-1 Waste generation and significant waste- P19 related impacts P20 306-2 Management of significant waste-related P20 impacts GRI 306: Waste 2020 306-3 Waste generated P19 P20 306-4 Waste diverted from disposal P19 P20 306-5 Waste directed to disposal P19 P20 308-2 Negative environmental impacts in the supply P54 chain and actions taken 401-1 New employee hires and employee turnover P21 GRI 401: 401-2 Benefits provided to full-time employees Employment that are not provided to temporary or part-time P97-P99 2016 employees 401-3 Parental leave P98-P99 GRI 402: Labor/ 402-1 Minimum notice periods regarding operational Management P98-P99 changes Relations 2016 155 GRI Content Index 2024 ESG REPORT OF CHINA BOHAI BANK 403-1 Occupational health and safety management P98-P101 system 403-3 Occupational health services P98-P101 GRI 403: Occupational 403-6 Promotion of worker health P98-P101 Health and Safety 2018 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business P98-P99 relationships 403-8 Workers covered by an occupational health P98-P99 and safety management system 404-1 Average hours of training per year per P22 employee GRI 404: Training and 404-2 Programs for upgrading employee skills and P97-P98 Education transition assistance programs 2016 404-3 Percentage of employees receiving regular P96 performance and career development reviews GRI 405: 405-1 Diversity of governance bodies and P23 Diversity and employees P96 Equal Opportunity 2016 405-2 Ratio of basic salary and remuneration of The Bank plans to gradually women to men disclose this in the future GRI 406: 406-1 Incidents of discrimination and corrective Non-discrimination P96 2016 actions taken GRI 413: Local 413-1 Operations with local community engagement, Communities P87-P89 2016 impact assessments, and development programs GRI 414: Supplier Social Assessment 414-1 New suppliers that were screened using P23 2016 social criteria GRI 416: Customer 416-1 Assessment of the health and safety impacts Health and Safety P90-P93 of product and service categories 2016 GRI 417: Marketing 417-1 Requirements for product and service P85-P86 and Labeling 2016 information and labeling P90-P92 156 2024 ESG REPORT OF CHINA BOHAI BANK Reader's Feedback Reader's Feedback Dear Readers, Hello! Thank you for reading We would like you to evaluate this report so as to improve the Bank’s sustainable development capabilities and ESG management standards Please put forward your valuable comments and suggestions during your busy schedule to facilitate the continuous improvement of our ESG report and our ESG efforts You may provide feedback through the following means: Fax: 022-58314881 Letter: Party and Mass Work Department, Bohai Bank, 218 Haihe East Road, Hedong District, Tianjin (Postal Code: 300012) E-mail: yjhao@cbhbcomcn Please give us your comments 1 Are you able to fully obtain the required information from this report? Yes Partly No 2 Does this report fully reflect the Bank’s environmental responsibilities and performance? Yes Partly No 3 Does this report fully reflect the Bank’s social responsibilities and performance? Yes Partly No 4 Does this report fully reflect the Bank’s governance responsibilities and performance? Yes Partly No 5 Does the layout design of this report meet your aesthetic requirements? Does it make your reading and understanding easier? Yes Partly No 6 If you have other comments and suggestions, please briefly describe them 157 Registered&office address:218 Haihe East RoadHedong District,Tianjin,PRC Postcode:300012 Telephone:86(22)5831 6666

REPORT CHINA OF BOHAI ESG

2025-04-29 15:35:31

Announcements & Notices

FF301 Monthly Return for Equity Issuer and Hong Kong Depositary Receipts listed under Chapter 19B of the Exchange Listing Rules on Movements in Securities For the month ended: 31 March 2025 Status: New Submission To : Hong Kong Exchanges and Clearing Limited Name of Issuer: CHINA BOHAI BANK CO, LTD Date Submitted: 03 April 2025 I Movements in Authorised / Registered Share Capital 1 Class of shares Ordinary shares Type of shares H Listed on the Exchange (Note 1) Yes Stock code (if listed) 09668 Description Number of authorised/registered shares Par value Authorised/registered share capital Balance at close of preceding month 6,200,555,000 RMB 1 RMB 6,200,555,000 Increase / decrease (-) 0 RMB 0 Balance at close of the month 6,200,555,000 RMB 1 RMB 6,200,555,000 2 Class of shares Other class (specify in description) Type of shares Other type (specify in description) Listed on the Exchange (Note 1) No Stock code (if listed) - Description Domestic Shares Number of authorised/registered shares Par value Authorised/registered share capital Balance at close of preceding month 11,561,445,000 RMB 1 RMB 11,561,445,000 Increase / decrease (-) 0 RMB 0 Balance at close of the month 11,561,445,000 RMB 1 RMB 11,561,445,000 Total authorised/registered share capital at the end of the month: RMB 17,762,000,000 Page 1 of 10 v 111 FF301 II Movements in Issued Shares and/or Treasury Shares 1 Class of shares Ordinary shares Type of shares H Listed on the Exchange (Note 1) Yes Stock code (if listed) 09668 Description Number of issued shares (excluding treasury shares) Number of treasury shares Total number of issued shares Balance at close of preceding month 6,200,555,000 0 6,200,555,000 Increase / decrease (-) 0 0 Balance at close of the month 6,200,555,000 0 6,200,555,000 2 Class of shares Ordinary shares Type of shares Other type(specify in description) Listed on the Exchange (Note 1) No Stock code (if listed) - Description Domestic Shares Number of issued shares (excluding treasury shares) Number of treasury shares Total number of issued shares Balance at close of preceding month 11,561,445,000 0 11,561,445,000 Increase / decrease (-) 0 0 Balance at close of the month 11,561,445,000 0 11,561,445,000 Page 2 of 10 v 111 FF301 III Details of Movements in Issued Shares and/or Treasury Shares (A) Share Options (under Share Option Schemes of the Issuer) Not applicable Page 3 of 10 v 111 FF301 (B) Warrants to Issue Shares of the Issuer Not applicable Page 4 of 10 v 111 FF301 (C) Convertibles (ie Convertible into Shares of the Issuer) Not applicable Page 5 of 10 v 111 FF301 (D) Any other Agreements or Arrangements to Issue Shares of the Issuer, including Options (other than Share Option Schemes) Not applicable Page 6 of 10 v 111 FF301 (E) Other Movements in Issued Shares and/or Treasury Shares Not applicable Page 7 of 10 v 111 FF301 IV Information about Hong Kong Depositary Receipt (HDR) Not applicable Page 8 of 10 v 111 FF301 V Confirmations Not applicable Submitted by: DU Gang Title: Joint Company Secretary (Director, Secretary or other Duly Authorised Officer) Page 9 of 10 v 111 FF301 Notes 1 The Exchange refers to The Stock Exchange of Hong Kong Limited 2 In the case of repurchase of shares (shares repurchased and cancelled) and redemption of shares (shares redeemed and cancelled), "date of event" should be construed as "cancellation date" In the case of repurchase of shares (shares held as treasury shares), "date of event" should be construed as "date on which shares were repurchased and held by the issuer in treasury" 3 The information is required in the case of repurchase of shares (shares repurchased for cancellation but not yet cancelled) and redemption of shares (shares redeemed but not yet cancelled) Please state the number of shares repurchased or redeemed during the month or in preceding month(s) but pending cancellation as at close of the month as a negative number 4 Items (i) to (viii) are suggested forms of confirmation The listed issuer may amend the item(s) that is/are not applicable to meet individual cases Where the issuer has already made the relevant confirmations in a return published under Main Board Rule 1325A / GEM Rule 1727A in relation to the securities issued, or the treasury shares sold or transferred, no further confirmation is required to be made in this return 5 “Identical” means in this context: ． the securities are of the same nominal value with the same amount called up or paid up; ． they are entitled to dividend/interest at the same rate and for the same period, so that at the next ensuing distribution, the dividend/interest payable per unit will amount to exactly the same sum (gross and net); and ． they carry the same rights as to unrestricted transfer, attendance and voting at meetings and rank pari passu in all other respects Page 10 of 10 v 111

ISSUER FOR SECURITIES ON IN

2025-04-03 14:01:40

Announcements & Notices

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement CHINA BOHAI BANK CO, LTD 渤海銀行股份有限公司 (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 9668) 2024 ANNUAL RESULTS ANNOUNCEMENT The Board of Directors (the “Board”) of CHINA BOHAI BANK CO, LTD (the “Bank”) hereby announces the audited consolidated results of the Bank and its subsidiary for the year ended December 31, 2024 This announcement, containing the full text of the 2024 annual report of the Bank, complies with the requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited relating to information to accompany preliminary announcements of annual results PUBLICATION OF ANNUAL RESULTS ANNOUNCEMENT AND ANNUAL REPORT The Chinese and English versions of this results announcement are available on the website of Hong Kong Exchanges and Clearing Limited ( wwwhkexnewshk) and the website of the Bank ( wwwcbhbcomcn) If there are any discrepancies in interpretations between the Chinese and English versions, the Chinese version shall prevail The printed version of the Bank’s 2024 annual report will be despatched to the holders of H shares of the Bank requiring printed copy subsequently and will be available for viewing on the website of Hong Kong Exchanges and Clearing Limited ( wwwhkexnewshk) and the website of the Bank ( wwwcbhbcomcn) in due course By order of the Board CHINA BOHAI BANK CO, LTD WANG Jinhong Chairman Tianjin, China March 26, 2025 As of the date of this announcement, the Board of the Bank comprises Mr WANG Jinhong and Mr QU Hongzhi as executive directors; Mr AU Siu Luen, Ms YUAN Wei, Mr DUAN Wenwu, Mr HU Aimin and Mr ZHANG Yunji as non-executive directors; and Mr TSE Yat Hong, Mr SHUM Siu Hung Patrick, Ms WANG Aijian, Mr LIU Junmin and Mr LIU Lanbiao as independent non-executive directors Annual Report 2024 Denitions 3 Group, our Group the Bank and its subsidiary H Shares the overseas listed foreign shares issued by the Bank with a nominal value of RMB100 each, which are subscribed for and traded in Hong Kong dollars and listed and traded on the Hong Kong Stock Exchange HKEX Hong Kong Exchanges and Clearing Limited Hong Kong Stock Exchange The Stock Exchange of Hong Kong Limited IFRS International Financial Reporting Standards and International Accounting Standards (“IAS”), the related standards, amendments and interpretations issued by the International Accounting Standards Board (“IASB”) Listing Rules the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited Model Code the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules Reporting Period the year ended December 31, 2024 SASAC the State-owned Assets Supervision and Administration Commission of the State Council (中華人民共和國國務院國有資產監督管理委員會) SFO the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) Tianjin SASAC the State-owned Assets Supervision and Administration Commission of Tianjin People’s Government CHINA BOHAI BANK CO, LTD Annual Report 2024 Chairman’s Statement 5 Chairman’s Statement The year 2024 marked the 75th anniversary of the founding of the People’s Republic of China, as well as a crucial year for China Bohai Bank to realize the goals and tasks of high-quality development and deepening reform, transformation and development The Bank diligently adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and fully studied and implemented the spirit of the important statements from General Secretary Xi Jinping on finance works and his important speech made during his visit to Tianjin Adhering to keeping political consciousness in mind and prioritizing the well-being of the people in the financial endeavours, with serving the real economy as fundamental purpose, the Bank focused on the implementation of the “five priorities”, thus continuously deepening and solidifying high-quality development with achievements consistently made In 2024, despite the extremely severe and complex internal and external business environment, we maintained a vigorous and proactive spirit, confronting challenges head-on Focusing on our core mission of high-quality development, our operations steadily progressed and improved in quality The year 2024 was a year of “progression” for China Bohai Bank Attributable to the enhanced Party building, the improving development momentum, the optimized business structure, the stronger customer base, the enriched product portfolio and the accumulated innovative power, the Bank recorded increase in both operating income and net profit Furthermore, deposit exceeded RMB1 trillion and asset quality remained stable, with stable outlook for international ratings The year 2025 is pivotal for China Bohai Bank to accelerate its high-quality development We will continue to study and implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, firmly implement the decisions and deployments of the Party Central Committee, insist on strengthening the Party’s overall leadership, exercise full and rigorous Party self-governance, and enhance the in-depth integration of Party building and business, thus paving a new path and promoting rejuvenation The Bank will strengthen its tactical capability to achieve strategic objectives, implement structural adjustment to achieve functional enhancement, and optimize its business model to achieve business system transformation The Bank will continuously strengthen fundamental management, optimize asset and liability planning and coordination, incur liabilities at low cost, optimize asset layout and refine capital management The Bank will also implement the building up of risk control compliance and digital transformation throughout its operations Furthermore, the Bank will promote the implementation of the “Nine-Five-Three-One” system Specifically, the Bank will focus on the transformation of the “Nine Major Banks”, thereby facilitating differentiated operation through specialized transformation The Bank will deeply implement the “Five Factories” approach in a more practical manner, focus on the construction of customer factory, product factory, collection factory, talent factory and branch factory, and promote stable and long-lasting operational development Moreover, the Bank will deepen the “Three Systems” reform, reshape the organizational structure, strengthen the appraisal-orientated operation, and optimize the remuneration allocation With the “One Core” in serving Tianjin as a demonstration, a role model will be set for the Bank in serving the real economy Taking actions to achieve results, our excellent performance will bring us success We will celebrate the 20th anniversary of China Bohai Bank with our outstanding achievements, and start a new chapter for the high-quality development of China Bohai Bank! WANG Jinhong Chairman March 26, 2025 CHINA BOHAI BANK CO, LTD Annual Report 2024 6 President’s Statement President’s Statement In 2024, the senior management of China Bohai Bank diligently adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and insisted on the general principle of pursuing progress while ensuring stability in accordance with the directives of the Party Committee of the head office and the Board of Directors Our senior management systematically implemented various works on transformation and development, with steady improvements in vitality, motivation, cohesion and major indicators, thus further solidifying the positive momentum of high-quality development In 2024, we were determined to fulfill our missionary commitment By intensifying and solidifying the “five priorities”, we continued to strengthen our customer base, innovate products and services, and upgrade business models, thus achieving new results in serving the real economy Leveraging on the implementation of business positioning of “Nine Major Banks”, and closely followed policy directions and industry trends, we iterated our operating concepts and management modes, and continued to improve quality and optimize structure, making new breakthroughs in high-quality development As of the end of the Reporting Period, our total assets amounted to RMB1,843842 billion, representing a year-on-year increase of 641%; and total liabilities amounted to RMB1,733717 billion, representing a year-on-year increase of 713% Net assets per share attributable to ordinary Shareholders of the Bank was RMB558, representing an increase of RMB026 as compared to the end of the previous year The non-performing loan ratio of the Bank was 176% Our development was stable as a whole Our achievements would not have been possible without the support of various parties These achievements are also attributable to the determination and hard work of the Bank’s cadres and employees We sincerely thank all sectors of society for their support and trust in China Bohai Bank, and we extend our gratitude to all our cadres and employees for their diligence, commitment, and contributions In 2025, the senior management of China Bohai Bank will continue to guide all cadres and employees in fully implementing the guiding principles from the 20th National Congress of the Communist Party of China (CPC) and the second and third plenary sessions of the 20th CPC Central Committee, and diligently adhering to the important statements from General Secretary Xi Jinping on finance works and the spirit of the Central Economic Work Conference Adhering to the decision and deployment of the CPC Central Committee and the State Council, we will fully comply with the work requirements of the regulatory policies and the Tianjin Committee of the CPC and Tianjin Municipal People’s Government As guided by the Party Committee of the head office, adhering to the basic principles of serving the real economy with financial services, we will insist on making the best use of existing resources, optimizing allocation of new resources and enhancing quality, and put every effort in completing various tasks and missions, thereby celebrating the 20th anniversary of China Bohai Bank with new achievements in the high-quality development of the Bank QU Hongzhi President March 26, 2025 CHINA BOHAI BANK CO, LTD Annual Report 2024 Statement of the Chairman of the Board of Supervisors 7 Statement of the Chairman of the Board of Supervisors The year 2024 marked the 75th anniversary of the founding of the People’s Republic of China It was a crucial year for further deepening reform comprehensively to advance Chinese modernization, as well as the opening year for China Bohai Bank to comprehensively push itself forward towards the goal of high-quality development As guided by the spirit of the third plenary session of the 20th CPC Central Committee, the Board of Supervisors of China Bohai Bank always adheres to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era Striving to the implementation of the decisions and deployments of the Party Central Committee as well as meeting the work requirements of the Tianjin Committee of the CPC and Tianjin Municipal People’s Government, with the construction of a financial power as its mission, the Board of Supervisors faithfully performed its duties under the laws and regulations and the Articles of Association of the Bank With a focus on the “Ten Special Tasks” of the Party Committee of the head office, the Board of Supervisors continuously improved the quality and efficiency of supervision, thereby playing a positive role in facilitating the implementation of the high-quality development strategy throughout the Bank During the Reporting Period, the Board of Supervisors of the Bank earnestly performed its supervisory functions It improved the duty performance supervision by continuously urging the Board of Directors of the Bank, the senior management and their members to duly perform their duties and responsibilities Moreover, the Board of Supervisors enhanced the financial supervision by actively paying close attention to the Bank’s important financial decisions and their implementation, as well as the internal control supervision by focusing on the improvement in the management of internal control compliance It also optimized risk management supervision by continuously deepening comprehensive risk management With the strengthening of self-construction, improvement in mechanisms and systems and coordination enhancement, the Board of Supervisors conducted on-site research and special training, thereby striving to improve its working standards Taking bold actions and focusing on practical works, in 2025, the Board of Supervisors of the Bank will continuously and thoroughly adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, insist on the general principle of pursuing progress while ensuring stability, deeply grasp keeping political consciousness in mind and putting people first in the financial work, strive to accomplish the “five priorities”, and promote the development of China Bohai Bank with new results through practical efforts and performance BAI Xinyu Chairman of the Board of Supervisors March 26, 2025 CHINA BOHAI BANK CO, LTD Annual Report 2024 Honors and Awards 9 Honors and Awards At the 7th Annual Meeting of Beijing Financial Assets Exchange, the Bank won the “2024 Most Innovative Institution” award and the “2024 Most Powerful Institution in Market Breakthrough” award granted by Beijing Financial Assets Exchange for serving the high-quality development of interbank bond market At the 2024 Best Investment Bank selection hosted by Wind, the Bank ranked first in Rapid Progress Award for Bank Bond Underwriting In the collection of the 2024 “China Ding” Outstanding Cases in the Financial Industry hosted by China Internet Information Center, the Bank was selected for “Outstanding Case for Financial Consumer Protection of the Year” In the selection of the “2024 Banking Industry ESG Development Practices” hosted by China Banking and Insurance News, the Bank was included in the list of “Top 20 Banks in ESG Comprehensive Performance”, with an AA rating At the “2024 Bankers’ Financial Innovation Forum and Bankers’ Financial Innovation Results Conference” hosted by The Chinese Banker magazine, the Bank was selected for “2024 Bankers’ Outstanding Case for Risk Management Innovation of the Year” and “2024 Bankers’ Outstanding Case for Transaction Banking Innovation of the Year” In the collection of “21st Century Outstanding Cases of Financial Development 2024” hosted by 21st Century Business Herald, the Bank was recognized as “Financial Institution with New Quality Productive Forces of 2024” and “Financial Institution for Consumer Rights Protection of 2024” At the “2024 China Financial Development Forum and the 15th Golden Censer Awards” hosted by National Business Daily, the Bank won the “Excellence in Corporate Finance Award of the Year”, and its subsidiary CBHB Wealth Management Co, Ltd won the “Competitive Banking Wealth Management Products of the Year” In the collection of “Five Major Finance Cases” hosted by National Business Daily, the Bank was selected in “Five Priorities in Finance Industry – Digital Finance Case” In the collection of “2024 Outstanding Cases of Financial Enterprise Gala” hosted by The Economic Observer, the Bank was rated as “Outstanding Inclusive Bank of the Year” For the “2024 China Banking Industry Gamma Award” hosted by Securities Times (Securities Firms China), the Bank won the “2024 Gamma Award for Technological Innovation” At the 7th Capital Market Summit & Golden Jubilee Awards Ceremony 2024 hosted by China Investment Network, the Bank was recognized as “2024 Outstanding Regional Service Bank” At the 2024 Huaxia Institutional Investor Annual Conference & the 18th Golden Cicada Awards Presentation hosted by China Times, the Bank won the “2024 Outstanding Financial Institution Empowering the Elderly Care Industry” award In the selection of the “ESG Golden Antelope Award at the 2024 ESG and High Quality Development Innovation Forum” and “2024 Golden Tangerine Award” hosted by The Time Weekly, the Bank won the “2024 Green Finance Pioneer” award and “Best Digital Finance Institution” award, respectively The Bank was awarded the “Market Influencer of the Year”, “Market Innovator of the Year”, “Active Repo Trader”, “X-Repo Active Institution”, “X-Lending Star”, “X-Lending Active Institution”, “Star of X-Bond Spread Trading Strategy”, “Best X-Bargain Performance Award”, “Rising Star of iBean Derivatives” and “Star of X-Bargain Interest Rate” by China Foreign Exchange Trade System The “CBHB Preferred Tianjin Local Government Bond Basket” was recognized as “Active Basket” and “Quotation Star”; the “CBHB Tianjin Local Government Green Bond Basket” was recognized as “Active Basket” CHINA BOHAI BANK CO, LTD Annual Report 2024 Summary of Accounting Data and Financial Indicators 11 Summary of Accounting Data and Financial Indicators I KEY ACCOUNTING DATA AND FINANCIAL INDICATORS (Unit: RMB’000) Increase 2024 2023 (decrease) (%) 2022 2021 2020 Operating results data: Operating income 25,481,589 24,997,370 194 26,465,220 29,194,364 32,492,170 Profit before taxation 5,333,030 5,163,077 329 6,511,454 10,303,797 10,085,092 Net profit 5,255,815 5,080,903 344 6,107,475 8,629,724 8,444,571 Net profit attributable to equity holders 5,255,815 5,080,903 344 6,107,475 8,629,724 8,444,571 of the Bank Net cash flows generated from operating 92,909,178 81,308,605 1427 26,830,977 82,987,687 52,085,407 activities Indicators per share (RMB): Basic earnings per share attributable to 024 023 435 029 043 047 ordinary Shareholders of the Bank Diluted earnings per share attributable to 024 023 435 029 043 047 ordinary Shareholders of the Bank Net cash flows generated from operating 523 458 1419 151 467 327 activities per share Financial ratios (%): Average return on total assets(1) 029 030 A decrease of 038 058 067 001 percentage point Weighted average return on net assets(2) 444 448 A decrease of 581 888 1068 004 percentage point December 31, December 31, Increase December 31, December 31, December 31, 2024 2023 (decrease) (%) 2022 2021 2020 Scale indicators: Total assets 1,843,842,128 1,732,733,836 641 1,659,459,902 1,582,707,598 1,393,523,125 Gross loans and advances to customers(3) 936,490,691 932,644,435 041 957,216,978 955,355,247 887,537,545 Total liabilities 1,733,717,300 1,618,331,135 713 1,549,508,868 1,476,143,521 1,290,277,295 Gross deposits from customers(3) 1,046,088,795 915,161,978 1431 843,873,695 820,589,157 746,725,783 Total equity 110,124,828 114,402,701 (374) 109,951,034 106,564,077 103,245,830 Net assets per share attributable to ordinary 558 532 489 507 488 469 Shareholders of the Bank (RMB)(4) Share capital 17,762,000 17,762,000 – 17,762,000 17,762,000 17,762,000 Notes: (1) Average return on total assets equals net profit divided by average value of total assets at the beginning and end of the period (2) Weighted average return on net assets is calculated pursuant to the Compilation Rules for Information Disclosures by Companies that Offer Securities to the Public (No 9): Calculation and Disclosure of Rate of Return on Equity and Earnings per Share (2010 Revision) (《公開發行證券的公司信息披露編報規則第 9 號－淨資產收益率和每股收益的計算及披露（2010 年修訂）》) issued by the CSRC (3) Gross loans and advances to customers and gross deposits from customers exclude interests accrued (4) Net assets per share attributable to ordinary Shareholders of the Bank equals equity attributable to holders of ordinary shares of the Bank at the end of the period, which has excluded other equity instruments, divided by total share capital at the end of the period CHINA BOHAI BANK CO, LTD Annual Report 2024 Summary of Accounting Data and Financial Indicators 13 Notes: (1) Net interest spread is calculated as the difference between the average yield on total interest-earning assets and the average cost of total interest-bearing liabilities (2) Net interest margin is calculated by dividing net interest income by the average balance of total interest-earning assets; gains arising from the trading financial assets business are not classified as interest income for accounting purposes, the corresponding interest expense on interest-bearing liabilities of which is adjusted accordingly, restating prior years’ information on a comparable basis (3) Cost-to-income ratio is calculated by dividing total operating expenses (excluding tax and surcharges, etc) by operating income (4) NPL ratio equals the balance of non-performing loans divided by gross loans and advances to customers (excluding interests accrued) (5) Allowance coverage ratio equals the sum of allowance for impairment losses on the loans measured at amortised cost and allowance for impairment losses on the loans measured at fair value through other comprehensive income divided by the NPL balances (6) Allowance to gross loan ratio equals the sum of allowance for impairment losses on the loans measured at amortised cost and allowance for impairment losses on the loans measured at fair value through other comprehensive income divided by gross loans and advances to customers (excluding interests accrued) (7) Since January 1, 2024, the Group calculates the capital adequacy ratios for each tier and leverage ratio according to the Rules on Capital Management of Commercial Banks (《商業銀行資本管理辦法》), China Accounting Standards for Business Enterprises (中國企業會計準則) and other relevant regulations The Group calculates the data in prior years according to the Capital Rules for Commercial Banks (Provisional) (《商業銀行資本管理辦法（試行）》), Leverage Ratio Rules for Commercial Banks (Revised) (《商業銀行槓桿率管理辦法（修訂）》), China Accounting Standards for Business Enterprises (中國企業會計準則) and other relevant regulations (8) Proportion of loans to the single largest customer and proportion of loans to top ten customers are the ratio of the gross loan of the single largest customer to the net capital and the ratio of the gross loan of the top ten customers to the net capital, respectively CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 15 II DEVELOPMENT STRATEGIES Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the Bank thoroughly studied and implemented the spirit of the 20th CPC National Congress and the second and third plenary sessions of the 20th CPC Central Committee, the spirit of the Central Financial Work Conference and the Central Economic Work Conference, and the spirit of the important speech made by General Secretary Xi Jinping during his visit to Tianjin, adhered to the Party’s overall leadership over financial work, and deeply grasped keeping political consciousness in mind and putting people first in the financial work The Bank took quality enhancement as the premise and basis, making the best use of existing resources as the urgent need and key, optimizing allocation of new resources as the path and pillar, promoted the “Ten Special Tasks”, focused on the construction of “customer factory, product factory, collection factory, talent factory and branch factory”, and strived to build a responsible, professional and refined China Bohai Bank The Bank adhered to make itself a modern financial enterprise with Chinese characteristics with strong political guidance, clear strategic positioning, effective corporate governance, improved business quality and efficiency, controllable overall risks and healthy and sustainable development In terms of business strategy, the Bank focused on serving the national strategic objectives and the real economy, as well as Tianjin’s “Ten Actions”, “Three Points on Quantity and Quality” and “Three Upgrades”, made great efforts to promote the “five priorities”, namely technology finance, green finance, inclusive finance, pension finance and digital finance, and the “two specialties”, namely industrial finance and shipping finance, so as to realize the development of both supporting the real economy and its own high-quality development For the corporate banking business, the Bank was positioned as an industrial bank, a transaction bank and a light-model bank, focusing on building industrial strategic customer groups, specializing in serving basic and special customer groups, growing government and institution customer groups and expanding regional key customer groups For the retail banking business, the Bank was positioned as an account-oriented bank, a wealth management bank and an ecosystem-based bank, and focused on reducing cost in liability business, improving quality of asset business, increasing transaction volume of wealth management business, and strengthening business development foundation For the financial markets business, the Bank was positioned as a bond bank, an asset management bank and an agency bank By taking investment and research capabilities as the core, trend management as the starting point, and customer service as the orientation, the Bank improved the major products for coordination and refined the major products for revenue generation, thus realizing coordinated operation of business lines and integrated customer operation III SCOPE OF BUSINESSES The business scope of the Bank includes: absorbing public deposits; offering short-term, medium-term and long- term loans; arranging settlement of domestic and international accounts; handling acceptance and discount of bill; issuing financial securities; acting as agent to issue, settle and underwrite government bonds and proprietary trading bonds issued by government and financial institutions; inter-bank borrowing and lending; trading of foreign currencies by itself and on behalf of its customers; settlement and sale of foreign exchange; bank card business; letters of credit and financial guarantees; acting as agent on inward and outward payments; acting as insurance agent; offering safe-deposit facilities; derivative trading; securities investment custody; insurance fund custody; selling securities investment fund; and other business approved by the banking regulatory institutions of the State Council (For projects subject to approval in accordance with the law, business activities shall be carried out upon approval of relevant authorities) CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 17 Stabilizing and recovering profitability indicators with continuous cost reduction and efficiency enhancement During the Reporting Period, the Group continued to strengthen its efforts in serving the real economy, actively expanded its core customer base, continuously optimized its business structure, seized market opportunities, and implemented cost reduction and efficiency enhancement measures Hence, both operating income and net profit recorded year-on-year increase During the Reporting Period, the Group achieved an operating income of RMB25,482 million, representing an increase of RMB484 million or 194% as compared to the previous year; a net profit of RMB5,256 million, representing an increase of RMB175 million or 344% as compared to the previous year; and a cost-to-income ratio of 3901%, representing a decrease of 150 percentage points as compared to the previous year V ANALYSIS OF FINANCIAL STATEMENTS (I) Items in the Consolidated Statement of Profit or Loss and Other Comprehensive Income 1 Changes in items in the consolidated statement of profit or loss and other comprehensive income During the Reporting Period, the Group realized a net profit of RMB5,256 million, representing an increase of 344% as compared to the previous year, mainly attributable to the growth in operating income and the continuous cost reduction and efficiency enhancement The following table sets forth the changes in items in the consolidated statement of profit or loss and other comprehensive income of the Group for the periods indicated: (Unit: RMB’000) Increase (decrease) 2024 2023 Change (%) Net interest income 15,542,470 17,645,989 (2,103,519) (1192) Net non-interest income 9,939,119 7,351,381 2,587,738 3520 Operating income 25,481,589 24,997,370 484,219 194 Operating expenses (10,488,740) (10,713,146) 224,406 (209) Impairment losses on assets (9,659,819) (9,121,147) (538,672) 591 Profit before taxation 5,333,030 5,163,077 169,953 329 Income tax expense (77,215) (82,174) 4,959 (603) Net profit 5,255,815 5,080,903 174,912 344 Total comprehensive income 5,675,967 5,401,667 274,300 508 2 Net interest income During the Reporting Period, the net interest income of the Group amounted to RMB15,542 million, representing a decrease of 1192% as compared to the previous year CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 19 The following table sets forth the average balance, interest income and average yield for components of loans and advances to customers of the Group for the periods indicated: (Unit: RMB’000) 2024 2023 Average Interest Average Average Interest Average balance income yield (%) balance income yield (%) Corporate loans and advances 606,269,281 27,486,177 453 540,016,610 24,945,056 462 Personal loans 230,450,603 10,783,079 468 315,300,208 17,705,626 562 Discounted bills 76,609,078 1,107,269 145 76,514,078 1,169,830 153 Gross loans and advances to customers 913,328,962 39,376,525 431 931,830,896 43,820,512 470 Interest income arising from deposits with the central bank, deposits with banks and other financial institutions and placements with banks and other financial institutions and interest income arising from financial assets held under resale agreements During the Reporting Period, the Group’s interest income arising from deposits with the central bank, deposits with banks and other financial institutions and placements with banks and other financial institutions totaled RMB1,902 million, representing a year-on-year decrease of 1659%, mainly due to the decline in market interest rates; and the interest income arising from financial assets held under resale agreements amounted to RMB495 million, representing a year-on-year decrease of 001% Interest income arising from financial investments During the Reporting Period, the Group’s interest income arising from financial investments amounted to RMB13,109 million, representing a year-on-year decrease of 447% (3) Interest expense During the Reporting Period, the Group’s interest expense amounted to RMB39,339 million, representing a year-on-year decrease of 781% Interest expense on deposits from customers During the Reporting Period, the Group’s interest expense on deposits from customers amounted to RMB22,163 million, representing a year-on-year decrease of 937%, mainly due to the Group’s active optimization of its deposit structure and greater efforts to expand low-cost deposits Coupled with the decline in market interest rates, the average cost ratio of deposits decreased by 032 percentage point as compared to the previous year The following table sets forth the average balance, interest expense and average cost on deposits from customers of the Group for the periods indicated: (Unit: RMB’000) 2024 2023 Average Interest Average Average Interest Average balance expense cost (%) balance expense cost (%) Corporate deposits 564,246,664 13,192,836 234 565,872,493 15,290,213 270 Of which: Demand deposits 172,577,904 1,851,484 107 197,120,230 2,753,609 140 Time deposits 391,668,760 11,341,352 290 368,752,263 12,536,604 340 Personal deposits 201,128,221 5,582,102 278 202,090,737 5,933,207 294 Of which: Demand deposits 28,945,771 84,101 029 37,969,166 258,735 068 Time deposits 172,182,450 5,498,001 319 164,121,571 5,674,472 346 Pledged deposits and others 154,413,047 3,387,981 219 129,231,508 3,231,238 250 Total deposits from customers 919,787,932 22,162,919 241 897,194,738 24,454,658 273 CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 21 (1) Net fee and commission income During the Reporting Period, the net fee and commission income of the Group amounted to RMB2,974 million, representing a year-on-year decrease of 2563%, mainly due to the decrease in agency service and asset management business fees as compared to the previous year The following table sets forth the principal components of the Group’s net fee and commission income for the periods indicated: (Unit: RMB’000) Increase 2024 2023 (decrease) (%) Fee and commission income 3,995,271 5,077,664 (2132) Of which: A gency service and asset management business fees 1,835,317 3,044,037 (3971) Settlement and clearing fees 997,376 937,790 635 G uarantee and commitment fees 614,786 530,773 1583 Custodian service fees 279,383 293,830 (492) Consulting service fees 127,014 139,813 (915) Bank card fees 96,237 91,432 526 Others 45,158 39,989 1293 Fee and commission expense 1,021,212 1,078,743 (533) Net fee and commission income 2,974,059 3,998,921 (2563) (2) Other net non-interest income During the Reporting Period, other net non-interest income of the Group amounted to RMB6,965 million, representing a year-on-year increase of 10776%, mainly due to the increase in net trading income by 8747% and the increase in net gains on financial investments by 11613% as compared to the previous year The following table sets forth the principal components of other net non-interest income of the Group for the periods indicated: (Unit: RMB’000) Increase 2024 2023 (decrease) (%) Net trading income 941,146 502,026 8747 Net gains on financial investments 5,972,326 2,763,298 11613 Other operating income 51,588 87,136 (4080) Total 6,965,060 3,352,460 10776 4 Operating expenses During the Reporting Period, the operating expenses of the Group amounted to RMB10,489 million, representing a year-on-year decrease of 209% Among them, staff costs amounted to RMB5,955 million, representing a year-on-year decrease of 008%; other operating expenses amounted to RMB4,534 million, representing a year-on-year decrease of 462%; and cost-to-income ratio was 3901%, representing a year-on-year decrease of 150 percentage points The decrease was mainly attributable to the Group’s in-depth implementation of the cost reduction and efficiency enhancement measures, continuous efforts to establish the mindset of operating with “limited financial resources”, and continuous optimization of control measures in respect of branch construction, network operation and expense management, thus steadily enhancing input and output efficiency CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 23 (II) Items in the Consolidated Statement of Financial Position 1 Items of assets As of the end of the Reporting Period, the total assets of the Group amounted to RMB1,843,842 million, representing an increase of 641% as compared to the end of the previous year, which was mainly due to an increase in asset scale led by the rapid development of financial investment The following table sets forth the composition of total assets of the Group as of the dates indicated: (Unit: RMB’000) December 31, 2024 December 31, 2023 Increase Proportion Proportion (decrease) Amount (%) Amount (%) (%) Cash and deposits with the central bank 148,162,149 804 103,494,179 597 4316 Deposits with banks and other financial institutions 11,405,462 062 20,938,491 121 (4553) Placements with banks and other financial institutions 4,885,299 026 12,353,608 071 (6045) Derivative financial assets 2,448,184 013 1,551,181 009 5783 Financial assets held under resale agreements 18,531,145 101 6,532,553 038 18367 Loans and advances to customers 925,361,742 5019 920,394,849 5312 054 Financial investments 700,438,320 3799 633,136,792 3654 1063 Property and equipment 3,217,544 017 3,586,673 021 (1029) Deferred tax assets 12,362,922 067 14,759,051 085 (1623) Right-of-use assets 3,606,436 020 3,886,770 022 (721) Other assets 13,422,925 072 12,099,689 070 1094 Total assets 1,843,842,128 10000 1,732,733,836 10000 641 (1) Loans and advances to customers As of the end of the Reporting Period, the Group’s gross loans and advances granted to customers (including discounts) amounted to RMB936,491 million, representing an increase of 041% as compared to the end of the previous year The following table sets forth the distribution of loans and advances to customers of the Group by product type as of the dates indicated: (Unit: RMB’000) December 31, 2024 December 31, 2023 Increase Proportion Proportion (decrease) Amount (%) Amount (%) (%) Corporate loans and advances 654,736,013 6991 566,740,133 6077 1553 Discounted bills 59,727,587 638 93,160,915 999 (3589) Personal loans 222,027,091 2371 272,743,387 2924 (1859) Gross loans and advances to customers 936,490,691 10000 932,644,435 10000 041 Interests accrued 13,115,173 12,350,216 Total 949,605,864 944,994,651 CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 25 (3) Financial derivatives transactions The Group’s financial derivatives transactions mainly consist of interest rate swaps, foreign exchange swaps and foreign exchange forwards, etc The Group flexibly uses various derivative financial instruments to hedge exchange rate and interest rate risks, carries out strategic transactions and reasonably manages the portfolio of derivative financial instrument position, and keeps a sound trading style As of the end of the Reporting Period, the notional amount and fair value of the main types of unexpired derivative financial instruments held by the Group are set out as follows: (Unit: RMB’000) December 31, 2024 December 31, 2023 Notional Fair value Notional Fair value amount Assets Liabilities amount Assets Liabilities Interest rate swaps 254,969,033 32,172 (11,129) 248,318,596 14,753 (4,386) Exchange rate swaps 139,026,375 1,318,613 (922,071) 79,142,406 726,267 (501,555) Exchange rate forwards 30,687,855 919,113 (847,959) 43,718,277 578,565 (473,145) Precious metal swaps 4,010,073 168,443 (9,620) 4,845,954 218,193 – Option contracts 1,912,240 9,843 (9,104) 1,132,332 13,403 (11,526) Total 430,605,576 2,448,184 (1,799,883) 377,157,565 1,551,181 (990,612) 2 Items of liabilities As of the end of the Reporting Period, the total liabilities of the Group amounted to RMB1,733,717 million, representing an increase of 713% as compared to the end of the previous year, which was mainly due to an increase in total liabilities led by the increase in deposits from customers and debt securities issued The following table sets forth the composition of total liabilities of the Group as of the dates indicated: (Unit: RMB’000) December 31, 2024 December 31, 2023 Increase Proportion Proportion (decrease) Amount (%) Amount (%) (%) Borrowing from the central bank 121,378,473 700 133,787,964 827 (928) Deposits from banks and other financial institutions 150,561,544 868 158,762,222 981 (517) Financial liabilities measured at fair value through profit or loss 171,916 001 – – N/A Placements from banks and other financial institutions 23,144,745 134 34,920,012 216 (3372) Derivative financial liabilities 1,799,883 010 990,612 006 8169 Financial assets sold under repurchase agreements 57,818,338 334 66,634,253 412 (1323) Deposits from customers 1,067,561,795 6158 934,593,879 5775 1423 Income tax payable (621,775) (004) 849,131 005 (17322) Debt securities issued 290,863,182 1678 267,923,368 1656 856 Lease liabilities 3,722,824 021 4,115,588 025 (954) Other liabilities 17,316,375 100 15,754,106 097 992 Total liabilities 1,733,717,300 10000 1,618,331,135 10000 713 Note: As at December 31, 2024, borrowing from the central bank of RMB121,378,473,000 included the principal amount at a fixed interest rate of RMB119,873,000,000, and the interest payable on the borrowing from the central bank of RMB1,505,473,000 CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 27 3 Total equity As of the end of the Reporting Period, the total equity of the Group amounted to RMB110,125 million, representing a decrease of RMB4,278 million as compared to the end of the previous year, primarily due to the decrease in other equity instruments as a result of the redemption of undated capital bonds of RMB20,000 million issued in prior years and the issuance of new undated capital bonds of RMB11,000 million during the Reporting Period, coupled with the increase in net profit for the current year The following table sets forth the composition of the items in the Group’s total equity as of the dates indicated: (Unit: RMB’000) Increase December 31, December 31, (decrease) 2024 2023 (%) Share capital 17,762,000 17,762,000 – Other equity instruments 11,000,000 19,961,604 (4489) Other reserves 1,732,924 (2,718,089) N/A Capital reserve 10,689,841 10,732,077 (039) Surplus reserve 7,929,133 7,828,688 128 General reserve 21,106,229 20,678,511 207 Retained earnings 39,904,701 40,157,910 (063) Total 110,124,828 114,402,701 (374) 4 Off-balance sheet items that may have a significant impact on the financial position and operating results The off-balance sheet items of the Group are set out in “Audit Report and Financial Report: Notes to the Consolidated Financial Statements” in this annual report (III) Items in the Consolidated Statement of Cash Flows During the Reporting Period, net cash flow generated from operating activities of the Group amounted to RMB92,909 million, of which cash inflow generated from changes in operating assets amounted to RMB1,080 million, cash inflow generated from changes in operating liabilities amounted to RMB88,227 million Net cash flow used in investing activities of the Group amounted to RMB43,307 million, of which proceeds from disposal sale and redemption of investments amounted to RMB765,126 million, purchases of investments amounted to RMB809,167 million Net cash flow generated from financing activities of the Group amounted to RMB5,113 million, of which proceeds from debt securities issued amounted to RMB422,032 million, repayment of debt securities issued amounted to RMB400,724 million CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 29 VI ANALYSIS OF CAPITAL ADEQUACY RATIOS In calculating its capital adequacy ratios, the Bank considers itself and the financial institutions it invests directly or indirectly in compliance with the Rules on Capital Management of Commercial Banks (《商業銀行資本管理辦法》) The Group and the Bank calculate the capital adequacy ratios for each tier as at December 31, 2024 in accordance with the Rules on Capital Management of Commercial Banks (《商業銀行資本管理辦法》) and the relevant requirements and the capital adequacy ratios for each tier as at December 31, 2023 in accordance with the Capital Rules for Commercial Banks (Provisional) (《商業銀行資本管理辦法（試行）》) and the relevant requirements The items involved are as follows: (Unit: RMB’000) December 31, 2024 December 31, 2023 The Group The Bank The Group The Bank Core tier 1 capital 99,124,828 98,686,728 94,441,097 94,223,505 Core tier 1 capital regulatory deductions (2,766,797) (4,983,084) (5,635,246) (7,839,745) Net core tier 1 capital 96,358,031 93,703,644 88,805,851 86,383,760 Other tier 1 capital 11,000,000 11,000,000 19,961,604 19,961,604 Net tier 1 capital 107,358,031 104,703,644 108,767,455 106,345,364 Tier 2 capital 26,857,792 26,857,792 17,051,284 17,051,284 Tier 2 capital regulatory deductions – – – – Net capital 134,215,823 131,561,436 125,818,739 123,396,648 Capital adequacy ratio Note (%) 1163 1142 1158 1137 Tier 1 capital adequacy ratio (%) 930 909 1001 980 Core tier 1 capital adequacy ratio (%) 835 813 817 796 Note: Capital adequacy ratio equals net capital/risk-weighted assets*100% See table below for details of risk-weighted assets The Group and the Bank measure risk-weighted assets as at the end of 2024 in accordance with the Rules on Capital Management of Commercial Banks (《商業銀行資本管理辦法》), among which, credit risk-weighted assets are calculated using the method of weighting, market risk-weighted assets are calculated using the simplified standardized approach, and operational risk-weighted assets are calculated using the standardized approach The Group and the Bank measure risk-weighted assets as at the end of 2023 in accordance with the Capital Rules for Commercial Banks (《商業銀行資本管理辦法（試行）》), among which, credit risk-weighted assets are calculated using the method of weighting, market risk-weighted assets are calculated using the standardized approach, and operational risk-weighted assets are calculated using basic indicator approach (Unit: RMB’000) December 31, 2024 December 31, 2023 The Group The Bank The Group The Bank Credit risk-weighted assets 1,091,241,849 1,089,229,765 1,027,021,912 1,025,855,790 Of which: On-balance sheet credit risk 998,590,937 996,578,853 955,466,268 954,300,146 Off-balance sheet credit risk 89,201,282 89,201,282 68,502,384 68,502,384 Counterparty credit risk 3,449,630 3,449,630 3,053,260 3,053,260 Market risk-weighted assets 18,214,061 18,214,061 9,964,652 9,964,652 Operational risk-weighted assets 44,987,310 44,660,881 49,660,324 49,392,011 Total risk-weighted assets 1,154,443,220 1,152,104,707 1,086,646,888 1,085,212,453 CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 31 IX LOAN QUALITY ANALYSIS During the Reporting Period, the Bank put greater efforts in non-performing asset disposal through means such as cash collection, write-off of bad debts, bankruptcy reorganization and transfer, thus strengthening asset quality, which remained steady in general The Bank controlled the proportion of pure credit platform business by downsizing consumer online loans and reduced high-risk assets to a greater extent, resulting in rapid reduction in personal loan assets The high-risk assets of personal loans were disposed rapidly, resulting in a more optimal asset structure and stronger risk management capability The overall risk exposures in personal loan business were controllable Looking forward, the Bank will continuously increase the measures for non-performing asset disposal, put greater efforts in disposal of non-performing assets, and continuously lower various non-performing indicators (I) Distribution of Loans by Five-category Classification (Unit: RMB’000) December 31, 2024 December 31, 2023 Proportion Proportion Amount (%) Amount (%) Normal loans 893,947,790 9546 887,214,612 9512 Special mention loans 26,063,028 278 28,871,484 310 NPLs 16,479,873 176 16,558,339 178 Of which: Substandard loans 5,601,532 060 5,531,097 059 Doubtful loans 2,363,425 025 5,572,424 060 Loss loans 8,514,916 091 5,454,818 059 Gross loans and advances to customers 936,490,691 10000 932,644,435 10000 (II) Loan Migration (Unit: %) December 31, 2024 December 31, 2023 December 31, 2022 Migration rate of normal loans 222 111 133 Migration rate of special mention loans 1630 833 1993 Migration rate of substandard loans 5126 6389 7456 Migration rate of doubtful loans 3016 3949 1565 Note: The above figures do not include asset transfers (III) Distribution of Loans and NPLs by Product Type (Unit: RMB’000) December 31, 2024 December 31, 2023 Proportion NPL NPL ratio Proportion NPL NPL ratio Amount (%) amount (%) Amount (%) amount (%) Corporate loans and advances 654,736,013 6991 7,267,965 111 566,740,133 6077 10,418,084 184 Of which: Short-term corporate loans 263,760,443 2816 3,534,104 134 220,021,985 2359 5,307,835 241 Medium and long-term corporate loans 390,975,570 4175 3,733,861 096 346,718,148 3718 5,110,249 147 Discounted bills 59,727,587 638 – – 93,160,915 999 13,524 001 Of which: Bank acceptance bills 58,738,511 627 – – 92,640,303 993 – – Commercial acceptance bills 989,076 011 – – 520,612 006 13,524 260 Personal loans 222,027,091 2371 9,211,908 415 272,743,387 2924 6,126,731 225 Of which: Residential and commercial housing loans 149,664,942 1598 2,963,768 198 159,565,607 1711 1,547,054 097 Personal consumption loans 37,512,214 401 4,638,758 1237 75,937,149 814 3,372,526 444 Personal business loans 34,849,935 372 1,609,382 462 37,240,631 399 1,207,151 324 Gross loans and advances to customers 936,490,691 10000 16,479,873 176 932,644,435 10000 16,558,339 178 CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 33 (VII) Distribution of Loans by Overdue Period As of the end of the Reporting Period, the overdue loans amounted to RMB26,15423 million, representing a decrease of RMB2,73309 million as compared to the end of the previous year (Unit: RMB’000) December 31, 2024 December 31, 2023 Proportion Proportion Amount (%) Amount (%) Overdue within three months 10,911,339 116 13,057,400 140 Overdue more than three months to one year 6,095,515 065 5,455,126 059 Overdue more than one year to three years 6,374,601 068 7,750,545 083 Overdue more than three years 2,772,773 030 2,624,251 028 Total overdue loans 26,154,228 279 28,887,322 310 Gross loans and advances to customers 936,490,691 10000 932,644,435 10000 (VIII) Loans to Ten Largest Customers Who Are Single Borrowers (Unit: RMB’000) December 31, 2024 NPL % of net % of Borrowers Industry Amount amount capital base gross loans Customer A Lease and business services 7,848,950 – 585 084 Customer B Lease and business services 7,093,890 – 529 076 Customer C Construction 5,570,000 – 415 059 Customer D Lease and business services 4,198,360 – 313 045 Customer E Lease and business services 4,168,900 – 311 045 Customer F Lease and business services 4,150,000 – 309 044 Customer G Lease and business services 4,139,095 – 308 044 Customer H Lease and business services 3,774,500 – 281 040 Customer I Lease and business services 3,541,700 – 264 038 Customer J Lease and business services 3,519,919 – 262 038 Total – 48,005,314 – 3577 513 (IX) Restructured Loans Restructured loans refer to loans for which the Bank has made adjustments to the repayment terms of the loan contract due to the borrower’s financial difficulties in accordance with the requirements of the Rules on Risk Classification of Financial Assets of Commercial Banks As of the end of the Reporting Period, the balance of restructured loans amounted to RMB1,6205283 million, representing an increase of 6888% as compared to the end of the previous year (X) Repossessed Assets As of the end of the Reporting Period, the Bank had no repossessed assets CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 35 (XIV) Large Exposure The Bank has strictly implemented the regulatory requirements of the Rules on Large Exposure of Commercial Banks (《商業銀行大額風險暴露管理辦法》) and continuously enhanced the management of large exposures The Bank has established and improved the organizational structure for the management of large exposures, and built an operating mechanism that is mutually connected and effectively checks and balances It focuses on large customer risk exposures, and strictly controls the gateway of credit approval Adhering to the philosophy of moderate credit line and effective management for credit approval, the Bank strives to gain better control over new credit line approval, strictly monitors new risk exposures of customers with large outstanding credit, and improves the coordinated monitor system for customers with large credit in headquarters and branches During the Reporting Period, all large exposures indicators of the Bank met expected internal and external requirements X MAIN BUSINESS OPERATION AND MANAGEMENT (I) Corporate Banking Business During the Reporting Period, taking serving the national strategic objectives and the real economy as its fundamental purpose, with technology finance, green finance, inclusive finance, pension finance, digital finance and other fields as key development direction, and centering on the operational philosophy of “putting customer as focus, taking market as direction, treating specialized business as major operation and gaining comprehensive income as goal”, the corporate banking focused on the establishment of “an industrial bank, a transaction bank and a light-model bank”, enhanced regional strategic support and branch factory construction, continuously optimized products and services, strengthened risk control capability, and improved digitalized operation management standards, striving to achieve high-quality development of the corporate banking business Customer development During the Reporting Period, the corporate banking focused on industry strategic customer group, basic and special customer groups, government and institution customer groups, and regional key customer group, further reinforcing its customer base In terms of the industry strategic customer group, the corporate banking optimized and upgraded the strategic customer service model, clarified the stratification criteria for strategic clients, and delved deeper into the foundation for marketing cooperation, so as to improve the service level and value contribution for strategic customers In terms of the basic and special customer groups, the corporate banking continued to strengthen the refined management of corporate customers by gradually establishing a digital system for corporate customer operation and management In terms of the government and institution customer groups, the corporate banking expanded its reach to customers in the finance, education, healthcare, housing and construction, government affairs, and livelihood sectors by closely monitoring customer needs and providing high-quality services In terms of the regional key customer group, the corporate banking made active response to the national regional development strategy, gave great support for the construction of the Beijing-Tianjin-Hebei region, the Yangtze Economic Belt, the Chengdu- Chongqing Economic Circle and the Guangdong-Hong Kong-Macao Greater Bay Area, empowering regional economic development As of the end of the Reporting Period, the Bank had a total of 118,960 corporate customers, representing an increase of 1283% as compared to the end of the previous year, and a total of 71,754 effective customers, representing an increase of 1160% as compared to the end of the previous year Liability business During the Reporting Period, the corporate banking continued to promote steady growth in liability size and optimized the liability structure to enhance the overall quality and efficiency of the liability business It placed emphasis on expanding customer sources, refined the hierarchical management of customers, strengthened the breadth and depth of customer cooperation, and consolidated the deposit base It also improved the product structure spectrum, focused on scenario and channel construction, and broadened the channels for deposit growth The corporate banking paid close attention to the changes in macroeconomic policies, interbank updates and regulatory environment in order to make dynamic adjustments to its business strategies, strengthen liability cost management and guide the reduction in interest payment costs As of the end of the Reporting Period, the gross corporate deposits amounted to RMB655,434 million, representing an increase of RMB89,267 million or 1577% as compared to the end of the previous year CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 37 Strategized shipping finance and promoted the integration of port, industry and city Taking the lead in establishing a shipping center, the transaction banking focused on policy guidance to actively establish an ecosystem for shipping finance, focused on industrial agglomeration to support port-specific industries, and focused on resource coordination by hosting the “Conference on Promoting High-Quality Integrated Development of Port, Industry and City”, while facilitating the signing of comprehensive strategic cooperation agreements between the head office and branches of China Bohai Bank and the head office and branches of the China Export & Credit Insurance Corporation It created the “CBHB Credit Insurance Easy (渤銀信保易)” brand to support Chinese enterprises in “going global” Expanded transaction scenarios and engaged in chain finance The transaction banking developed the “Boyin e-Chain (渤銀 e 鏈)” supply chain financial service system, with RMB257,191 million granted for various supply chain products, a year-on-year increase of 3669% It developed and launched the online version of “New-Generation System for Domestic Letters of Credit”, leading its industry peers in terms of functionality It expanded solutions for various scenarios such as letters of credit for electricity tariffs, equipment and fine wine It newly developed the “CBHB Haina Pool (渤銀海納池)” to empower corporate asset and liability management, and serving customers across the entire industry and industrial park development with the “New-Generation Corporate Account Overdraft” service, granting a total of RMB64,900 million Focused on basic settlement and retained satisfactory deposits The transaction banking launched scenario settlement products such as “CBHB E-Commerce Link (渤銀 E 商通)”, “CBHB E-Enterprise Link (渤銀 E 企通)” and “CBHB BoPay (渤銀渤聯付)”, and continued to facilitate the fund pool business of the group, with scenario settlement deposit balances reaching RMB41,000 million, serving 705 customer accounts It created the “CBHB Treasury (渤銀司庫)” brand to help enterprises improve their efficiency of financial resource allocation The new version of the corporate online banking won the “Best User Experience Award for Corporate Online Banking” at the China Financial Certification Authority Digital Finance Golden List Awards Promoted online bills and supported inclusive development The transaction banking introduced the “Instant Discount (秒貼)” product, with the direct bill discount turnover reaching RMB120 billion during the Reporting Period, representing a year-on-year increase of 120% The new-generation bill business served over 400 medium, small and micro enterprises, handling a discount size of more than RMB50,000 million During the Reporting Period, the “New-Generation Bill” was awarded the title of “2023 Excellent Acceptance Institution, Excellent New-Generation Bill System Business Promotion Institution” by the Shanghai Commercial Paper Exchange Optimized cross-border services and established brand reputation The transaction banking continued to enrich its product offering and service “toolbox”, focused on making breakthroughs of the scenarios of electronic customs duty payment and guarantee letters, and established the “CBHB Tariff Ease (渤銀關稅通)” brand It launched coverage for all customs districts where the Bank’s branches are located at once, filling a long-standing gap and surpassing industry peers It constructed comprehensive product systems such as “CBHB Global Fast Payment (渤銀全球速匯)” and “CBHB Credit Insurance Easy (渤銀信保易)”, providing full- journey cross-border financial services covering domestic and international, local and foreign currency, online and offline, and investment and commercial banking In 2024, the industry-first “CBHB Global Fast Payment (渤銀全球速匯)” won the “2024 Bankers’ Outstanding Case for Transaction Banking Innovation of the Year” award from The Chinese Banker magazine for its unique functions and excellent customer experience CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 39 Inclusive finance business During the Reporting Period, the Bank thoroughly implemented the national decision and deployment on inclusive finance, strictly implemented regulatory policy requirements, improved the quality and efficiency of financial services for small and micro enterprises, and promoted the expansion, coverage, cost reduction and quality improvement of inclusive finance business, thereby solidly advancing the priority on inclusive finance Adhering to the development strategy of “doing small, doing well, and doing real”, with the development philosophy of empowering “digital, platform, scenario and ecology” through technology, the Bank explored the establishment of a new model for digital inclusive finance, embedding inclusive financial services into various scenarios of production and operation of small and micro enterprises, and comprehensively facilitating the high-quality development of financial services for inclusive small and micro enterprises The Bank took the initiative to engage with small and micro enterprise entities, focusing on enhancing the precision of services in key areas Aiming at the business domains of “two zones, two chains and one ecosystem”, and focusing on key customer groups such as core corporate supply chains, technology innovation enterprises, platform-based enterprises and “housing mortgage” customers, the Bank established a joint meeting mechanism to support the implementation of regional characteristic inclusive ecological scenario projects, thereby improving the accessibility and quality of financial services for small and micro enterprises The Bank accelerated the iteration and innovation of its key products It redesigned its inclusive financial product system, and developed an assembly line for online inclusive finance products that spans the entire process of pre-lending, during-lending and post-lending based on the principles of full-process modularization, parameterization and configurability It also accelerated the construction of digital inclusive finance, and continued to innovate and optimize its online products The Bank switched its customer acquisition model from scattered orders to batch processing, switched its marketing model from passive to active, and switched its product model from offline to online, which significantly enhanced service efficiency and customer experience, and facilitated the inclusive finance service brand building with Bohai characteristics As of the end of the Reporting Period, the balance of inclusive loans of the Bank was RMB55,271 million, representing an increase of RMB3,800 million as compared to the end of the previous year; the number of inclusive loan accounts was 129,465, representing an increase of 13,800 as compared to the end of the previous year; and the average loan execution rate was 432% (II) Retail Banking Business During the Reporting Period, the retail banking accelerated its transformation into “account-oriented bank”, “wealth management bank” and “ecosystem-based bank” Guided by customer needs, it strived to enrich and optimize its product portfolio and increase its scale of business Guided by high-quality development, it significantly optimized its customer and business structure Driven by scenario-based ecosystem cooperation, it continuously broadened and extended its service boundaries It leveraged digital technology engine to deepen customer professional management, and strengthened asset allocation and value-added service capabilities, thereby promoting the steady development of retail banking As of the end of the Reporting Period, the balance of retail deposits amounted to RMB212,275 million, representing an increase of RMB11,273 million during the year The total number of retail customers was 8,202,600, representing an increase of 490,100 during the year CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 41 Asset business During the Reporting Period, the retail asset business firmly followed the national credit policy, and focused on satisfying the diversified credit needs of customers to continuously improve customer service capabilities Firstly, the Bank greatly optimized its retail asset structure, by reducing inefficient assets while increasing the allocation of high-quality assets Secondly, adhering to innovation leadership in products and services, the Bank granted an increasing number of housing mortgage loans so as to fully support residents’ demand for rigid and improvement housing loans Thirdly, it resolutely accelerated the development of personal business loans, providing financial support to small and micro enterprises as well as individual business owners, and made every effort to enhance the quality and efficiency of inclusive financial services Fourthly, the Bank continuously optimized the functions of its self-operated consumer loans, thereby supporting the expansion of domestic demand and the promotion of consumption As of the end of the Reporting Period, the personal loan balance was RMB222,027 million Credit card business During the Reporting Period, the Bank encouraged the return of credit card business to its origins, and promoted the change of the business philosophy of credit card business to improve the “service functionality” Focusing on its high-quality consumers, the Bank made credit cards an effective carrier to enhance the stickiness of high-quality retail consumers In response to China’s current trend, the Bank launched a new Hi Card Credit Card “Shan Hai Jing” (山海經) to enhance the brand influence As of the end of the Reporting Period, the Bank had issued a total of 1,265,200 credit cards and achieved the loan scale of RMB3,886 million (III) Financial Market Business During the Reporting Period, closely aligned with the requirements of the Central Financial Work Conference to “promote the high-quality development of the bond market” and “serve as the main force in supporting the real economy and the anchor for maintaining financial stability”, the Bank’s financial market business implemented the work requirements of the Bank’s transformation and revitalization of high-quality development and the “Ten Special Tasks”, focused on investment and research capabilities, took trend management as the starting point, and followed the guidance of customer service, strengthened the bond business model and product innovation, firmly established the liquidity bottom line, made steady progress in the scale of various businesses, and greatly improved the transaction ranking The Bank adhered to the coordinated growth in customer management, provided one-stop comprehensive financial services including currency, bonds, foreign exchange, precious metals, interest rates, exchange rates and credit derivatives, and effectively served the real economy development Bond business Facing the complicated and changeable bond market, the Bank strengthened the bond business development, flexibly utilized multi-strategy portfolio in asset allocation, actively explored bond trading value, earnestly fulfilled its obligation as a comprehensive market maker in the inter-bank bond market, enriched the variety of market-making transactions, and steadily improved comprehensive income from bonds During the Reporting Period, the Bank’s “Bond Center” coordinated the whole Bank’s bond business development, met customers’ direct financing and indirect financing needs through comprehensive financial service schemes, actively participated in projects such as technology finance, green finance, inclusive finance, pension finance and digital finance, and strengthened financial support for key economic areas so that the Bank could elevate the customer level and comprehensive income During the Reporting Period, the trading volume of the Bank’s bond business exceeded RMB534 trillion, representing an increase of 4586% over the previous year The Bank won the “Market Influencer of the Year”, “Market Innovator of the Year”, “X-Lending Star in January, August and December”, “X-Lending Active Institution from January to December”, “Star of X-Bond Spread Trading Strategy in February”, “Best X-Bargain Performance Award in March”, “Rising Star of iBean Derivatives in May”, “Star of X-Bargain Interest Rate in September” and other awards from China Foreign Exchange Trade System (CFETS) The “CBHB Preferred Tianjin Local Government Bond Basket” was recognized as “Active Basket” in April and July and “Quotation Star” in July by CFETS, respectively The “CBHB Tianjin Local Government Green Bond Basket” was recognized as “Active Basket” in November CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 43 Interbank customer management During the Reporting Period, the Bank solidly promoted the integrated interbank customer management By strengthening the application of customer territorial management and classification and stratification, the Bank kept building customer KYP profiles to continuously improve the average contribution of interbank customers During the Reporting Period, the Bank achieved a coverage rate of 8679% of target territorial interbank customers, and 6497% penetration rate of diversified products At the same time, the Bank promoted the construction of interbank customer manager team, improved the effectiveness of the financial interbank customer marketing platform, and implemented iterative upgrades to the interbank online banking system, so as to continuously enhance the digital management ability and improve the professional management level Wealth management business During the Reporting Period, the Group continuously enriched wealth management product types, optimized product functions and provided customers with quality wealth management services The wealth management subsidiary of the Bank actively expanded the agency sales channels outside the bank and broadened the asset management customer base It had reached agency sales cooperation with 52 institutions During the Reporting Period, the Group issued 418 wealth management products with a total sales amount of RMB444,803 million As of the end of the Reporting Period, the Group had 349 wealth management products, with a balance of RMB173,549 million, of which net-worth wealth management products accounted for 9556% Among the wealth management products, closed-end products accounted for 5113%, and open- end products accounted for 4887% The assets of wealth management products were mainly allocated in the fixed income category, of which bonds, bank deposits, non-standardized debts, public funds and equity assets accounted for 5576%, 1621%, 1434%, 320% and 244% respectively, while the remaining assets, including bonds purchased under resale agreements and interbank deposit, accounted for 805% (IV) Online Financial Business During the Reporting Period, the Bank resolutely implemented the decisions and deployments of the Party Central Committee regarding the development of digital finance, adhered to the philosophy of serving the people through finance, and accelerated the transformation of its online financial business from function construction to traffic management Focusing on the positioning of the three major banks in the retail business and realizing new breakthroughs in the construction of the two core platforms In 2024, the Bank’s revamped official website (wwwcbhbcomcn) made its debut, featuring an industry- leading split-screen layout, card-based zoning, and a multi-dimensional navigation system to achieve a structural overhaul The upgrade introduced intelligent search, barrier-free services, and multi-terminal adaptation, among other digital and intelligent functionalities, to enhance user experience CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 45 During the Reporting Period, adhering to the guidance of Party building, and focusing on the “Ten Actions”, the internal development of the “Three Points on Quantity and Quality” and the external support of the “Three Upgrades”, the Bank worked on financial management and strengthened supportive guarantees, thus securing and supporting the Bank’s operation and development The Bank improved comprehensive budget management, continued to enhance resource allocation, and optimized the allocation system with economic value added as the core Focusing on enhancing the management on revenue generation, the Bank regularly analyzed the effectiveness of revenue generation and monitored the effective implementation of various revenue generation measures Adhering to the principle of “all costs are controllable”, the Bank proactively implemented various cost reduction and efficiency enhancement works through establishment of price management system, reasonable control on project investments, reduction in expenses for organization construction and other measures Hence, various costs were effectively under control The Bank continued to improve the quality of accounting information to ensure that financial condition and operating results can be truly, completely and accurately reflected It also optimized the value analysis, result analysis and profitability analysis functions of the management accounting system, thereby providing data in supporting operating decisions In order to prevent financial management risks, the Bank implemented financial supervision and management and formulated innovative expense management measures (VI) Information Technology Construction During the Reporting Period, the Bank focused on serving the national strategic objectives and the real economy and Tianjin’s “Ten Actions”, took the initiative to promote the “five priorities”, and improved the quality and enhanced efficiency of digital finance Through cloud computing, artificial intelligence, blockchain and big data technologies, the Bank continued to enhance its independent control over key core technologies, and empowered business development and product innovation through the dual engines of digital technology and data elements, thereby supporting the real economy and achieving high-quality development The Bank fully recognizes the strategic significance of financial standardization During the Reporting Period, the Bank actively implemented relevant requirements for standardization in the financial sector, and has formulated the Work Plan for Strengthening the Implementation of Standards in the Financial Sector of China Bohai Bank It also improved the mechanism for benchmarking and compliance of its financial products and services, conducted self-evaluation of standardization in online banking and smart devices, and effectively implemented standard self-declaration and disclosure During the Reporting Period, the Bank continued to optimize its technology talent system, and strengthened the cultivation and reserve of supporting technology talents As of the end of the Reporting Period, the Bank had 1,512 technology personnel, accounting for 110% of its contract employees Centering on the “Talent Pool Construction” initiative, the Bank accelerated the cultivation of digital talents with the goal of improving the quality and efficiency of technology empowerment, actively driving digital finance innovation with talent innovation, thereby providing strong talent support for promoting digital transformation During the Reporting Period, the Bank made every effort to promote high-quality development in terms of information technology construction, with an investment in technology of RMB1,337 million The Bank strengthened and empowered its digital finance operation, built up digital finance infrastructure with high standards, and accelerated the development of the new-generation distributed core system, the new- generation Integrated Funds Business Management System and the Data Lake-Warehouse Integrated System Fully leveraging on the dual drivers of digital technology and data, the Bank allocated more resources on loans for key digital enterprises such as those using specialized and sophisticated technologies to produce novel and unique products, and further improved the construction of customer tagging system of “Getting All Around with Mobile (一機走天下)” and industry chain layout for corporate business With the introduction of Mobile Banking 70, and new versions of portal system and Bohai on the Palm (掌上渤海), the Bank further facilitated the construction of integrated marketing system for retail digital marketing and operation platforms The agency funds transaction system for financial market (phase I) and quantitative transaction system were put into operation, which facilitated the digital operation The Bank intended to build up systems for large models and digitalize intelligent risk management report for retail operation At the same time, the Bank promoted application scenarios such as Q&A Assistant, and facilitated the development of digital productivity and intelligent upgrades with the use of large model technology, providing customers with convenient, intelligent and secure financial service experiences while helping the Bank enhance the quality and efficiency of its financial services to the real economy in all aspects CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 47 The Bank has senior management personnel (the chief risk management officer) in charge of risk management line, who shall be responsible for leading the relevant departments of the risk management line to carry out work under the risk management framework of the Bank The chief risk management officer maintains independence and can directly report the overall risk management to the Board of Directors The Bank has established a risk prevention system consisting of three lines of defense against each main risk to which it is exposed The first line of defense of risk management is formed by various business departments, branches and sub-branches, which are directly responsible for carrying out their risk management functions The second line of defense is departments of risk management line, Assets and Liabilities Management Department, Internal Control and Compliance Department, the General Office (Public Relations Department) and Office of the Board of Directors, which assume responsibilities for formulating policies and procedures, supervising and managing risk The third line of defense of risk management is the Audit Department, which assumes audit responsibilities for the performance of the first and second lines of defense (II) Credit Risk During the Reporting Period, the Bank practiced the risk management culture and philosophy featuring “comprehensive, proactive, agile and effective (全面、主動、敏捷、到位)”, and comprehensively improved its risk management capabilities, thereby achieving healthy and stable asset quality, as well as steady and controllable credit risks The first is to consolidate asset quality The Bank firmly tightened the chord of risk prevention and control and guarded the bottom line of avoiding major risks We continued to excel in the collection and resolution of key monitored assets and set up a special team for risk resolution of large key monitored customers We reinforced the working mechanism for the disposal of non-performing assets, and upgraded the Asset Resolution Department at the head office to a first-tier department, managing it as a business development line The asset resolution departments at the branch level are assigned by the head office and are under vertical management by the head office We commenced the tracking and evaluation of designated group customers, developed a tracking list of large group customers, and delegated monitoring responsibilities to individuals We closely monitored the risks of large group customers, conducted real-time monitoring of sudden public opinion and abnormal business trends of large enterprise group customers, and widely collected and deeply analyzed customer risk information We continued to intensify efforts to recover and resolve non-performing assets, strengthened appraisal incentives and constraints to further stimulate the enthusiasm for working and innovation, and enhanced the quality and efficiency of risk resolution, thereby supporting the overall business development of the Bank As of the end of the Reporting Period, the Bank had an NPL ratio of 176%, representing a decrease of 002 percentage point as compared to the end of the previous year; the allowance coverage ratio was 15519%, and the allowance to gross loan ratio was 273%, which achieved the dual objectives of stabilizing asset quality and defending against expected credit risks The second is to strengthen basic management The Bank upgraded unified credit management and control, and successfully launched the unified comprehensive credit 30 system Building on the existing system functions, we extended the scope of integrated application for low-risk businesses, achieving three-in-one parallel application for group limits, customer limits, and business plans We added system application scenarios that treat a unique credit customer within the group as a single customer, and the entire process supports quick supplementation of image materials and a reuse mechanism for customer data In addition, we optimized 37 function points across various business scenarios and branch processes, significantly enhancing the adaptability of the Bank’s unified comprehensive credit management system While preventing multiple and excessive credit extensions, we fully ensured the efficiency of business application and approval processes Implementing a centralized risk management and control strategy, we continued to optimize resource allocation to support the real economy to maintain efficiency, prevent and control risks while improving quality, and guide capital allocation through credit approval to convey risk preferences and management requirements in pursuit of strict risk management and control We strengthened the promotion and implementation of regulatory systems, and continuously optimized and implemented proactive, reasonable, categorized, and dynamically adjusted credit strategies We persistently enhanced the supervision and monitoring of credit approvals, improved the management capabilities of credit approval, and elevated the quality and efficiency of credit approval We redesigned the risk control foundation for retail credit, supporting six major retail credit business segments, continuously optimized the retail risk governance structure and organizational system, refined retail risk management processes, and iteratively upgraded the retail risk management toolkit to develop a retail credit risk control system CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 49 In addition to effectively managing intraday positions, the Bank managed cash flow, balancing liquidity and profitability and ensuring safety payment and implementing integration management of local and foreign currency For medium- and long-term liquidity risk management, the Bank strengthened management measures on dynamic arrangement concerning maturity structure of assets and liabilities, price guidance, investment and financing strategy update and internal limit, implemented initiative supplementing of liabilities and adjustments to asset structure, realised an expanded stable source of capital and improved the maturity structure of assets and liabilities The Bank’s core indicators of liquidity risk mainly include liquidity ratio, liquidity coverage ratio, net stable funding ratio and liquidity matching rate To ensure that the core indicators are in line with the Bank’s risk appetite, the Bank has formulated a planning scheme with reference to the above indicator preferences and broken it down accordingly into the liquidity management scheme of each business The Bank’s internal limits on liquidity risk mainly include limits on debt securities pledged, liquidity support, settlement fund and mismatch limit, guiding various operating departments to manage liquidity risks in daily operation Enforcing the establishment and analysis of customer behaviour models, leveraging liquidity management models that use prudent assumptions on the Bank’s cash inflows and outflows from its assets and liabilities, and by monitoring, analysing and managing its compliance with regulatory indicators and internal limits, the Group has been able to maintain a sound liquidity position The Bank formulates investment guidelines and regularly assesses and adjusts its investment strategies for debt securities in light of actual risk management needs, clearly defines the ceiling for collateral bonds of businesses through internal limits This ensures the availability of sufficient quality liquid assets which are readily realisable, and structurally ensures the potential liquidity needs of the Bank are well taken care of The Bank focuses on the adjustment and optimisation of asset structure, and establishes a 3-level liquidity reserve system focusing on high liquidity assets such as cash, provision and interest rate debt, currency fund and bond fund, thus effectively fulfilling the liquidity risk management requirements under normal and emergency situation and meeting different payment requirements In addition, the Bank continues to expand its various debt channels, actively strengthens the degree of participation in the issuance of financial bonds, inter-bank customer relationship management and open market operations of the PBOC, expands interbank credit, builds up emergency fund reserves, attempts to expand the Bank’s medium- and long-term stable sources of liabilities, so as to improve the Bank’s financing ability under high liquidity pressure In order to cope with the potential impact arising from fluctuation of capital market and changes of macroeconomic environment, the Bank modifies stress testing scenarios and performs liquidity risk stress tests on a regular basis, including the test of cash flow gaps in the future 7 days, 30 days and 90 days and implementation of shortest lifetime management of the Bank by introducing the internal and external factors to test the Bank’s tolerance of liquidity risks under different stress scenarios through stimulation of decline in the price of marketable securities and outflow of deposits Also, the Bank monitors early-warning indicators daily, in consideration of its business size, complexity, level of risk and organisational structure, the Bank has emergency plans in place and explicit internal labour division and emergency procedures, and organises involved departments of head office and branches to launch crisis response exercises to ensure the liquidity under a crisis situation CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 51 (IV) Market Risk (Including the Interest Rate Risk in the Banking Book) The Bank, in strict compliance with relevant requirements such as the Guidance on Market Risk Management of Commercial Bank (《商業銀行市場風險管理指引》) and the Guidelines for the Management of Interest Rate Risk in the Banking Book of Commercial Banks (Revised) (《商業銀行銀行賬簿利率風險管理指引（修訂）》), implements an independent and comprehensive market risk (including interest rate risk in the banking book, similarly hereinafter) management mode The Board of Directors of the Bank is responsible for reviewing and approving the market risk management strategies, policies and procedures, so as to define the acceptable market risk level of the Bank The Assets and Liabilities Management Committee under the senior management is responsible for developing, regularly reviewing and overseeing the policies, procedures and workflows relating to market risk, and delineates market risk limits based on the risk appetite outlined by the Board of Directors The Assets and Liabilities Management Department at the head office is responsible for leading the establishment of the market risk identification, measurement, monitoring, reporting and control mechanisms to ensure that the market risk borne by the Bank is controlled within the risk appetite set by the Board of Directors The Bank’s market risk management is governed by a comprehensive, sound and prudent principle, and its overall goal is to control the market risk level within its tolerance, by organically combining the identification, measurement, monitoring and control of market risks with the Bank’s major operational and management activities including strategic planning, business decision-making and financial budgeting The Bank has formulated the Market Risk Management Policy and Administrative Measures for the Classification of Trading Books and Banking Books on this basis, actively implemented relevant market risk regulatory requirements, and established a market risk management system covering all aspects of identification, measurement, monitoring and control The Bank uses gap analysis, duration analysis, foreign exchange exposure analysis, and scenario analysis to identify and measure market risk, conducts regular stress tests, and monitors and controls risk through limit management In respect of managing the interest rate risk in the banking book, the Bank primarily applies measurement tools such as gap management, sensitivity analysis and duration analysis The Bank constantly optimizes a net interest margin analysis system that combines dynamic and static conditions On the basis of quantitative models and qualitative analysis, the Bank continuously reinforces the research and judgment of interest rate trends, so as to provide decision-making basis for tasks such as allocation of asset-liability structure As for trading books, the Bank mainly measures, manages and controls through basis point value, value at risk (VAR), position limit, duration and stop-loss limits to ensure that the anticipated income of the trading books matches the trading exposure In response to exchange rate risk, the Bank sets market risk limits, and effectively manages on-balance sheet foreign exchange risk exposure through derivative financial instruments, such as exchange rate swaps and exchange rate forwards, so as to keep the Bank’s total foreign currency exposures to a low level During the Reporting Period, the cumulative foreign exchange exposure ratio within the scope of consolidation of the Bank was 147% Both the interest rate risk and the exchange rate risk were kept within the internal limits and controllable on the whole The Bank’s market risk-weighted assets measurement uses the simplified standardized approach, and the market risk capital provision covers interest rate risk and specific risks in the trading books, as well as all exchange rate risks and commodity risks As the trading position is relatively small, the market risk capital occupation is low During the Reporting Period, the Bank had no significant and material market risk incidents CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 53 The Group’s exchange rate risk exposure The following table sets forth the distribution of the Group’s foreign exchange rate risk exposure as at December 31, 2024: (Unit: RMB’000) Other currencies USD equivalent equivalent RMB to RMB to RMB Aggregate RMB Total assets 1,746,497,951 80,229,173 17,115,004 1,843,842,128 Total liabilities 1,667,227,817 54,426,162 12,063,321 1,733,717,300 Net exposure amount of balance sheet 79,270,134 25,803,011 5,051,683 110,124,828 (V) Operational Risk Operational risk is the risk of losses due to problems with internal processes, staff and IT systems, and external events It includes legal risk but excludes strategic risk and reputational risk During the Reporting Period, the Bank initiated the optimization of its operational risk management system, defined the objectives and work plan for such optimization, and revised the operational risk management preferences and operational risk management policies Dedicated posts have been set up for operational risk management in the major departments at the head office The Bank determined the methodology for self- assessment of operational risk control, carried out a pilot assessment to explore the formation of a mechanism for the collection of data on operational risk losses, and completed the collection of data on operational risk losses It pushed forward the construction of the business continuity management system at the branch level to meet the standard, carried out the reorganization of the operational risk management system, and put the new operational risk management system into operation for trial run During the Reporting Period, the Bank had no material operational risk incidents (VI) Capital Management 1 Capital management structure, management objectives and management measures The Bank has established a sound capital management system The Board of Directors assumes the ultimate responsibility for capital management, determines the capital risk appetite, reviews and approves the capital management policies, and authorizes the senior management to exercise capital management functions The senior management authorizes the Assets and Liabilities Management Committee to specifically exercise the capital management functions and implement the capital planning and capital adequacy ratio objective management The Assets and Liabilities Management Department is responsible for daily capital management, building the capital management system and process, and taking the lead in implementing the requirements and objectives of the Board of Directors and the senior management on capital management, in order to ensure that the capital management meets the risk appetite requirements CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 55 During the Reporting Period, based on the overall requirements of comprehensive risk management and with reference to the management requirements in relation to Pillar 2 under the Rules on Capital Management of Commercial Banks (《商業銀行資本管理辦法》), the Bank continued to improve its internal capital adequacy assessment system with comprehensive risk coverage At present, the Bank has formed a relatively standardized governance structure, a supporting policy management system, a complete assessment process, a regular monitoring and reporting mechanism, and an internal audit system, which have met the external regulatory requirements and internal management needs The current internal capital adequacy assessment process has a sound governance structure and clear division of responsibilities in place to control various risks effectively The capital level is commensurate with the risk appetites and risk management level and the capital planning is compatible with the operating conditions, risk change trends, and long-term development strategies 3 The management plan for capital planning and capital adequacy ratio The Bank has formulated the Capital Management Plan of CHINA BOHAI BANK CO, LTD for 2023-2027 (《渤海銀行股份有限公司2023-2027年資本管理規劃》) in accordance with the relevant regulatory requirements and submitted it to the Board of Directors for consideration and approval Building on prudent and sound capital management objectives, and taking into account such factors as macroeconomic situation, regulatory policies and the Bank’s strategic transformation planning, risk appetites and risk assessment results, and financing capabilities, the Bank reasonably determined its internal management objective of capital adequacy ratio and prudently estimated the future capital supply and demand Adhering to the overarching principle of “endogenous capital replenishment as the main body and exogenous capital supplementation as the support”, fully considering the availability, timeliness and financing costs of various capital replenishment instruments, balancing short-term and medium-to-long-term capital needs while ensuring the long-term sustainability of different capital sources, the Bank has formulated medium- and long-term capital plans and capital replenishment plans in line with its development goals, aiming to continuously enhance its capital strength and achieve a more balanced capital structure, thereby ensuring robust risk resilience in the Bank’s capital framework The Bank determined the annual capital adequacy ratio management target within the framework of medium- and long-term capital planning, formulated the annual management plan and incorporated it into the bank-wide operation plan to ensure its compatibility with various business plans, and kept capital adequacy ratio at all levels in line with regulatory requirements and internal management targets through such means as dynamic monitoring, analysis and reporting of the capital adequacy ratio, optimization of the asset structure, improvement in the refined management, and timely issuance of capital instruments (VII) Information Technology Risk During the Reporting Period, in accordance with regulatory requirements such as comprehensive risk management and internal control, as well as internal requirements such as risk appetite and information technology risk management policies, the Bank implemented the financial technology transformation and development strategy, effectively performed its duties on the three lines of defense of information technology risk management, continuously improved information technology risk management methods and management mechanism, and continued to promote the rectification of information technology risk issues No material information system emergencies occurred The information technology risk was controllable as a whole, and the information technology risk preference had not been broken, providing a guarantee for the realization of the financial technology strategic goals During the Reporting Period, the Bank had no material information technology risk incidents CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 57 (IX) Strategic Risk During the Reporting Period, the Bank further specified its development path and accelerated the implementation of its strategies The strategic risks were stable and manageable in general No major strategic risk incidents occurred Clarifying strategic direction and further defining development path Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the Bank thoroughly studied and implemented the spirit of the 20th CPC National Congress and the second and third plenary sessions of the 20th CPC Central Committee, the spirit of the Central Financial Work Conference and the Central Economic Work Conference, and the spirit of the important speech made by General Secretary Xi Jinping during his visit to Tianjin Guided by the implementation of the “Three Points on Quantity and Quality” requirements, the Bank promptly revised its Fourth “Five-Year Plan” The revised plan further defines the strategic positioning and development direction of the Bank, ensuring seamless alignment with the next planning cycle while pursuing foresight and guidance for planning Focusing on overcoming challenges and accelerating implementation of strategies The Bank took enhancing quality as the premise and basis to strengthen the foundation of development, making the best use of existing resources as the urgent need and key to operate with greater agility, and optimizing allocation of new resources as the path and pillar to build up development momentum, striving to attain new achievements in high-quality growth (X) Reputational Risk Reputational risk refers to the risk of forming negative evaluation of the Bank by stakeholders, public or media due to the Bank’s behaviors, employees’ behavior or external events, etc, which in turn damages the brand value, has an adverse effect on the normal operation, and even affects market stability and social stability During the Reporting Period, the overall public opinion of the Bank was good, and no major reputation incident occurred During the Reporting Period, the Bank strictly implemented the supervisory requirements, continuously optimized the working mechanism and strengthened the whole process management, in order to actively improve the capability to manage reputational risk: firstly, it strengthened the control over public sentiment, and continuously improved the immediacy and accuracy of dynamic public opinion monitoring; adhered to the concept of prevention-oriented reputational risk management, it continuously increased efforts in public opinion investigation, judgment, warning and alerts, striving to improve forward-looking reputational risk management; it effectively reinforced the managing accountability of the party at the source of the incident, strengthened the risk prevention and control at source, and continuously improved the management quality and efficiency; it actively studied and determined the risks of public opinion and reported to the superior authorities in charge, and appropriately addressed various public opinion incidents; it strengthened the awareness towards reputational risk prevention throughout the Bank and enhanced the ability of the Bank in response to public opinion emergencies by organizing bank-wide reputational risk inspections and drills related to public opinion incidents Secondly, the Bank strengthened positive publicity The Bank proactively fulfilled its responsibilities as a state-owned joint-stock bank Focusing on the themes of “five priorities”, “Three Upgrades” and “Three Points on Quantity and Quality”, the Bank exhibited a “strong” momentum towards new development through multi-channel publicity in different forms including interview conducted by national and mainstream media, special interviews with the management of the Bank and forums and awards, and continuously enhanced its brand image and accumulated reputation capital CHINA BOHAI BANK CO, LTD Annual Report 2024 Management Discussion and Analysis 59 Secondly, the Bank has basically completed its strategic deployment in major provincial capitals and economically important cities across the country The Bank’s network is concentrated in the economically developed regions in China with a focus on supporting national strategies The branches and sub-branches in major free trade zones across the country and the Hong Kong Special Administrative Region can serve as a bridgehead for its international business and services to international customers Thirdly, the Bank has scarce resources such as a wealth management subsidiary and capital operation center licenses Business synergies are created within the Group The increasingly improved and diversified services to customers are conducive to the provision of multi-category, multi-channel, multi-chain and full-cycle integrated financial services solutions to various target customers of the Bank Fourthly, the Bank has become an H-share listed bank It has realized a supervision and improvement mechanism for the Bank’s corporate governance and information disclosure based on capital market rules, which is conducive to the continuous improvement of the corporate governance level of the Bank, expanding international vision and establishing an international brand XIII FUTURE DEVELOPMENT OUTLOOK (I) Economic, Financial and Banking Industry Outlook In 2025, the global trend towards trade protectionism is expected to intensify, potentially exacerbating the “decoupling” of global supply and industrial chains, increasing the risk of trade friction, and heightening geopolitical uncertainties The pattern of deglobalization is likely to deepen further in the coming years In China, the third plenary session of the 20th CPC Central Committee put an emphasis on an economic system reform, and aimed to further comprehensively deepen reforms and advance the modernization of China At the Central Economic Work Conference, it was proposed that in 2025, more proactive and effective macro policies should be implemented: the fiscal policy will be more active by raising the fiscal deficit rate, issuing more ultra-long special treasury bonds, and increasing the issuance and use of local government special-purpose bonds to expand the scope of investment and the use of project capital funds The scale of broad-based fiscal spending is expected to further increase Monetary policy will be appropriately accommodative, with timely cuts to required reserve ratios and interest rates, while leveraging the role of monetary policy instruments in adjusting both the monetary aggregate and structure, and working in concert with the fiscal policy to jointly promote economic recovery and improvement The role of household consumption as a growth engine is expected to significantly strengthen, and investment will continue to grow steadily While external uncertainties may disrupt exports, positive factors remain More proactive and effective macro policies will support the improvement of the business environment of the banking industry In 2025, the banking industry will maintain stable improvement in general In particular, the implementation of the package of new policies is expected to take effect, and the balance sheets of local governments, enterprises, and households are expected to see improvements successively, with the growth rate of asset size remaining generally stable and the asset structure being further optimized Banks will continue to face downward pressure on the pricing of its assets, while deposit rates are expected to decrease in line with policy rates As some medium- and long-term deposits gradually enter the re-pricing cycle, and high-cost interbank liabilities may be further regulated, the pressure on liability costs is expected to ease Considering both assets and liabilities, the declining net interest margins of the banking industry in 2025 is expected to be bottomed out and narrowed The policies in pursuit of steady growth will have a positive effect on the disposal and resolution of risks in key areas, and the local government debts and real estate risks are expected to be mitigated, while asset quality indicators for the banking industry are expected to remain relatively stable Along with the implementation of the policies to issue special treasury bonds and local government special-purpose bonds to supplement bank capital, the capacity of the banking industry in maintaining robust operations is expected to improve CHINA BOHAI BANK CO, LTD Annual Report 2024 Changes in Share Capital and Information on Shareholders 61 Changes in Share Capital and Information on Shareholders I CHANGES IN ORDINARY SHARES There was no change in the Bank’s ordinary shares during the Reporting Period The Bank’s ordinary shares are as follows: December 31, 2023 Changes during December 31, 2024 Number Percentage the Reporting Number Percentage (shares) (%) Period (shares) (shares) (%) Domestic Shares 11,561,445,000 6509 – 11,561,445,000 6509 H Shares 6,200,555,000 3491 – 6,200,555,000 3491 Total ordinary shares 17,762,000,000 10000 – 17,762,000,000 10000 Note: As of the end of the Reporting Period, the Bank had 75 Shareholders, including 11 holders of Domestic Shares and 64 holders of H Shares II SHAREHOLDING OF TOP 10 SHAREHOLDERS OF ORDINARY SHARES As of the end of the Reporting Period, shareholding of top 10 Shareholders of ordinary shares of the Bank was as follows: Number of shares Changes during held at the end of the Reporting Period the Reporting Period Shareholding Name of Shareholder Nature of Shareholder (shares) (shares) percentage (%) Class of shares TEDA Investment Holding Co, Ltd(2) State-owned legal person – 3,612,500,000 2034 Domestic Shares HKSCC Nominees Limited(3) Overseas legal person (105,500) 3,311,646,400 1864 H Shares Standard Chartered Bank (Hong Kong) Limited Overseas legal person – 2,888,555,000 1626 H Shares China Shipping Investment Co, Ltd State-owned legal person – 1,975,315,000 1112 Domestic Shares State Development & Investment Corp, Ltd State-owned legal person – 1,686,315,000 949 Domestic Shares China Baowu Steel Group Corporation Limited State-owned legal person – 1,686,315,000 949 Domestic Shares Oceanwide Industry Co, Ltd Domestic non-state-owned legal person – 1,370,706,739 772 Domestic Shares Tianjin Shanghui Investment Domestic non-state-owned legal person – 1,156,000,000 651 Domestic Shares Holding Company Limited Shine Enterprise (Tianjin) Co, Ltd Domestic non-state-owned legal person – 29,424,331 017 Domestic Shares Tianjin Xianghe Enterprise Management Domestic non-state-owned legal person – 14,712,166 008 Domestic Shares Consulting Co, Ltd Tianjin Firstwood Co, Ltd Domestic non-state-owned legal person – 14,712,166 008 Domestic Shares Notes: (1) The above information is prepared based on the share registration as of December 31, 2024 of the Bank’s Share Registrar (2) TEDA Investment Holding Co, Ltd confirmed that, as of the end of the Reporting Period, in addition to the 3,612,500,000 Domestic Shares of the Bank directly held, Jinlian (Tianjin) Finance Lease Co, Ltd, one of its affiliates, also held 48,438,000 H Share of the Bank through HKSCC Nominees Limited As such, TEDA Investment Holding Co, Ltd and its affiliate held a total of 3,660,938,000 shares of the Bank, representing shareholding of 2061% (3) The shares held by HKSCC Nominees Limited as agent are the total amount of shares in the Bank’s H-share investors’ accounts traded on the trading platform of HKSCC Nominees Limited CHINA BOHAI BANK CO, LTD Annual Report 2024 Changes in Share Capital and Information on Shareholders 63 (IV) State Development & Investment Corp, Ltd State Development & Investment Corp, Ltd was founded in 1995 The company has always adhered to serving the national strategy, regarded promoting structural optimization, building a better life, promoting technological innovation, and leading industrial upgrading as its mission, and played the leading and driving role of state-owned capital in important industries and key fields The company targets to build a worldclass capital investment company with a focus on four major business segments, namely “energy industry”, “digital/technology”, “people’s livelihood and health” and “industrial finance” Registered capital: RMB338 billion; legal representative: FU Gangfeng; Add: International Investment Building, No6-6 Fuchengmen North Street, Xicheng District, Beijing; controlling shareholder: SASAC; actual controller: SASAC As of the end of the Reporting Period, none of the shares of the Bank held by State Development & Investment Corp, Ltd had been pledged or frozen (V) China Baowu Steel Group Corporation Limited China Baowu Steel Group Corporation Limited, formerly known as “Shanghai Baosteel Group Corporation (上海寶鋼集團公司)” and “Baosteel Group Corporation (寶鋼集團有限公司)”, with its predecessor being Baoshan Iron and Steel (Group) Corporation (寶山鋼鐵（集團）公司), was founded on January 1, 1992, and is a legally established wholly state-owned corporation for which the SASAC performs the duties of investor on behalf of the State Council Its main business scope includes permitted projects: retail of publications; wholesale of publications (Projects that are subject to approval in accordance with laws shall only be carried out upon approval by relevant authorities The specific business projects are subject to the approval documents or permits of relevant authorities); general projects: investment activities with self-owned funds; investment management; asset management services invested with self-owned funds; corporate headquarters management; leasing of land use rights; non-residential real estate leasing; taxation services; human resource services (excluding employment intermediary activities and labor dispatch services); market entity registration agency; business agency services; undertaking outsourcing of file services; bidding agency services; big data services; business management consulting (Except for projects subject to approval in accordance with laws, business activities shall be conducted independently with the business licences in accordance with laws) Registered capital: RMB52791101 billion; legal representative: HU Wangming; Add: No1859 Shibo Avenue, China (Shanghai) Pilot Free Trade Zone; controlling shareholder: SASAC; actual controller: SASAC As of the end of the Reporting Period, none of the shares of the Bank held by China Baowu Steel Group Corporation Limited had been pledged or frozen (VI) Oceanwide Industry Co, Ltd Established in November 1992, Oceanwide Industry Co, Ltd is an important investment holding and property leasing platform under China Oceanwide Holdings Group Co, Ltd Registered capital: RMB24 billion; legal representative: SUN Houxing; Add: No 6602 Dongfeng East Street (inside the Oceanwide City Garden (泛海城市花園)), Weifang Hi-Tech Industrial Development Zone, Shandong Province; controlling shareholder: China Oceanwide Holdings Group Co, Ltd; actual controller: LU Zhiqiang As of the end of the Reporting Period, 1,370,706,739 shares of the Bank held by Oceanwide Industry Co, Ltd had been judicially frozen and on the freezing list China Oceanwide Holdings Group Co, Ltd, established in April 1988, mainly engages in investment in infrastructure projects and industries, capital operation & asset management, hotel & property management, among others Registered capital: RMB20 billion; legal representative: LU Zhiqiang; Add: 23/F, Building C, Minsheng Financial Center, No 28 Jianguomennei Avenue, Dongcheng District, Beijing CHINA BOHAI BANK CO, LTD Annual Report 2024 Changes in Share Capital and Information on Shareholders 65 Number of % of Nature of Long positions/short shares directly % of interest the relevant Name of Shareholder interest Class of shares positions or indirectly held in the Bank class of shares LU Zhiqiang (4) Interest in controlled Domestic Shares Long positions 1,370,706,739 772 1186 corporation HUANG Qiongzi (4) Interest of spouse Domestic Shares Long positions 1,370,706,739 772 1186 Tohigh Holdings Co, Ltd (4) Interest in controlled Domestic Shares Long positions 1,370,706,739 772 1186 corporation Oceanwide Group Co, Ltd (4) Interest in controlled Domestic Shares Long positions 1,370,706,739 772 1186 corporation China Oceanwide Holdings Group Co, Ltd (4) Interest in controlled Domestic Shares Long positions 1,370,706,739 772 1186 corporation Oceanwide Industry Co, Ltd Beneficial owner Domestic Shares Long positions 1,370,706,739 772 1186 Tianjin Shanghui Investment Holding Beneficial owner Domestic Shares Long positions 1,156,000,000 651 1000 Company Limited Shandong Gold Financial Holdings Group Beneficial owner H Shares Long positions 327,294,500 184 528 (HongKong) Co, Limited Yichang HEC Health Pharmaceutical Co, Ltd Beneficial owner H Shares Long positions 322,920,500 182 521 Notes: (1) The interests are held by TEDA Investment Holding Co, Ltd through its subsidiary Jinlian (Tianjin) Finance Lease Co, Ltd (2) Standard Chartered Bank (Hong Kong) Limited is wholly owned by Standard Chartered PLC, and therefore Standard Chartered PLC is deemed to be interested in all the shares held by Standard Chartered Bank (Hong Kong) Limited for the purpose of the SFO (3) China Shipping Investment Co, Ltd is wholly owned by COSCO SHIPPING Development Co, Ltd, and in turn owned by China Shipping Group Company Limited as to approximately 3928% China Shipping Group Company Limited is wholly owned by China COSCO Shipping Corporation Limited As such, each of China COSCO Shipping Corporation Limited, China Shipping Group Company Limited and COSCO SHIPPING Development Co, Ltd is deemed to be interested in all the shares held by China Shipping Investment Co, Ltd for the purpose of the SFO (4) Oceanwide Industry Co, Ltd is owned by China Oceanwide Holdings Group Co, Ltd and Oceanwide Group Co, Ltd as to 60% and 40%, respectively China Oceanwide Holdings Group Co, Ltd is owned by Oceanwide Group Co, Ltd and Tohigh Holdings Co, Ltd as to 98% and 2%, respectively Oceanwide Group Co, Ltd is wholly owned by Tohigh Holdings Co, Ltd Tohigh Holdings Co, Ltd is owned by Mr LU Zhiqiang as to 7714% As such, each of Mr LU Zhiqiang, Ms HUANG Qiongzi (spouse of Mr LU Zhiqiang), Tohigh Holdings Co, Ltd, Oceanwide Group Co, Ltd and China Oceanwide Holdings Group Co, Ltd is deemed to be interested in all the shares held by Oceanwide Industry Co, Ltd for the purpose of the SFO Save as disclosed above, the Bank is not aware of any other person (other than Directors, Supervisors and chief executives of the Bank) who has any interest or short position in its shares at the end of the Reporting Period which will be required to be recorded in the register kept under section 336 of the SFO VI ISSUANCE AND LISTING OF EQUITY SECURITIES During the Reporting Period, the Bank had not issued any new shares VII PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES OF THE BANK During the Reporting Period, the Bank and its subsidiary had no purchase, sale or redemption of any listed securities (including the sale of treasury shares) of the Bank As at the end of the Reporting Period, the Bank did not hold any treasury shares of the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 67 Total pre-tax remuneration from the Bank Remunerated during the by the Bank’s Time of Reporting Shareholders Date of joining the Period (RMB or their related Name Position Gender birth Bank Term of office ten thousand) (4) parties MU Binrui Independent non-executive director Male 195609 201805 201809–202501 3500 No ZHU Ning Independent non-executive director Male 197309 201912 202006–202501 3500 No WANG Chairman of the Board of Male 196602 201907 201911–202407 5250 No Chunfeng Supervisors Employees’ representative supervisor 201907–202410 QI Ershi External supervisor Male 195302 201604 201604–202406 5231 No DIAO Qinyi External supervisor Male 195503 201604 201604–202405 4930 No MA Shuming Employees’ representative supervisor Male 196610 201702 202108–202410 13682 No JIN Chao Vice president Male 197903 202106 202107–202407 9014 No Notes: (1) For the changes in the Directors, Supervisors and members of senior management of the Bank as of the date of this annual report, please refer to “(V) Changes in Directors, Supervisors and Members of Senior Management” in this section (2) Among the current Directors, Mr WANG Jinhong was nominated by Shareholder TEDA Investment Holding Co, Ltd; Mr AU Siu Luen was nominated by Shareholder Standard Chartered Bank (Hong Kong) Limited; Ms YUAN Wei was nominated by Shareholder China Shipping Investment Co, Ltd; Mr DUAN Wenwu was nominated by Shareholder State Development & Investment Corp, Ltd; Mr HU Aimin was nominated by Shareholder China Baowu Steel Group Corporation Limited; and Mr ZHANG Yunji was nominated by Shareholder Tianjin Shanghui Investment Holding Company Limited (3) During the Reporting Period, the Directors, Supervisors, and members of senior management of the Bank did not hold shares or stock options of the Bank (4) The amounts disclosed above exclude the remuneration received from the former employer (5) The deferred payment of performance remuneration policy applies to executive Directors (including the chairman), vice presidents and employees’ representative Supervisors (including the chairman of the Board of Supervisors) of the Bank in accordance with the related national requirements The deferred payment period is generally not less than three years The above amount includes the portion of the performance remuneration for previous years paid during the year (6) During the Reporting Period, the Bank paid a director allowance to independent non-executive Directors for the period from July 1, 2023 to June 30, 2024, and paid a supervisor allowance to external Supervisors for the period from January 1, 2023 to June 30, 2024 During the Reporting Period, employees’ representative Supervisors of the Bank did not receive a supervisory allowance for their duties as employees’ representative Supervisors (7) During the Reporting period, the Bank paid a total remuneration of RMB469,700 for the period from January 1, 2024 to December 31, 2024 to the assigned leader of discipline inspection team (8) Mr WANG Jinhong worked for the Bank during the period from December 2006 to December 2019 and has worked for the Bank since April 2023 For details, please refer to the biographical information of Mr WANG Jinhong disclosed in this section CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 69 4 Salaries of employees who have a significant impact on risks There are 410 people in the Group, including the middle managers of the head office, senior management personnel of the subsidiary and the person in charge of the risk management department of branches, who have a significant impact on risks Their total remuneration in 2024 amounted to RMB43997 million, among which no less than 40% of the performance-based remuneration will be deferred for three years, which meets regulatory requirements 5 Deferred payment of remuneration and non-cash remuneration The Bank implemented the deferred payment and reclaiming of performance-based remuneration in accordance with the requirements under the Guidelines on Healthy Remuneration Supervision for Commercial Banks and the Guidance Opinions on the Establishment and Optimization of System for Reclaiming of performance-base Remuneration for Banks and Insurance Companies The reclaiming of performance-based remuneration includes reclaiming paid performance-based remuneration and terminating payment of unpaid performance remuneration For relevant responsible persons who have violated regulations and disciplines and whose cases have not yet been concluded, or caused significant exposure to risks within the scope of their responsibilities due to obvious negligence or failure to exercise prudent management, the Bank shall reclaim and withhold their performance-based remuneration of the corresponding periods In 2024, the Bank reclaimed and withheld performance- based remuneration of 612 employees in an amount of RMB2403 million During the Reporting Period, the Bank did not implement any equity incentive scheme 6 Exceptions to the original remuneration package During the Reporting Period, there were no exceptions beyond the original remuneration package (III) The Positions of Directors, Supervisors and Members of Senior Management at Shareholders Name Employer Position Term of service AU Siu Luen Standard Chartered Bank Managing director May 2023 (Hong Kong) Limited to present YUAN Wei China Shipping Investment Director August 2021 Co, Ltd to present ZHANG Yunji Tianjin Shanghui Investment Chairman of the September 2009 Holding Company Limited board of directors to present CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 71 Mr ZHANG Yunji Mr ZHANG has a master’s degree He once worked in Tianjin Branch of Industrial and Commercial Bank of China Limited (中國工商銀行股份有限公司天津市分行) for a long time, where he served as an assistant to the president and a vice president In addition, he used to serve as the chairman of the board of directors and the general manager of Tianjin Rongsheng Xinye Investment and Development Co, Ltd He currently serves as a non-executive Director of the Bank and the chairman of the board of directors of Tianjin Shanghui Investment Holding Company Limited Mr QU Hongzhi Mr QU is a professorate senior economist with a master’s degree in finance and a doctor’s degree in management He once worked in China Construction Bank Corporation, where he served as the general manager of asset security department and general manager of legal affairs department of Tianjin branch, the president of Nankai sub-branch, the president of Heping sub-branch, an assistant to the president, a vice president and a member of the party committee of Tianjin branch, and the deputy secretary of the party committee and a vice president of Jiangsu branch He currently serves as the deputy secretary of the party committee, an executive Director and the president of the Bank Mr TSE Yat Hong Mr TSE is a Fellow of the Hong Kong Institute of Certified Public Accountants, and a Fellow of Certified Public Accountants (FCPA) of CPA Australia with a bachelor’s degree He once served as the chief financial officer and company secretary of Shenzhen International Holdings Limited, a joint company secretary and non-executive director of Shenzhen Expressway Company Limited, and an independent non-executive director of Sky Light Holdings Limited and E-Star Commercial Management Company Limited He currently serves as an independent non-executive Director of the Bank and an independent non-executive director of China Huirong Financial Holdings Limited and Radiance Holdings (Group) Company Limited Mr SHUM Siu Hung Patrick Mr SHUM has a bachelor’s degree He served as the China chief risk officer and vice president of ABN AMRO, the senior credit approval officer and senior vice president, the professional credit approval officer of China real estate of DBS Bank (China) Limited, the director and the credit approval officer of commercial real estate (Asia, excluding Japan) of Deutsche Bank, the vice president and director of credit risk department of OCBC Wing Hang Bank (China) Limited, the director of the risk department in China and the head of credit risk in the Great China Region of Maybank He currently serves as an independent non-executive Director of the Bank Ms WANG Aijian Ms WANG is a professor with a doctor’s degree She served as a teacher of the Department of Finance of Tianjin University of Finance and Economics, a vice dean of the School of Economics of Tianjin University of Finance and Economics, a director of the Office of Academic Development of Tianjin University of Finance and Economics and the vice president of Tianjin University of Finance and Economics She currently serves as an independent non-executive Director of the Bank, a director of Coordinated Innovation Center For Binhai Finance in China (CICBFC) under Tianjin University of Finance and Economics, an independent director of Tasly Pharmaceutical Group Co, Ltd (天士力醫藥集團股份有限公司), and an independent director of GuoDu Securities Co, Ltd (國都證券股份有限公司) CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 73 Mr LI Chengbang Mr LI has a master’s degree and a doctoral degree in economics He served as a principal staff member of the Tianjin Discipline Inspection Committee of the Communist Party of China, a principal staff member of the Fifth Division and the Third Division of the General Office of the Tianjin Municipal People’s Government, the deputy director of the General Division of the General Office of the Tianjin Municipal People’s Government, the deputy director (presiding over the work) and the director of the Eighth Division of the General Office of the Tianjin Municipal People’s Government, the director of the Sixth Division of the General Office of the Tianjin Municipal People’s Government, the director of the Office of the Board of Directors of the Bank He currently serves as an employees’ representative Supervisor, the director of the Office of the Board of Supervisors of the Bank and a director of Nanyang Country Bank Co, Ltd Ms ZHANG Hui Ms ZHANG is an economist with a master’s degree and a doctoral degree in economics She served as a senior staff member of the First Division of Banking Administration, a senior staff member of the Supervision Division of Foreign Banks, a senior staff member of the Supervision Division of Foreign Banks and Other Financial Institutions of the Tianjin Branch of the People’s Bank of China, a principal staff member and deputy director of the First Supervision Division of Joint Stock Banks of Tianjin Bureau of China Banking Regulatory Commission, the secretary of the Party Committee (黨委秘書) of the General Office (Party Committee Office), the assistant general manager, the deputy general manager (presiding over the work) and the general manager of the Finance Department, the general manager of the Internal Control and Compliance Department, a member of the Party Committee and vice president (ie level of the president of a tier-one branch) of the Beijing Branch of the Bank She is currently an employees’ representative Supervisor, the general manager of the Finance Department and the general manager of the Assets and Liabilities Management Department of the Bank Senior Management The detailed biography of Mr QU Hongzhi is set out in the section headed “Directors” Mr DU Gang Mr DU has a master’s degree and once worked in the PBoC, the CBRC and CBIRC He was once an executive Director of the Bank He is currently a member of the party committee, a vice president and the secretary to the Board of Directors of the Bank Mr XIE Kai Mr XIE is a senior engineer with a doctor’s degree in finance He once served as a secretary at deputy-director level of the secretariat of the office, the deputy director and director of e-commerce department of electronic banking department, the director of innovation business department of electronic banking department, a member of the party committee and a vice president of Jiangsu Nantong branch, the director of mobile finance department of electronic banking department, the director of mobile finance department of internet finance department, the director of business cooperation department of e-financing department, the deputy general manager of technology and product management bureau, the deputy general manager of internet banking department, and the deputy general manager of the county area banking & inclusive finance internet finance management centre of Agricultural Bank of China He is currently a vice president of the Bank Mr LI Jianguo Mr LI is a senior economist with a bachelor’s degree and a master’s degree He served as member of the Party Committee and vice president of the Sichuan Leshan Branch of Agricultural Bank of China; deputy director (on secondment) of Credit Management Division, deputy general manager of the Credit Management Department and Credit Review and Approval Center, member of the Party Committee and assistant to general manager of the Business Department of Sichuan Branch; secretary of the Party Committee and president of Luzhou Branch; member of the Party Committee and deputy general manager of the Business Department of Sichuan Branch; secretary of the Party Committee and president of Sichuan Leshan Branch; a senior expert and general manager of the Internal Control & Compliance Supervision Department of Sichuan Branch of Agricultural Bank of China He is currently a vice president of the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 75 On June 28, 2024, Mr LIU Lanbiao was elected as an independent non-executive Director of the Bank at the 2023 annual general meeting of the Bank On January 6, 2025, his qualification as an independent director was approved by the National Financial Regulatory Administration Mr LIU Lanbiao has served as an independent non-executive Director of the fifth session of the Board of Directors of the Bank, a member of each of the Nomination and Remuneration Committee under the Board of Directors, the Risk Management and Green Finance Committee under the Board of Directors and the Related Party Transactions Control Committee under the Board of Directors since January 6, 2024 Mr LIU Lanbiao has obtained the legal advice as set out in Rule 309D of the Listing Rules on December 5, 2024 and confirmed that he understands his responsibilities as a director of the Bank Upon expiry of his term of employment as a professional manager, Mr ZHAO Zhihong resigned as an executive Director of the Bank, a member of the Risk Management and Green Finance Committee of the Board of Directors and the Related Party Transactions Control Committee of the Board of Directors due to his age, with effect from July 19, 2024 In order to devote more time to his other business commitments, Mr ZHU Ning resigned as an independent non-executive Director of the Bank, a member of the Nomination and Remuneration Committee of the Board of Directors and the Audit and Consumer Rights Protection Committee of the Board of Directors, with effect from January 3, 2025 In accordance with the requirement of “independent directors shall not hold office for over six years in total in a banking or insurance institution” under the Code of Corporate Governance of Banking and Insurance Institutions, Mr MAO Zhenhua resigned as an independent non-executive Director of the Bank and the chairman of the Nomination and Remuneration Committee of the Board of Directors, with effect from January 6, 2025 On January 20, 2025, the sixth session of the Board of Directors was elected at the 2025 first extraordinary general meeting of the Bank, comprising of Mr WANG Jinhong and Mr QU Hongzhi as executive Directors, Mr AU Siu Luen, Mr QU Defu, Mr LIU Zhenyu, Ms YUAN Wei, Mr DUAN Wenwu, Mr HU Aimin and Mr ZHANG Yunji as independent non-executive Directors, and Mr TSE Yat Hong, Mr SHUM Siu Hung Patrick, Ms WANG Aijian, Mr LIU Junmin, Mr LIU Lanbiao and Mr OUYANG Yong as independent non-executive Directors Mr DU Gang ceased to be an executive Director and a member of the Development Strategy and Inclusive Finance Committee of the Board of Directors of the Bank with effect from the same date due to expiry of his term of office Mr MU Binrui ceased to be an independent non-executive Director, the chairman of the Risk Management and Green Finance Committee, and the Related Party Transactions Control Committee, and a member of the Audit and Consumer Rights Protection Committee of the Board of Directors of the Bank with effect from the same date due to expiry of his term of office The qualifications of Mr QU Defu, Mr LIU Zhenyu and Mr OUYANG Yong are subject to the approval by the regulatory authority On January 20, 2025, Mr WANG Jinhong was elected as the chairman of the sixth session of the Board of Directors of the Bank, and Mr AU Siu Luen was elected as the vice chairman of the sixth session of the Board of Directors of the Bank at the first meeting of the sixth session of the Board of Directors of the Bank Changes in Supervisors On May 28, 2024, the resignation of Mr DIAO Qinyi as an external Supervisor of the Bank and the chairman of the Supervision Committee of the Board of Supervisors was approved at the 22nd meeting of the fifth session of the Board of Supervisors of the Bank, with effect from the same date CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 77 (VI) Changes in the Information of Directors and Supervisors Mr QU Hongzhi, an executive Director of the Bank, became a member of each of the Risk Management and Green Finance Committee and the Related Party Transactions Control Committee of the Bank with effect from January 20, 2025 Mr SHUM Siu Hung Patrick, an independent non-executive Director of the Bank, became a member of each of the Risk Management and Green Finance Committee and the Related Party Transactions Control Committee of the Bank with effect from January 20, 2025 Save as the disclosures in this section, no information on Directors or Supervisors is subject to disclosure in accordance with Rule 1351B(1) of the Listing Rules (VII) Directors, Supervisors and Chief Executives’ Interests in the Bank As of the end of the Reporting Period, none of our Directors, Supervisors and chief executive had any interests or short positions in the shares, underlying shares and debentures of our Bank or any associated corporations (as defined in Part XV of the SFO) which were required to be entered in the register kept by the Bank pursuant to section 352 of the SFO, or which were required to be notified to the Bank and the Hong Kong Stock Exchange pursuant to the Model Code II EMPLOYEES (I) The Number and Structure of Employees As of the end of the Reporting Period, the Group had 13,824 employees, including 6,411 male employees and 7,413 female employees The age structure, educational background and professional post structure of the employees are as follows: 1 Age structure of employees Number of Age employees Structure (%) Aged 30 or below 3,084 2231 Aged 31–35 3,247 2349 Aged 36–40 3,529 2553 Aged 41–45 2,054 1486 Aged 46–50 979 708 Aged over 50 931 673 Total 13,824 10000 2 Educational background of employees Number of Educational background/degree employees Structure (%) Postgraduate/Master’s degree and above 4,052 2931 Undergraduate/Bachelor’s degree 9,577 6928 College and lower 195 141 Total 13,824 10000 CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 79 III BRANCHES As of the end of the Reporting Period, the Bank has established outlets in 25 provinces, municipalities and autonomous regions, 5 sub-provincial cities and the Hong Kong Special Administrative Region, covering 65 key cities nationwide, and has established 34 tier-one branches (including 3 branches in Suzhou, Qingdao and Ningbo under direct management of the head office and 1 overseas branch), 35 tier-two branches, 291 sub-branches, and 16 small and micro community sub-branches The total number of officially opened outlets reached 376 Tier-two branches and Number of sub-branches employees under in the jurisdiction institutions Number of (including under Name Address employees community) jurisdiction Head Office 218 Haihe East Road, Hedong District, 2,816 – – Tianjin Capital Operation 5F, Building 1, No 28, Jianguomennei 75 – – Center Avenue, Dongcheng District, Beijing Tianjin Branch 8-15/F, Part 1/F, Part 2/F, China Bohai Bank 411 1/51 1,060 Tower, 218 Haihe East Road, Hedong District, Tianjin Tianjin Pilot Free No 3 Building, Financial Center, No 158 25 – – Trade Zone West 3rd Road, Tianjin Pilot Free Trade Branch Zone (Airport Economic Area) Beijing Branch 1F-3F, East Tower C, Chemsunny World 298 1/28 420 Trade Center, 28 Fuxingmennei Street, Xicheng District, Beijing Hangzhou Branch Bohai Bank Building, No 117 Tiyuchang 198 3/15 320 Road, Xiacheng District, Hangzhou City, Zhejiang Province Taiyuan Branch No 308, Changzhi Road, Xiaodian District, 192 2/11 248 Taiyuan City, Shanxi Province Chengdu Branch No 87, Jinrongcheng South Road, High- 188 1/16 216 Tech Zone, Chengdu City, Sichuan Province Jinan Branch Building 3, Lushang Olympic City, 9777 187 4/13 346 Jingshi East Road, Jinan City, Shandong Province Shanghai Branch No 155 Yincheng Road, China (Shanghai) 197 0/16 195 Pilot Free Trade Zone Shanghai Pilot Free 2/F of No 1229 Century Avenue, Units 1-2 on 108 0/01 10 Trade Zone Branch 1/F, 2/F and 15/F of No 1239 Century Avenue, China (Shanghai) Pilot Free Trade Zone Shenzhen Branch 1B01, 1B02, 1B03, 2B01, 14/F, 23/F, 24/F, 194 1/13 298 25/F and 26/F, Block B, Aerospace Science and Technology Plaza, No 1288 Hyde 3rd Road, Yuehai Street, Nanshan District, Shenzhen City, Guangdong Province Nanjing Branch No 213 Jiangdong Middle Road, Jianye 228 6/10 356 District, Nanjing City, Jiangsu Province CHINA BOHAI BANK CO, LTD Annual Report 2024 Directors, Supervisors, Members of Senior Management, Employees and Branches 81 Tier-two branches and Number of sub-branches employees under in the jurisdiction institutions Number of (including under Name Address employees community) jurisdiction Haikou Branch S5 Podium Building, Guorui City, No 11 78 0/01 15 Guoxing Avenue, Meilan District, Haikou City, Hainan Province Qingdao Branch Office Building T8, Shangshi Center, 195 92 0/04 57 East Hong Kong Road, Laoshan District, Qingdao City, Shandong Province Ningbo Branch 1F-3F, Emeke Building, No 188 Dazha 79 0/02 26 Road, Jiangbei District, Ningbo City, Zhejiang Province Nanning Branch 1F-5F, Podium Building, King’s 85 0/03 35 International Merchant Center, 59 Jinhu Road, Qingxiu District, Nanning City, Guangxi Zhuang Autonomous Region Nanchang Branch Cuilin Building, 1266 Fenghe Middle 93 0/06 56 Avenue, Honggutan New District, Nanchang City, Jiangxi Province Guiyang Branch No 1, 1F and No 1, half B1, Building 79 0/02 22 9, Business District, One Guiyang International Finance Center, Lincheng Road, Guanshanhu District, Guiyang City, Guizhou Province Kunming Branch No 391, Rixin Middle Road, Xishan 82 0/02 27 District, Kunming City, Yunnan Province Hong Kong Branch Suites 1201-1209 and 1215-1216, 12/F, 64 – – Two International Finance Centre, 8 Finance Street, Central, Hong Kong Note: The information in the above table does not include the subsidiary CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 83 3 Convening an interim Board meeting When the Shareholder(s) individually or jointly holding 10% or more of the total voting shares of the Bank propose to convene an interim Board meeting, the chairman of the Board shall convene the meeting within five working days 4 Inquiring of the Board of Directors Shareholders who provide the Bank with a written document certifying the class and number of shares they hold in the Bank, and upon authentication of the identity of the Shareholder by the Bank, shall have the right to obtain relevant information of the Bank in accordance with laws and regulations and the Articles of Association of the Bank, including the Articles of Association of the Bank, share register, minutes of the Shareholders’ general meetings, resolutions of Board meetings and meetings of the Board of Supervisors, the latest audited financial and accounting report and the auditor’s report, etc For contact details of Shareholders’ inquiries to the Bank, please see “Corporate Profile” in this annual report For detailed information on the Shareholders’ rights of the Bank, please see the Articles of Association published on the websites of the HKEX and the Bank (II) Shareholders’ Communication Policy The Bank has formulated the “Shareholders’ Communication Policy”, which lists the purpose, general policies, communication channels, communication with the investment market and Shareholder privacy of its Shareholders’ communication policy The communication channels between the Bank and Shareholders include: Shareholders’ inquiries • The Bank has disclosed the company’s contact information on its website so that Shareholders can make inquiries about the Bank • Shareholders may inquire about their shareholding at the Share Registrar of the Bank • Shareholders may request public information of the Bank at any time Corporate communications • Corporate communications (within the meaning of the Listing Rules), including but not limited to (i) directors’ reports, annual accounts together with auditors’ report, (ii) interim reports, (iii) notices of meetings, (iv) listing documents, (v) circulars, (vi) proxy forms, (vii) application proof, and (viii) post hearing information pack • Corporate communications should be made available to the Shareholders in a timely manner and should be written in plain Chinese and English CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 85 During the Reporting Period, the Bank convened 3 general meetings in strict compliance with relevant laws and regulations, the Bank’s Articles of Association and the Rules of Procedures for General Meetings of Shareholders to actively interact and communicate with Shareholders The Bank timely disclosed results announcements, periodic reports, announcements, circulars, notices of Shareholders’ meetings and other information in accordance with regulatory requirements, and continuously updated the Bank’s website to protect investors’ right to know The Bank maintained communication with investors and responded to investor concerns in a timely manner through multiple channels After review, the Bank’s Shareholders’ Communication Policy continued to be effective during the Reporting Period, and the Bank’s communication with Shareholders and investors complied with relevant regulations (III) Introduction to the General Meeting During the Reporting Period, the Bank convened 3 general meetings The relevant information is as follows: The Bank convened the 2024 first extraordinary general meeting in Tianjin on March 5, 2024 Shareholders or their proxies attending the general meeting represented a total of 13,244,442,978 ordinary shares with voting rights of the Bank 12 Directors of the Bank attended the meeting, and the Supervisors and the secretary to the Board of Directors of the Bank were present at the meeting The resolution on special authorization plan for financial bonds, tier-two capital bonds and undated capital bonds was considered and approved at the meeting and a resolution was formed The meeting also reviewed the 2022 Assessment Report on the Quality and Qualification of Major Shareholders and Relevant Matters The Bank convened the 2023 annual general meeting in Tianjin on June 28, 2024 Shareholders or their proxies attending the general meeting represented a total of 13,275,413,028 ordinary shares with voting rights of the Bank 12 Directors of the Bank attended the meeting, and the Supervisors and the secretary to the Board of Directors of the Bank were present at the meeting 14 resolutions were considered and approved at the meeting and the matters considered included: the Report of the Board of Directors for 2023, the Report of the Board of Supervisors for 2023, the Report of Final Financial Accounts for 2023, the Profit Distribution Plan for 2023, the Financial Budget Report for 2024, the Adjustments to the Investment Plan for 2023, the Investment Plan for 2024, the remuneration of Mr LI Fuan for 2022, the election of independent non-executive Directors, the election of external Supervisor and the re-appointment of external auditors for 2024 The meeting also reviewed 10 written reports, including the Reports on Resignation of Independent Non-Executive Directors, the Reports on the Resignation of External Supervisors, the 2023 Special Report on Related Party Transactions, the Board of Supervisors’ 2023 Assessment Report on the Performance of Duties of the Board of Directors, Senior Management and Their Members, the 2023 Report on Self-evaluation of the Board of Supervisors and Assessment of the Performance of Duties of Supervisors, and the Report of the Board of Supervisors on Independent Opinions on Related Matters in 2023 The Bank convened the 2024 second extraordinary general meeting in Tianjin on September 19, 2024 Shareholders or their proxies attending the general meeting represented a total of 13,219,446,651 ordinary shares with voting rights of the Bank 10 Directors of the Bank attended the meeting, and the Supervisors of the Bank were present at the meeting The resolution on the proposed mandate in relation to the potential very substantial disposal through public tender was considered and approved at the meeting and a resolution was formed The meeting also reviewed the Report on Resignation of an Executive Director The domestic legal advisor of the Bank witnessed the convening of the above meetings and other related matters in accordance with the law, and believed that the meetings were in compliance with relevant laws and regulations, regulatory documents and the Articles of Association For details of the meetings, please refer to the circular, notices and the poll results announcement of the relevant general meetings published on the websites of the HKEX and the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 87 (II) The Responsibility of the Board of Directors The Board of Directors is accountable to the Shareholders’ general meeting and responsible for operation and management of the Bank Its principal responsibilities include convening Shareholders’ general meeting and executing resolutions of general meeting, formulating development strategy and medium and long term development plans and monitoring the implementation of strategies, determining operational plans and investment programs, examining and approving capital management plans, formulating annual financial budget plans, final accounting plans, risk capital allocation plans, profit distribution plans and loss recovery plans, etc For detailed information on the responsibility of the Board of Directors of the Bank, please see the Articles of Association published on the websites of the HKEX and the Bank (III) Board Meetings and the Work of the Board During the Reporting Period, the Board of Directors of the Bank adapted to the evolving international and domestic economic and financial landscape, fully leveraged its role as the decision-making body, and ensured the high-quality completion of the Bank’s strategic tasks and the achievement of its operational management objectives The Board of Directors played a strategic guiding role, firmly upheld the direction and path of high-quality development, and steadily advanced the implementation of the strategic plan; focused on key issues, scientifically formulated business plans, and consolidated a healthy and stable development foundation; supplemented capital through multiple channels to enhance its capital strength and optimized capital management efficiency; improved the comprehensive risk management mechanism, strengthened compliance culture construction, and strictly implemented internal control, compliance, and risk management responsibilities; continuously refined its incentive and restraint mechanisms, strengthened the supervision and evaluation of the senior management’s performance, and fully utilized the guiding role of performance assessments; performed key functions such as equity affairs management and information disclosure in accordance with laws and regulations, further enhanced the protection of investor and consumer rights, actively accepted public supervision, and proactively fulfilled social responsibilities; continued to strengthen its own development, standardized its duties and responsibilities, and consistently improved its scientific decision-making capabilities During the Reporting Period, the Board of Directors of the Bank convened 15 meetings, at which 89 proposals were deliberated, and 24 reports were debriefed The Board of Directors considered resolutions such as the annual final accounts report, annual budget report, annual profit distribution plan, annual group performance evaluation indicators, annual review of the corporate governance policy, disposal of assets, material related party transactions, external donations, change of Directors, change of senior management, appraisal results of Directors and mutual evaluation of independent Directors, annual assessment and evaluation of senior management members, assessment and evaluation of the terms of office of professional managers, deferred payment and reclaiming of performance remuneration, amendments to the Fourth “Five-Year Plan”, work report of senior management, report on comprehensive risk management, assessment report on internal capital adequacy, report on consolidated statement management, report on appraisal of consumer rights protection, report on liability quality management, work report on green finance and various information disclosure reports It formulated the comprehensive risk management measures, the financial asset risk classification measures and the criminal case risk control and management measures, and revised basic systems such as the operational risk management policy, information technology risk management policy and business continuity management policy The Board of Directors also debriefed reports including the special report on related party transactions, the internal control evaluation report and auditor’s statement, the report on audit work of the Audit and Consumer Rights Protection Committee of the Board of Directors, the internal audit work report, the working plans of the Board of Directors and its special committees, self-assessment report on data governance, development plan for inclusive finance business, assessment report on strategy implementation, report on the Bank’s regulatory situations & the Bank’s rectification report and the report on consumer complaints CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 89 (V) Independent Opinion Mechanism, Independence and Work of Independent Non-Executive Directors According to the Articles of Association of the Bank, the Board of Directors of the Bank consists of executive Directors and non-executive Directors (including independent non-executive Directors) The independent non-executive Directors shall represent at least one-third of the total members of the Board The structure of the Board of Directors is scientific and balanced, and non-executive Directors (including independent non-executive Directors) account for the majority to ensure that the Board of Directors can fully obtain independent views and opinions, and independently and effectively perform decision-making functions In order to ensure that independent non-executive Directors can effectively exercise their functions and powers, the Bank shall provide independent non-executive Directors with the following necessary working conditions: (1) The Bank shall ensure that independent non-executive Directors enjoy the same right to know as other Directors For matters to be decided on by the Board of Directors, the Bank shall notify independent non-executive Directors in advance according to the statutory time and provide them with sufficient information Independent non-executive Directors may request supplementary information if they consider the information insufficient When two or more independent non-executive Directors believe that the information is insufficient or the argumentation is not clear, they may jointly propose to the Board of Directors in writing to postpone the meeting of the Board of Directors or postpone the deliberation of the matter, and the Board of Directors shall adopt such proposal; (2) The Bank shall provide the necessary working conditions for independent non-executive Directors to perform their duties The secretary to the Board of Directors shall actively provide assistance to independent non-executive Directors in performing their duties, such as introducing the situations and providing materials If independent opinions, proposals and written statements made by independent non-executive Directors shall be announced, the secretary to the Board of Directors shall handle the matter in relation to the announcement in a timely manner; (3) When independent non-executive Directors exercise their functions and powers, relevant personnel of the Bank shall actively cooperate and shall not refuse, hinder or hide anything or interfere in their independent exercise of functions and powers; (4) The cost of engaging an intermediary agency and other reasonable expenses required for the exercise of duties by independent non-executive Directors shall be borne by the Bank; (5) The Bank shall offer appropriate allowances to independent non-executive Directors Standards for allowances shall be formulated by the Board of Directors and reviewed and approved by the Shareholders’ general meeting In addition to the above-mentioned allowances, independent non-executive Directors shall not obtain other additional and undisclosed benefits from the Bank, its substantial Shareholders, or interested institutions and personnel The Evaluation Methods on Directors’ Performance of the Bank stipulates that the Bank shall annually evaluate the performance of Directors, mainly based on five dimensions including fulfilling the duty of loyalty, fulfilling the duty of diligence, professionalism in performance of duties, independence and morality in performance of duties, and compliance with regulations in performance of duties The evaluation of the duty performance of independent non-executive Directors shall also include the following: (1) Should not be influenced by substantial Shareholders, members of the senior management, and other entities and individuals with interests in the Bank, and should pay attention to safeguarding the legitimate rights and interests of small and medium Shareholders and other stakeholders; (2) Express objective, impartial and independent opinions on matters discussed at the Shareholders’ general meeting or the Board meeting; (3) Other matters stipulated by laws, regulations, regulatory requirements and the Articles of Association of the Bank For detailed information on the Bank’s requirements for independent non-executive Directors, please refer to the Articles of Association of the Bank published on the websites of the HKEX and the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 91 (VIII) Special Committees under the Board of Directors The Bank’s Board of Directors has set up the Risk Management and Green Finance Committee (and the Related Party Transactions Control Committee subordinated to it), the Audit and Consumer Rights Protection Committee, the Nomination and Remuneration Committee and the Development Strategy and Inclusive Finance Committee Each special committee provides professional advices to the Board of Directors and makes decisions on special matters according to the authorization of the Board of Directors During the Reporting Period, the special committees under the Board of Directors convened 34 meetings in total, at which 81 proposals were deliberated and 17 reports were debriefed, details of which are as follows: 1 Risk Management and Green Finance Committee of the Board of Directors (1) Personnel composition As of the end of the Reporting Period, the Risk Management and Green Finance Committee of the Board of Directors of the Bank consisted of four members, being independent non-executive Directors Mr MU Binrui and Mr TSE Yat Hong; non-executive Directors Mr AU Siu Luen and Mr ZHANG Yunji, respectively, and was chaired by Mr MU Binrui (2) Main responsibilities The main responsibilities of the Risk Management and Green Finance Committee of the Board of Directors of the Bank include: setting the basis and method for the level of risk that the Bank can undertake; reviewing risk appetite and risk management policies, systems and basic principles; reviewing the disposal of assets and provision of external guarantees that are not within the scope of business operations; supervising the senior management’s control over risks, regularly debriefing the senior management’s report on risks and risk management status, timely putting forward opinions on risk management and internal control, reporting to the Board of Directors when necessary, and informing the senior management and the Board of Supervisors; where necessary, debriefing the senior management’s reports on compliance with relevant laws and regulations, regulatory requirements, policies of the Bank, rules and regulations, anti-money laundering arrangements and self-inspection results; researching and formulating green finance strategy; debriefing the senior management’s report on implementation of the green finance strategy, supervising and evaluating the implementation of the green finance strategy; reporting to the Board of Directors on the implementation of the green finance strategy and submitting comments and recommendations; authorizing the affiliated Related Party Transactions Control Committee to exercise relevant functions and powers over related party transactions control and performing other duties as assigned by the Board of Directors (3) Meetings and work During the Reporting Period, the Risk Management and Green Finance Committee of the Board of Directors of the Bank held a total of 10 meetings, at which 28 proposals were deliberated and 4 reports were debriefed The Risk Management and Green Finance Committee of the Board of Directors reviewed the report on comprehensive risk management of the Bank, risk assessment report of derivatives trading business, report on liability quality management, summary of prevention and control work on non-compliance cases, comprehensive risk management measures, assessment report on internal capital adequacy, statement on risk appetite at group level, implementation of the expected credit loss method, information technology risk management policy, business continuity management policy and work report on green finance and other proposals, and debriefed the report of the chief risk management officer and the employee conduct assessment report It also required the senior management to strengthen key risk control from multiple dimensions, continuously improve risk concentration indicators, consistently enhance the Bank’s risk management capabilities, accelerate the development of green finance, and make every effort to excel in the field of green finance CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 93 (3) Meetings and work During the Reporting Period, the Related Party Transactions Control Committee of the Board of Directors of the Bank held a total of six meetings, at which 9 proposals were deliberated The Related Party Transactions Control Committee of the Board of Directors attached great importance to the management of related party (connected) transactions, and strictly examined matters in relation to material related party transactions It also reviewed the special report on related party transactions for the year, annual report and interim report, and expressed opinions on the authenticity, accuracy and integrity of information disclosure of related party (connected) transactions It accepted the filing of general related party transactions that occur on a daily basis and oversaw the compliance of general related party transactions During the Reporting Period, the attendance of the members of the Related Party Transactions Control Committee of the Board of Directors of the Bank is as follows: Number of Number of Number of scheduled attendances attendances Number of Name attendances in person by proxy absences MU Binrui 6 6 – – AU Siu Luen 6 6 – – ZHANG Yunji 6 6 – – TSE Yat Hong 6 6 – – ZHAO Zhihong 3 3 – – CHI Guotai 2 2 – – Notes: (1) During the Reporting Period, the Related Party Transactions Control Committee of the Board of Directors of the Bank convened six off-site meetings (2) Please refer to “Directors, Supervisors, Members of Senior Management, Employees and Branches: Changes in Directors, Supervisors and Members of Senior Management” in this annual report for the changes in the Directors of the Bank during the Reporting Period 3 Audit and Consumer Rights Protection Committee of the Board of Directors (1) Personnel composition As of the end of the Reporting Period, the Audit and Consumer Rights Protection Committee of the Board of Directors of the Bank consisted of six members, being independent non-executive Directors Mr TSE Yat Hong, Mr MU Binrui, Mr ZHU Ning and Mr SHUM Siu Hung Patrick; non-executive Directors Mr AU Siu Luen and Ms YUAN Wei, respectively, and was chaired by Mr TSE Yat Hong All members of the Audit and Consumer Rights Protection Committee of the Board of Directors are non-executive Directors, and the majority is the independent non-executive Directors, which complies with the Listing Rules and the Articles of Association of the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 95 During the Reporting Period, the attendance of the members of the Audit and Consumer Rights Protection Committee of the Board of Directors of the Bank is as follows: Number of Number of Number of scheduled attendances attendances Number of Name attendances in person by proxy absences TSE Yat Hong 8 8 – – AU Siu Luen 8 8 – – YUAN Wei 8 8 – – MU Binrui 8 8 – – ZHU Ning 8 8 – – SHUM Siu Hung Patrick 8 8 – – Notes: (1) During the Reporting Period, the Audit and Consumer Rights Protection Committee of the Board of Directors of the Bank convened four off-site meetings (2) Please refer to “Directors, Supervisors, Members of Senior Management, Employees and Branches: Changes in Directors, Supervisors and Members of Senior Management” in this annual report for the changes in the Directors of the Bank during the Reporting Period (4) Audit and Consumer Rights Protection Committee of the Board reviewed the annual financial report for 2024 The Audit and Consumer Rights Protection Committee of the Board of the Bank performed the following duties during the review of the 2024 Annual Report in accordance with the relevant policies of the Bank: at the on-site auditing stage of the accountants for annual audit, the 35th meeting of the Audit and Consumer Rights Protection Committee of the fifth session of the Board was held on December 19, 2024, at which the committee listened to the work report of the external auditor, Deloitte Touche Tohmatsu, for audit plan on the annual financial report for 2024 and pre-audit work progress, and put forward advices and requests In the process of auditing, the committee strengthened the communication with the accountants for annual audit After the preliminary audit opinions were issued by the accountants for annual audit, the 1st meeting of the Audit and Consumer Rights Protection Committee of the sixth session of the Board was held on March 25, 2025, at which the committee reviewed the Bank’s financial statements and the audit report for 2024, listened to the external auditor’s report on the Bank’s annual audit work for 2024, and put forward advices Before holding the annual meeting of the Board, the 2nd meeting of the Audit and Consumer Rights Protection Committee of the sixth session of the Board was held on March 25, 2025, at which the committee considered and approved the Bank’s annual financial report for 2024, and agreed to submit it to the Board of the Bank for consideration CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 97 The Nomination and Remuneration Committee of the Board of Directors of the Bank shall nominate and review the qualifications and conditions for the appointment of Directors in accordance with the Articles of Association and the procedures and standards for the appointment of Directors and make recommendations to the Board of Directors on the nomination of such persons after identifying the suitably qualified person to serve as Director (3) Meetings and work During the Reporting Period, the Nomination and Remuneration Committee of the Board of Directors of the Bank held a total of six meetings, at which 19 proposals were deliberated The Nomination and Remuneration Committee of the Board of Directors deliberated the annual group performance evaluation indicators, performance assessment contract of the chairman of the Board, assessment and evaluation of the terms of office of professional managers, determination of the compensation and incentive income of senior management members during their terms of office, as well as the market-oriented recruitment work plan for professional managers as senior management members and other proposals It also selected Directors and professional managers with high standards, and carefully evaluated the independence of the candidates of independent non-executive Directors, which further enhanced the diversity of the Board of Directors and senior management members During the Reporting Period, the attendance of the members of the Nomination and Remuneration Committee of the Board of Directors of the Bank is as follows: Number of Number of Number of scheduled attendances attendances Number of Name attendances in person by proxy absences MAO Zhenhua 6 6 – – WANG Jinhong 6 6 – – HU Aimin 6 6 – – ZHU Ning 6 6 – – SHUM Siu Hung Patrick 6 6 – – CHI Guotai 2 2 – – Notes: (1) During the Reporting Period, the Nomination and Remuneration Committee of the Board of Directors of the Bank convened 6 off-site meetings (2) Please refer to “Directors, Supervisors, Members of Senior Management, Employees and Branches: Changes in Directors, Supervisors and Members of Senior Management” in this annual report for the changes in the Directors of the Bank during the Reporting Period 5 Development Strategy and Inclusive Finance Committee of the Board of Directors (1) Personnel composition As of the end of the Reporting Period, the Development Strategy and Inclusive Finance Committee of the Board of Directors of the Bank consisted of six members, being executive Directors Mr WANG Jinhong, Mr QU Hongzhi and Mr DU Gang; non-executive Directors Mr AU Siu Luen, Ms YUAN Wei and Mr DUAN Wenwu, respectively, and was chaired by Mr WANG Jinhong CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 99 (IX) Corporate Governance Functions The Board of Directors of the Bank is responsible for performing its corporate governance functions set out in Appendix C1 of the Listing Rules, including: developing and reviewing the corporate governance policies and practices; reviewing and monitoring the training and continuous professional development of directors and senior management members; reviewing and monitoring the Bank’s policies and practices on compliance with legal and regulatory requirements; developing, reviewing and monitoring codes of conduct and compliance manuals for employees and directors; and reviewing the Bank’s compliance with the Corporate Governance Code and the disclosure of corporate governance information in the annual report IV BOARD OF SUPERVISORS (I) Members of the Board of Supervisors As of the end of the Reporting Period, the Board of Supervisors of the Bank consisted of five Supervisors, including two external Supervisors: Mr HUI Yung Chris and Ms DU Huibin, and three employees’ representative Supervisors: Mr BAI Xinyu, Mr LI Chengbang and Ms ZHANG Hui (II) The Responsibility of the Board of Supervisors The Board of Supervisors is the Bank’s internal supervisory organization It is accountable to the Shareholders’ general meeting and targets on protecting the legal rights of the Bank, the Shareholders, employees, creditors and other stakeholders Its major functions and powers include supervising the Board of Directors to establish sound business philosophy, value standards and formulate development strategies in line with the Bank’s actual situation; regularly evaluating the scientificity, rationality and effectiveness of the development strategies formulated by the Board of Directors, and forming an evaluation report; inspecting and supervising the Bank’s financial activities, operating decisions, internal control and risk management and pushing forward relevant rectifications; supervising the election and appointment process of Directors; supervising the violation of laws and regulations or the Articles of Association of the Bank by the Directors and senior management members when performing their duties, and comprehensively evaluating the performance of the Directors, Supervisors and senior management members, etc (III) Work of External Supervisors As of the end of the Reporting Period, there are two external Supervisors in the Board of Supervisors of the Bank, the number of which is not less than one-third of the total number of members of the Board of Supervisors During the Reporting Period, the external Supervisors of the Bank strictly complied with the laws and regulations, regulatory requirements and the provisions of the Bank’s Articles of Association, earnestly performed their supervisory duties, and actively protected the legitimate rights and interests of the Bank, Shareholders and other stakeholders They attended all the meetings of the Board of Supervisors that they should attend, complying with regulatory requirements in terms of in-person attendance rate, and provided advice and suggestions to the Board of Directors and the senior management on strengthening capital management, comprehensive risk management, asset quality management, case prevention and control management, consumer rights protection, data governance, and rectification of issues identified in audits; presided over and convened meetings of the special committees under the Board of Supervisors, continued to monitor relevant matters within the scope of the special committees’ responsibilities, and promptly provided professional opinions to the Board of Supervisors; attended 3 Shareholders’ general meetings and all on-site meetings of the Board of Directors during the Reporting Period, took the initiative to attend on- site meetings of the special committees under the Board of Directors, conducted on-site supervision on the effective operation of the Board of Directors and its special committees and the speeches of Directors at the meetings, and carefully reviewed documents of off-site meetings During the adjournment period, they reviewed 78 information reports including the Bank’s monthly financial statements, minutes of the president’s office meetings and consumer rights protection risk alerts, and actively participated in the training and surveys in branches as organized by the Board of Supervisors of the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 101 (I) Composition and Basic Information of Senior Management As of the end of the Reporting Period, the senior management of the Bank consisted of three members, including: the president: Mr QU Hongzhi, the vice presidents: Mr DU Gang (secretary to the Board of Directors) and Mr XIE Kai During the Reporting Period, among these three members of the senior management, 1 person received less than RMB2 million and 2 persons received more than RMB2 million for the total amount of pre-tax remuneration from the Bank For detailed information about the remuneration and other basic information of members of the senior management, please refer to “Directors, Supervisors, Members of Senior Management, Employees and Branches: Directors, Supervisors and Members of Senior Management” of this annual report During the Reporting Period, under the leadership of the Party Committee of the head office and the Board of Directors and in adherence to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the senior management of the Bank fully studied and implemented the guiding principles from the 20th CPC National Congress and the second and third plenary sessions of the 20th CPC Central Committee, as well as the important statements from General Secretary Xi Jinping on finance works and the important speech made during his visit to Tianjin They diligently implemented the work plan of financial regulatory departments of central government and Tianjin Committee of the CPC and Tianjin Municipal People’s Government, and insisted on the general principle of pursuing progress while ensuring stability Taking the “five priorities” as starting point and adhering to the basic principles of serving the real economy with financial services, the senior management of the Bank also facilitated the deepening of reforms, transformation and revitalization, and continued to promote high-quality development across the Bank During the Reporting Period, the senior management of the Bank, in accordance with relevant laws, regulations, the Articles of Association and the Work Rules for Senior Management (《高級管理層工作規則》) of the Bank, conscientiously performed their duties, and worked hard to improve the level of operation and management A total of 6 bank-wide comprehensive meetings, 53 office meetings of the president, 50 special meetings of the president, 11 meetings of the Assets and Liabilities Management Committee, 16 meetings of the Risk Control Committee, 101 meetings of the Finance Review and Approval Committee, 24 meetings of the Information Technology Committee, 11 meetings of the Data Management and Data Security Committee, 18 meetings of the Consumer Rights Protection Working Committee, 81 meetings of the Financial Markets Business Joint Decision Making Committee, 6 meetings of the Channel Establishment Management Committee, 11 meetings of the Retail Business Committee and 12 meetings of the Corporate Business Committee were held during the whole year At various meetings, the senior management members actively expressed their professional opinions, fully communicated on information, and conscientiously solved problems, ensuring the efficient and orderly development of operation and management CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 103 XII INFORMATION DISCLOSURE The Bank attaches great importance to information disclosure, strictly complies with the information disclosure regulations and the requirements of the Listing Rules, adheres to the principles of truthfulness, accuracy, completeness, timeliness and fairness, fulfills the obligation of information disclosure, and protects investors’ right to know During the Reporting Period, guided by investor needs and in compliance with industry regulatory requirements and the regulatory rules of the securities listing locations, the Bank continued to enhance the initiative and pertinence of information disclosure with a focus on the concerns of investors, so as to provide supporting information for investors to gain a comprehensive and in-depth understanding of the operation and development of the Bank In 2024, the Bank completed the preparation and disclosure of Annual Report 2023 and Interim Report 2024 on time, continued to optimize the structure and content of the social responsibility report, and make timely disclosure of temporary announcements in accordance with regulatory requirements More than 70 information disclosure documents of various types were published on the websites of the HKEX and the Bank The Bank carried out inside information management in strict accordance with the regulatory requirements of the place where the securities were listed Through establishing and optimizing the internal information reporting mechanism, the Bank defined the information reporting route, and ensured the timely, compliant and effective transmission of material information among corporate governance entities In case of “inside information” as referred to in the SFO, the Bank can deal with and release inside information in a timely manner in accordance with the Guidelines on Disclosure of Inside Information issued by the Securities and Futures Commission of Hong Kong and other relevant regulatory requirements, and strictly keep confidential relevant information before disclosure During the Reporting Period, the Bank strengthened compliance publicity and education and enhanced the compliance awareness of insiders by organizing staff to study the regulatory requirements, duly releasing the confidentiality notice and the notice on prohibiting securities trading, effectively preventing insider dealing risk XIII AMENDMENTS TO THE ARTICLES OF ASSOCIATION During the Reporting Period, the Bank did not amend its Articles of Association XIV COMPLIANCE WITH CORPORATE GOVERNANCE CODE The Bank has adopted the code provisions set out in Part 2 of Appendix C1 to the Listing Rules Pursuant to code provision B22, every director (including those appointed for a specific term) should be subject to retirement by rotation at least once every three years The term of the fifth session of the Board of Directors of the Bank expired on December 15, 2022 When preparing for the re-election of the Board of Directors, the re-election of the Board of Directors was postponed in order to maintain the continuity of the relevant work of the Bank On December 20, 2024, the Board of Directors of the Bank considered and approved the proposal for the candidates of the sixth session of the Board of Directors, and published an announcement on the proposed election of directors for the sixth session of the Board of Directors on the same day On January 20, 2025, the sixth session of the Board of Directors has been elected at the 2025 first extraordinary general meeting of the Bank, and thus the re-election of the Board of Directors has been completed For details, please refer to the relevant announcements and circular published by the Bank on the websites of the HKEX and the Bank As of the date of this annual report, the Bank has complied with code provision B22 Save and except for disclosed above, the Bank has complied with the code provisions set out in Part 2 of Appendix C1 to the Listing Rules during the Reporting Period The Bank has also complied with certain recommended best practices set out in the Code CHINA BOHAI BANK CO, LTD Annual Report 2024 Corporate Governance 105 The Bank has established a “four-in-one” internal control organization system consisting of process execution, functional management, second-line supervision and internal audit The Bank adheres to the principle of “comprehensive, whole-process, and whole-workforce” in internal control management, compliance support, operational risk prevention, case prevention and control, anti-money laundering management, business continuity management, auditing and inspection and other aspects, to promote compliant and orderly management and steady development of all operations During the Reporting Period, the Bank continued to improve the long-term mechanism of internal control and compliance management, optimized the internal control and compliance management structure, and strengthened segment management; focusing on the key tasks for the year, it provided guidance to enhance management capability and professionalism of the internal control and compliance teams of its branches; it strengthened assessment and incentives to improve the accuracy and effectiveness of internal control and compliance management assessment; it strengthened case prevention management, established a grid-based employee management structure, and improved employee management efficiency; it carried out various forms of internal control compliance training to continuously improve employees’ compliance awareness and cultivate a compliance culture; it improved the inspection mechanisms, strengthened inspection management, and coordinated on-site inspections across the Bank to realize the organic linkage of on-site inspection planning, execution and supervision; it strengthened rectification and supervision, reinforced accountability, and targeted on violations; it established an enterprise-level on-site inspection system and promoted its use throughout the Bank, continued to optimize the internal control compliance model, and continuously improved the intelligent level of internal control compliance management The Bank has established an independent and vertical internal audit system, which independently performs audit functions as a working body under the Audit and Consumer Rights Protection Committee of the Board of Directors and the Board of Supervisors The organizational structure of the audit department of the head office and the regional audit centers has been established As the second-level department of the audit department of the head office and the regional audit agencies, the audit centers are accountable to and report to the audit department of the head office The internal audit of the Bank adopts risk-oriented audit strategies and audit methods On the basis of risk assessment, the Bank arranges audit plans and audit frequency according to regulatory requirements, risk degree and importance principles, and actively performs the supervision role of audit on key businesses and major risk areas within the scope of duties During the Reporting Period, in respect of internal audit matters, the Bank continued to improve various internal audit policies and procedures, constantly enhanced internal audit capability and technological level, and adopted risk-oriented audit strategies and methods The Bank carried out various audit works, performed audit supervision duties, and promoted the continuous improvement of the Bank’s internal control and risk management During the Reporting Period, the Board of Directors of the Bank conducted an annual review on the Bank’s risk management and internal control system for 2024, and no material defects have been found while individual implementation at the grassroots level needs to be strengthened The Board of Directors considered that the Bank’s risk management and internal control system was effective and adequate XVII INTERNAL AUDIT During the Reporting Period, the Bank adhered to and continuously emphasized a risk-oriented audit principle, actively expanded the breadth and depth of audit supervision, increased audit efforts on high-risk businesses and institutions, focused on the asset quality and the whole process of operation and management of credit extension, and concentrated on the key tasks and business areas in operation and management Focusing on the Bank’s central tasks, it conducted various audit projects, including special audits, regular and subsequent branch audits in accordance with the plan for internal audit work approved by the Audit and Consumer Rights Protection Committee under the Board of Directors, the work arrangements of the Board of Supervisors and regulatory requirements, and completed post-office audits in a timely manner according to the Bank’s actual situation, revealed the control deficiencies in various risk management of the Bank, including credit risk, compliance risk, market risk, operational risk and information technology risk, continuously promoted the rectification of the problems identified in the audits, fully performed the audit duties, and constantly promoted the continuous improvement in the internal control and risk management system of the whole bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Directors 107 Report of the Board of Directors I PRINCIPAL BUSINESS The Bank is mainly engaged in banking and related financial services Please refer to the section headed “Management Discussion and Analysis: Scope of Businesses” in this annual report for the Bank’s main business scope II BUSINESS REVIEW Please refer to the section headed “Management Discussion and Analysis” in this annual report for the financial performance, major risks, uncertainties and business outlook of the Bank during the Reporting Period; please refer to “Important Events” in this annual report for details of important events after the Reporting Period; please refer to “Compliance with Laws and Regulations” in this chapter for compliance with laws and regulations; please refer to “Performance of Social Responsibilities” in this chapter for environmental policies and performance, and relations with employees, customers, suppliers and other stakeholders III IMPLEMENTATION OF THE RESOLUTIONS OF SHAREHOLDERS’ GENERAL MEETING BY THE BOARD OF DIRECTORS During the Reporting Period, the Board of Directors of the Bank fully implemented the resolutions of the Shareholders’ general meeting, and earnestly implemented the Profit Distribution Plan for 2023, the Financial Budget Report for 2024, the Investment Plan for 2024, re-appointment of external auditors for 2024 and other resolutions reviewed and approved by the Shareholders’ general meeting IV PROFIT DISTRIBUTION (I) Profit Distribution Policy The Bank’s Dividend Policy is as follows: Profit after income tax paid by the Bank was distributed in the following order: • Making up for losses of previous years; • Setting aside 10% for statutory reserve fund; • Setting aside for general (risk) reserve; • Setting aside for discretionary reserve fund; • Paying dividends to Shareholders No profit shall be distributed to the Bank’s shares held by the Bank The Bank may distribute dividends in cash or by shares After the Shareholders’ general meeting of the Bank made a resolution on the profit distribution plan, the Board of Directors of the Bank shall complete the distribution of dividends (or shares) within two months upon the Shareholders’ general meeting Any shares paid before the call is entitled to interest, but the holders of the shares have no right to participate in the dividends subsequently declared for the prepaid shares Subject to the provisions of laws and regulations, the Bank may exercise the power of forfeiture with respect to unclaimed dividends, provided that such power may only be exercised after the expiration of the corresponding limitation period applicable to the declaration of dividends CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Directors 109 (III) Tax on Dividends Pursuant to the applicable provisions and the Implementing Regulations of the Enterprise Income Tax Law of the People’s Republic of China (《中華人民共和國企業所得稅法》), the Bank shall withhold and pay enterprise income tax at the rate of 10% for non-resident enterprise holders of H Shares (including H Shares registered in the name of HKSCC Nominees Limited) Pursuant to the Notice on Issues Concerning Taxation and Administration of Individual Income Tax After the Repeal of the Guo Shui Fa [1993] No 045 Document (Guo Shui Han [2011] No 348), the Bank shall withhold and pay individual income tax for Individual holders of H Shares For individual holders of H Shares who are Hong Kong or Macao residents and those whose country of domicile is a country or region which has entered into a tax treaty with the PRC stipulating a tax rate of 10%, the Bank shall withhold and pay individual income tax at the rate of 10% for those shareholders For individual holders of H Shares whose country of domicile is the country or region which has entered into a tax treaty with the PRC stipulating a tax rate of less than 10%, the Bank shall withhold and pay individual income tax at the rate of 10% for individual holders of H Shares If those shareholders require a refund of the excessive amount of individual income tax payable under the tax treaty, the Bank will handle applications on their behalf for preferential treatments pursuant to the relevant tax treaties However, in accordance with the Administrative Measures on Non-resident Taxpayers Claiming Tax Treaty Benefits (No 35 Announcement of the State Taxation Administration in 2019) (《非居民納稅人享受協定待遇管理辦法》) and the requirements of relevant tax treaties, shareholders shall promptly provide relevant papers and data Upon the review and approval of the applicable tax authorities, the Bank will assist in refunding the excessive amount of tax withheld For the individual holders of H Shares whose country of domicile is a country or region which has entered into a tax treaty with the PRC stipulating a rate of more than 10% but less than 20%, the Bank shall withhold and pay individual income tax at the applicable tax rate stipulated in the relevant tax treaty for those shareholders For the individual holders of H Shares whose country of domicile is a country or region which has entered into a tax treaty with the PRC stipulating a tax rate of 20%, or a country or region which has not entered into any tax treaties with the PRC, or under any other circumstances, the Bank shall withhold and pay individual income tax at the rate of 20% for those shareholders Pursuant to the relevant requirements under the Notice on the Relevant Taxation Policy regarding the Pilot Programme that Links the Stock Markets in Shanghai and Hong Kong (Cai Shui [2014] No 81) (《關於滬港股票市場交易互聯互通機制試點有關稅收政策的通知》(財稅[2014]81號)) and the Notice on the Relevant Taxation Policy regarding the Pilot Programme that Links the Stock Markets in Shenzhen and Hong Kong (Cai Shui [2016] No127) (《關於深港股票市場交易互聯互通機制試點有關稅收政策的通知》(財稅[2016]127號)), for dividends received by mainland individual investors from investing in H Shares listed on the Hong Kong Stock Exchange through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, the Bank shall withhold individual income tax at the rate of 20% on behalf of the investors Individual investors who have paid withholding tax overseas may apply to the competent tax authority of China Securities Depository and Clearing Corporation Limited for tax credit with valid tax payment certificates For dividends received by mainland securities investment funds from investing in shares listed on the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, the tax payable shall be the same as that for the individual investors Dividends received by mainland corporate investors from investing in shares listed on the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect are included in their total income and subject to corporate income tax according to law The Bank will not withhold and pay the income tax of dividends for mainland corporate investors and those mainland corporate investors shall report and pay the relevant tax themselves CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Directors 111 XIII COMPLIANCE WITH LAWS AND REGULATIONS The Bank continued to monitor and track the introduction of and changes in regulatory laws and regulations, promptly circulate and disseminate regulatory policies through legal updates and summaries, and keep up with the implementation of regulations, so as to transform external regulation into internal rules The Bank continued to review, formulate, evaluate and eliminate its rules and regulations, thereby constantly promoting the “establishment, amendment and abolition” of its policies The Bank also strengthened compliance reviews with system audits as the main body to proactively identify and manage the compliance risks of new products, new businesses and major projects, in order to strictly control compliance risks at the preliminary stage and firmly uphold the bottom line of compliance XIV LEGAL CONSTRUCTION EFFORTS Fully leveraging its core leadership role, the Party Committee at the head office reinforced its responsibilities as the primary person in charge of legal construction Guided by Xi Jinping Thought on the Rule of Law, the Bank duly implemented the requirements of the Party Central Committee, the CPC Tianjin Municipal Committee and the Tianjin Municipal People’s Government on promoting legal construction and deployment Firmly upholding the reform and development direction towards the rule of law, we promoted the organic integration of legal construction and business management, and continued to strengthen the leadership accountability system, work organization system, compliance management system, legal risk prevention mechanism, and the construction of a legal-based culture We continued to strengthen the organizational leadership of legal work while incorporating the legal construction tasks for the year into the overall work plan and annual work plan We also adjusted the composition of the leading group for legal construction and “Eighth Five-Year” Rule of Law Publicity and Education Work at head office, so as to ensure the implementation of legal work To strengthen the construction of its compliance system, the Bank has formulated institutional system documents and system compilations with 13 major types of business regulations, 6 major types of management regulations, as well as institutional and personnel regulations as the basic framework, and thus established an institutional system with comprehensive coverage, complete structure and clear hierarchy A grid-based management mechanism for all staff across the Bank has been established to deepen and enhance employee behavior management while integrating case prevention, anti-money laundering management, and operational risk management, which improved the quality and efficiency of compliance management We continued to consolidate the “three legal audits” to ensure 100% coverage of legal audits for rules and regulations, economic contracts and major decisions, while striving to enhance the quality of these audits Based on the key function of legal compliance services in providing support, we enhanced our legal risk prevention mechanism, strengthened the management of legal dispute cases, regulated the management of external legal counsel, and improved the efficiency of recovering and mitigating assets at risk, in order to effectively leverage the role of the rule of law in strengthening management, promoting operations, preventing and controlling risks, and creating value Closely aligned with business development, we conducted regular investigations on hidden hazards and gave risk alerts with defined responsibilities We learned from individual cases to prevent future issues, and thus established a long-term mechanism for source governance with solid progress Taking the “Eighth Five-Year” legal education initiative as a key driver, closely following changes in legislation and regulatory policies, we organized comprehensive, categorized, and targeted legal culture education activities that cover all employees, aiming to enhance the legal literacy of the entire workforce and firmly fostered the spirit of the rule of law Our work plan related to the rule of law are as follows: We will adhere to the principle of governing the enterprise in accordance with laws and regulations as a practical action to implement Xi Jinping Thought on the Rule of Law and the decisions and deployments made by the CPC Tianjin Municipal Committee and the Tianjin Municipal People’s Government By highlighting key priorities, and accelerating the efforts to address shortcomings and strengthen the areas of deficiency, we will continuously enhance the guiding and safeguarding capabilities, risk management and control capabilities, and proactive rights protection capabilities of legal construction This will gradually form a legal and compliance risk management system with clearer division of responsibilities, more refined operational mechanisms, and more pronounced management efficiency, thereby further enhancing our ability to govern the enterprise in accordance with laws and regulations CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Directors 113 Buttressed the bottom line of personal information protection The Bank continuously refined the requirements for protecting the personal financial information of customers, and summarized and updated the Summary of Key Points for Personal Information Protection in Banking Financial Institutions It conducted comprehensive inspections across the Bank to identify potential risks in protecting the personal information of consumers, and facilitated the safety management, operation and execution of personal information throughout its entire lifecycle comprising collection, transmission, processing, storage, usage, provision, disclosure and deletion Developed a distinctive culture brand of consumer rights protection The Bank hosted an IP solicitation and selection event for its consumer rights protection brand while adopting the slogan “Financial Services Uphold Our Original Aspiration, Consumer Rights Protection Demonstrates Our Responsibility” as the motto for its consumer rights protection culture Aiming to meet the people’s needs for a better life, the Bank fully integrated the cultural concept of consumer rights protection into its management practices, system development, business processes, ideological education, job training, inspection and supervision, and brand communication The Bank conducted over 700 consumer rights protection training sessions, cumulatively training more than 120,000 participants, which effectively enhanced its employees’ awareness and capabilities in consumer rights protection Energized financial education and awareness initiatives The Bank greatly promoted the construction of a comprehensive matrix for financial education and publicity, combining online and offline methods with both centralized and localized approaches Focusing on the financial needs of key groups such as the elderly, the young, and new migrants, the Bank enhanced the relevance, inclusivity and effectiveness of financial education During the Reporting Period, the Bank conducted over 14,365 online and offline educational and publicity activities, reaching more than 3525 million financial consumers It achieved 155 instances of coverage through central and national mainstream media and was honored with the title of “National Financial System Demonstration Site Learning from Lei Feng (全國金融系統學雷鋒活動示範點)” Consolidated the outcomes of tracing and managing consumer complaints The Bank proactively responded to public concerns, continuously optimized complaint handling processes, ensured accessible complaint channels, and promoted the establishment of a diversified financial dispute resolution mechanism It consistently improved product development, marketing management and operational procedures, seeking solutions throughout the entire lifecycle of products and services to enhance the quality and efficiency of complaint handling During the Reporting Period, the Bank handled a total of 22,593 consumer complaints, including 21,743 complaints from individuals and 850 complaints from corporate customers, with a complaint settlement rate of 100% The complaints from individual consumers received by the Bank were primarily concentrated in personal loans and credit card services, accounting for 4106% and 3025% respectively, totaling 7131% Geographically, these complaints were mainly distributed across five provinces and cities: Tianjin*, Guangdong, Beijing, Henan and Jiangsu, accounting for 6818%, 556%, 289%, 263% and 243% respectively, totaling 8169% (III) Development of Green Financial Business During the Reporting Period, in accordance with the decision and deployment of the CPC Central Committee and the State Council, the Bank actively implemented the national concepts of green and high-quality development, advanced the construction of a Beautiful China, and comprehensively served the strategic goals of carbon peaking and carbon neutrality Anchoring low-carbon economy, circular economy and ecological economy, the Bank focused on increasing the effective supply of green finance, and effectively prevented environmental, social and governance risks The Bank also continuously improved its environmental, social and governance performance, actively fulfilled its social responsibilities, leveraged its dynamic role in serving the real economy, and achieved new breakthroughs in economic and environmental benefits As of the end of the Reporting Period, the Bank’s green loan balance was RMB48,530 million, representing an increase of RMB17,270 million or 5525% as compared to the end of the previous year * Including complaints related to consumption involving the head office CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Supervisors 115 Report of the Board of Supervisors I MAIN WORK OF THE BOARD OF SUPERVISORS (I) Strengthening the Supervision over Performance of Duties, and Continuously Urging the Board of Directors, Senior Management and Their Members to Perform Their Duties with Due Diligence Firstly, the Board of Supervisors strengthened its follow-up supervision efforts Focused on urging the Board of Directors and the senior management to implement rectification measures, the Board of Supervisors sorted out and formed the “List of Items to be Implemented and Supervised for the Board of Directors and Senior Management Proposed by the Board of Supervisors of China Bohai Bank for 2023” (《2023年度渤海銀行監事會建議董事會、高級管理層落實事項督辦清單》), which set time nodes for implementing rectification measures and ensure proper supervision Secondly, the Board of Supervisors strengthened daily performance supervision The Board of Supervisors assigned members to attend the general meetings and the meetings of the Board of Directors and its special committees in person in 2024, and to supervise the effective operation of the Board of Directors and its special committees and Directors’ performance of duties, and reviewed a total of 239 various proposals and reported issues before the meetings; continued to pay attention to the operation and development of the Bank, assigned employees’ representative Supervisors to attend the president’s office meetings, 2024 work conference, interim work conference and other meetings, and reviewed a total of 78 information reports, president’s office meeting minutes and other materials during the adjournment period Thirdly, the Board of Supervisors improved the annual performance evaluation The Board of Supervisors organized and carried out evaluation of the performance of the Board of Directors, the senior management and their members in 2023 Focusing on the evaluation of the performance of the Board of Directors and the senior management in terms of capital management, risk management, employee conduct management, data governance and other aspects, the Board of Supervisors reported to general meetings and regulatory authorities on time, and informed the Board of Directors and the senior management of the performance evaluation results and related opinions and suggestions Fourthly, the Board of Supervisors conducted supervision over post-office audits In 2024, according to the resolution of the Board of Directors, the Board of Supervisors conducted post-office audits of two former senior management members, and arranged audits to evaluate their performance during their terms of office It also reviewed the post-office audit reports of two former Directors (II) Strengthening the Supervision over Financial Matters, and Paying High Attention to Major Financial Decisions of the Bank and Their Implementation Firstly, the Board of Supervisors considered relevant matters in a timely manner The Board of Supervisors reviewed the Bank’s profit distribution proposal for 2023, the 2023 annual report and the 2024 interim report, and offered opinions on the compliance and rationality of the profit distribution proposal, as well as the authenticity, accuracy and completeness of the contents of the regular reports Secondly, the Board of Supervisors supervised the decision-making of financial matters The Board of Supervisors assigned members to attend relevant meetings of the Board of Directors and the senior management in 2024, and conducted on-site supervision over the annual financial budget and final accounts, comprehensive business operation plans and other plans of the Bank Thirdly, the Board of Supervisors reviewed the information about financial position The Board of Supervisors regularly reviewed key operating information such as monthly reports on assets and liabilities, deposits and loans, profits and income and expenses submitted by the senior management, and paid attention to changes in the important financial indicators, major operating indicators and major provisions of the Bank Fourthly, the Board of Supervisors supervised external audit management The Board of Supervisors convened a meeting of the Board of Supervisors and debriefed the Work Report on Re-appointment of the Accounting Firm for 2024 at the meeting, assigned members to attend the meetings of the Audit and Consumer Rights Protection Committee of the Board of Directors, and supervised the performance of Directors in communicating with external auditors regarding the 2023 audit work, 2024 audit plan and pre-audit work CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Supervisors 117 II MEETINGS OF THE BOARD OF SUPERVISORS AND ITS SPECIAL COMMITTEES (I) Meetings of the Board of Supervisors During the Reporting Period, the Board of Supervisors of the Bank convened a total of 5 meetings at which 16 resolutions were considered and approved and 41 reports were debriefed and reviewed Details are as follows: 1 The 21st meeting of the fifth session of the Board of Supervisors (Annual Meeting 2023) The meeting was held in Tianjin on March 28, 2024 The meeting was held legally and effectively with 5 Supervisors actually attended 8 resolutions were considered and approved at the meeting and the matters considered included: the Work Report of the Board of Supervisors for 2023, the Independent Opinions of the Board of Supervisors on the Relevant Matters for 2023, the Board of Supervisors’ 2023 Report on Self-Evaluation and Assessment of the Performance of Duties of Supervisors, the Board of Supervisors’ 2023 Assessment Report on the Performance of Duties of the Board of Directors, Senior Management and Their Members, the Profit Distribution Proposal for 2023, the Internal Control Evaluation Report for 2023, the Annual Report 2023, and Work Plan of the Board of Supervisors for 2024 The meeting reviewed 15 reports including the Report on Implementation of New Capital Regulations for 2023, the Report on Collection and Disposal of Non-Performing Assets for 2023, the Report on Comprehensive Risk Management for 2023, the Internal Control Compliance Report for 2023, the Audit Department’s Internal Audit Work Report for 2023, the Conclusion on Consumer Right Protection for 2023 and the Work Plan for 2024, the Conclusion on Case Prevention and Control Work for 2023, the Evaluation Report on Employee Behavior for 2023, the Work Report on Anti-Money Laundering and Counter-Terrorism Financing for 2023, the Report on Handling Consumer Complaints for 2023, the Report on Consumer Complaints for the First Three Quarters of 2023 and the Report on Consumer Complaints for the First Half of 2023, the Self-Evaluation Report on Data Governance for 2023, the Audit Report on Management of Related Party Transactions for 2023, the Audit Report on Management of Wealth Management Business, and the Report on the Follow-up Audit of Consumer Rights Protection Efforts 2 The 22nd meeting of the fifth session of the Board of Supervisors The meeting was held in Tianjin on May 28, 2024 The meeting was held legally and effectively with 5 Supervisors actually attended 3 resolutions were considered and approved at the meeting and the matters considered included: the Proposal on the Resignation of DIAO Qinyi From His Positions Including External Supervisor of CHINA BOHAI BANK CO, LTD, the Proposal on the Resignation of QI Ershi From His Positions Including External Supervisor of CHINA BOHAI BANK CO, LTD, and the Proposal on the Nomination of DU Huibin as External Supervisor of CHINA BOHAI BANK CO, LTD The meeting reviewed 8 reports including the Report on Liability Quality Management for 2023, the Report on the Evaluation of Strategy Execution for 2023, the Audit Report on Bank Acceptance Bill Business, the Audit Report on Capital Management, the Post-Office Audit Report of the Director and Vice Chairman FUNG Joi Lun Alan, the Post-Office Audit Report of the Director YE Baishou, the Consumer Complaints Report for 2023, and the Report on Further Comprehensive Implementation of 2022 Regulatory Reporting of China Bohai Bank 3 The 23rd meeting of the fifth session of the Board of Supervisors The meeting was held in Tianjin on August 28, 2024 The meeting was held legally and effectively with 4 Supervisors actually attended 2 resolutions were considered and approved at the meeting and the matters considered included: the 2024 Interim Report, and the Proposal on the Risk Prevention and Control Management Measures for Criminal Cases CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Supervisors 119 (II) Meetings of Each Special Committee of the Board of Supervisors 1 Nomination Committee of the Board of Supervisors (1) Personnel composition As of the end of the Reporting Period, the Nomination Committee of the Board of Supervisors of the Bank consisted of three members, being external Supervisor Ms DU Huibin, and employees’ representative Supervisors Mr BAI Xinyu and Mr LI Chengbang, respectively (2) Primary duties The Nomination Committee of the Board of Supervisors shall be responsible for formulating standards and procedures for selecting and appointing supervisors, and preliminarily examining the qualifications and conditions of supervisor candidates, and making recommendations to our Board of Supervisors; supervising scientificity and reasonability of remuneration management system and policies of the Bank and remuneration plan of senior management personnel; supervising the election and appointment process of Directors; evaluating the performance of Directors, Supervisors and the senior management comprehensively; performing post-office audits on Directors and the senior management; and dealing with other matters authorized or designated by the Board of Supervisors (3) Meetings and work During the Reporting Period, the Nomination Committee of the Board of Supervisors of the Bank held 2 meetings on March 28, 2024 and May 28, 2024, respectively, and considered and approved 3 resolutions, including: the Board of Supervisors’ 2023 Report on Self-Evaluation and Assessment of the Performance of Duties of Supervisors, the Board of Supervisors’ 2023 Assessment Report on the Performance of Duties of the Board of Directors, Senior Management and Their Members, and the Proposal for the New External Supervisor of the Fifth Session of the Board of Supervisors The attendance of members of the Nomination Committee of the Board of Supervisors of the Bank during the Reporting Period was as follows: Number of Number of Number of scheduled attendances attendances Number of Name attendances in person by proxy absences QI Ershi 2 2 – – WANG Chunfeng 2 2 – – MA Shuming 2 2 – – CHINA BOHAI BANK CO, LTD Annual Report 2024 Report of the Board of Supervisors 121 III THE INDEPENDENT OPINION OF THE BOARD OF SUPERVISORS ON RELEVANT MATTERS (I) The Bank’s Legal Operations During the Reporting Period, the Bank conducted operation activities in accordance with the laws and its decision-making procedures were legal and valid No violations of laws and regulations, the Articles of Association or other behaviors that harmed the interests of the Bank and its Shareholders were found among Directors or the members of the senior management of the Bank during their performance of duty (II) The Truth in the Financial Reports Deloitte Touche Tohmatsu and Deloitte Touche Tohmatsu Certified Public Accountants LLP have audited the 2024 financial reports of the Bank prepared in accordance with the requirements set out in the IFRS and the China Accounting Standards for Business Enterprises respectively, and standard unqualified audit reports have been issued The Board of Supervisors has no objection to the truthfulness of such financial reports (III) Use of Proceeds Raised During the Reporting Period, the use of proceeds raised of the Bank was consistent with promised use (IV) Purchase and Sale of Assets During the Reporting Period, based on market-oriented approach, the Bank completed two asset transfers to Tianjin JR Assets Management Co, Ltd (天津津融資產管理有限公司), and fulfilled its information disclosure obligations in accordance with relevant laws and regulations, regulatory requirements and relevant requirements of the stock exchange where the Bank’s shares are listed Apart from that, the Bank had no other material disposal or acquisition of assets during the Reporting Period (V) Related Party Transactions The Board of Supervisors has approved the Audit Report on the Related Party Transactions Management for 2024 (VI) Internal Control The Board of Supervisors has considered and approved the internal control evaluation report for 2024 of the Bank (VII) Implementation on Resolutions of the General Meeting The Board of Supervisors has held no objection to all reports and proposals submitted to the Shareholders’ general meeting for consideration by the Board during the Reporting Period, and supervised the implementation on resolutions of the general meeting The Board of Supervisors believes that the Board of Directors has earnestly implemented such resolutions of the general meeting CHINA BOHAI BANK CO, LTD Annual Report 2024 Important Events 123 VI MATERIAL RELATED PARTY TRANSACTIONS AND CONNECTED TRANSACTIONS During the Reporting Period, all related party transactions of the Bank were conducted in accordance with relevant laws and regulations as well as relevant provisions of domestic and overseas regulatory authorities and the Bank’s rules for related party transactions These transactions were conducted in adherence to the general business principles, and based on conditions which were not superior to those granted to an independent third party, and their terms were fair and reasonable and in the interests of the Bank and its Shareholders as a whole The related party transactions of the Bank were mainly the credit-granting related party transactions with the members of the Shareholders’ group Please refer to the “Audit Report and Financial Report: Notes to the Consolidated Financial Statements: ‘Related party transactions’” of this annual report for specific data (I) Related Party Transactions Relating to Daily Operation According to the Administrative Measures for Related Party Transactions of Banking and Insurance Institutions, the material related party transactions of the Bank were all credit-granting related party transactions, and were conducted in accordance with relevant laws and regulations, external regulatory requirements and the Bank’s review procedures During the Reporting Period, the Board of Directors of the Bank approved six resolutions on material related party transactions, including the related party transactions on credit business of Hwabao WP Fund Management Co, Ltd (華寶基金管理有限公司) considered and approved at the 58th meeting of the fifth session of the Board of Directors, the related party transactions on credit business of Tianjin Bohai State-owned Assets Administration Co, Ltd considered and approved at the 62nd meeting of the fifth session of the Board of Directors, the related party transactions on credit business of China National Investment and Guaranty Corporation (中國投融資擔保股份有限公司) and the related party transactions on credit business of Tianjin TEDA Industrial Group Co, Ltd (天津泰達實業集團有限公司) considered and approved at the 64th meeting of the fifth session of the Board of Directors, and the related party transactions on credit business of TEDA Investment Holding Co, Ltd (two transactions) and the related party transactions on credit business of Tianjin TEDA Industrial Group Co, Ltd (天津泰達實業集團有限公司) considered and approved at the 65th meeting of the fifth session of the Board of Directors As of the end of the Reporting Period, the Bank’s net credit amount granted to all related parties were RMB19757 billion according to the standards of the National Financial Regulatory Administration Specifically, the net credit amount granted to TEDA Investment Holding Co, Ltd and its related parties was RMB13981 billion, that granted to China Shipping Investment Co, Ltd and its related parties was RMB476 million, that granted to State Development & Investment Corp, Ltd and its related parties was RMB410 million, that granted to China Baowu Steel Group Corporation Limited and its related parties amounted to RMB2,043 million, and that granted to Oceanwide Industry Co, Ltd and its related parties was RMB2,531 million, and that granted to other related parties reached RMB316 million As of the end of the Reporting Period, according to the standards of Hong Kong Stock Exchange, the Bank’s net credit amount granted to all connected persons amounted to RMB14458 billion Specifically, the Bank extended RMB13981 billion of net credits to TEDA Investment Holding Co, Ltd and its connected persons, RMB476 million to China Shipping Investment Co, Ltd and its connected persons, and RMB07 million to other connected persons The abovementioned transactions are transactions conducted by the Bank with its connected persons in the ordinary course of business on general commercial terms or better terms for the Bank, which are fully exempted in accordance with Chapter 14A of the Listing Rules Non-credit related party transactions between the Bank and related parties, such as deposits, service, leasing, agency sales and custody, and other daily related party transactions, are subject to general commercial terms and conditions no superior to those granted to independent third parties The above-mentioned transactions are connected transactions meeting the full exemption or the minimum exemption level under Chapter 14A of the Listing Rules CHINA BOHAI BANK CO, LTD Annual Report 2024 Important Events 125 XI INTEGRITY OF THE BANK During the Reporting Period, the Bank has not experienced circumstances in which it fails to fulfill the obligations determined by legal documents in effective judgment of the court, and is not liable for a relatively large amount of debts that are overdue XII OTHER MATERIAL EVENTS (I) Obtaining Business Qualification On July 12, 2024, the Bank formally obtained the special membership status of the Shanghai Gold Exchange (II) Issuance of Bonds The Bank issued 10-year fixed rate tier 2 capital bonds with a face value of RMB14 billion on April 18, 2024, with a right allowing issuer to redeem subject to conditions precedent at the end of the 5th year and a coupon rate of 277% per annum The proceeds from the issue of the bonds after deducting expenses for the issuance will be entirely used to replenish the Bank’s tier 2 capital The Bank issued three-year green financial bonds with a face value of RMB5 billion on June 24, 2024, with a fixed coupon rate of 205% per annum The proceeds from the issue of the bonds will be, according to applicable laws and regulatory approvals, used for green industrial projects specified in the Green Bond Endorsed Projects Catalogue (2021 Edition) The Bank issued undated capital bonds with a face value of RMB11 billion on September 13, 2024 The coupon rate is 238% during the first five years, with a coupon rate adjustment period every five years The issuer shall have a conditional redemption right on every interest payment date from the fifth year onwards The proceeds from the issue of the bonds after deducting expenses for the issuance will be entirely used to replenish the Bank’s additional tier 1 capital (III) Rating During the Reporting Period, the Bank actively carried out follow-up rating work of international ratings, and delivered positive information of the Bank to rating companies objectively and accurately As of the end of the Reporting Period, Moody’s rated the Bank as Baa3, and Standard & Poor’s rated the Bank as BBB-, maintaining the “investment grade” rating The rating results objectively and comprehensively reflected the operating conditions, market image and industry status of the Bank XIII SUBSEQUENT EVENTS On February 26, 2025, the Bank issued three-year green financial bonds with a face value of RMB5 billion, with a fixed coupon rate of 189% per annum The proceeds from the issue of the bonds will be, according to applicable laws and regulatory approvals, used for green industrial projects specified in the Green Bond Endorsed Projects Catalogue (2021 Edition) XIV REVIEW OF ANNUAL RESULTS The Bank’s external auditors Deloitte Touche Tohmatsu Certified Public Accountants LLP and Deloitte Touche Tohmatsu have audited the financial reports prepared by the Group in accordance with the requirements set out in the China Accounting Standards for Business Enterprises and the IFRS, and standard unqualified audit reports have been issued The Audit and Consumer Rights Protection Committee under the Board of the Bank has reviewed and approved the Group’s results and financial reports for the year ended December 31, 2024 XV PUBLICATION OF THE ANNUAL REPORT The English and Chinese versions of the annual report prepared by the Bank pursuant to the IFRS and the Listing Rules are available on the websites of the HKEX and the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 127 Independent Auditor’s Report Independent Auditor’s Report to the Shareholders of CHINA BOHAI BANK CO, LTD (A joint stock company incorporated in the People’s Republic of China) OPINION We have audited the consolidated financial statements of CHINA BOHAI BANK CO, LTD (the “Bank”) and its subsidiary (the “Group”) set out on pages 135 to 271 which comprise the consolidated statement of financial position as at 31 December 2024, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in shareholders’ equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information and other explanatory information In our opinion, the accompanying consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2024 and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRS”) Accounting Standards 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 (“ISA”) 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 International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the IESBA 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 judgement, were of most significance in our audit of the consolidated financial statements for 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 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 129 Independent Auditor’s Report KEY AUDIT MATTERS (Continued) Loss allowances of loans and advances to customers measured at amortised cost and financial investments measured at amortised cost (Continued) Key audit matter (Continued) How the matter was addressed in our audit (Continued) The loss allowances for credit-impaired corporate loans • ECL model and advances measured at amortised cost and financial investments measured at amortised cost are principally – assessed the reliability and appropriateness of measured using the discounted cash flow method the ECL model and the reasonableness of key Management exercises judgement in determining parameters used in the model, including: PD, recoverable cash flows based on a range of factors LGD, EAD, discount rate, forward-looking These factors include available remedies for recovery, the information, and evaluated the rationality of financial situation of the borrowers, collateral valuation, the key management judgements on those the seniority of the claim, the existence of other creditors, key parameters; and disposals – verified, on a sample basis, the accuracy ECLs for loans and advances to customers and financial of ECL model data input such as loan investments is a subjective area due to the degree of agreement amount, due date, interest rate, judgement applied by management in determining guarantee method; loss allowances From the Group’s perspective, the determination of the loss allowances for loans and advances – verified, on a sample basis, the calculation to customers and financial investments is heavily dependent logic of ECL model, and tested whether the on the external macro economy and the Group’s internal model reasonably reflected management’s credit risk management strategy modelling methodology We identified the assessment for the ECL allowance as a key audit matter because of the inherent uncertainty and management judgements involved, and because the loss allowance is significant to the financial results and capital of the Group CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 131 Independent Auditor’s Report KEY AUDIT MATTERS (Continued) Fair value of level 3 financial instruments Key audit matter How the matter was addressed in our audit The Group mainly adopts active market quotations Our audit procedures in respect of fair value assessment of and valuation techniques to conduct valuation on the level 3 financial instruments mainly included the following: financial instruments measured at fair value Valuation techniques are adopted by the Group to determine the • Understood, assessed and tested the design and fair value of level 3 financial instruments without active operating effectiveness of internal controls relating market quotations The selection of valuation techniques to validation of valuation models, the use and and significant unobservable inputs requires significant updating of parameters, the input of underlying accounting judgement and estimation by management data, valuation calculations, reviews and approvals related to the fair value assessment of financial At 31 December 2024, the carrying value of financial instruments assets classified as level 3 due to the use of significant unobservable inputs was RMB17,416 million • Selected samples to perform the following audit procedures: We identified fair value assessment of level 3 financial instruments as a key audit matter because the amount – assessed the appropriateness of the valuation involved is significant and the valuation requires significant models, inputs and assumptions used by the judgement and estimation Group; Refer to the accounting policies in “Note 4 (6) to the – assessed and verified the valuation techniques Consolidated Financial Statements: Financial instruments”, used in the valuation of complex financial “Note 5 to the Consolidated Financial Statements: instruments valuation based on the work Significant accounting judgements and estimates” and done by the internal valuation specialists, “Note 50 to the Consolidated Financial Statements: Fair selected samples to perform independent value” for related disclosures valuation and compared the results with the Group’s valuation CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 133 Independent Auditor’s Report 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 to you, as a body, and for no other purpose We do not assume responsibility towards or accept liability to any other person for the contents of this report 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: • 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 • 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 • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors • 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 • 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 • Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the Group financial statements We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit We remain solely responsible for our audit opinion CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 135 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) NOTES 2024 2023 Interest income 54,881,845 60,317,760 Interest expenses (39,339,375) (42,671,771) Net interest income 6 15,542,470 17,645,989 Fee and commission income 3,995,271 5,077,664 Fee and commission expenses (1,021,212) (1,078,743) Net fee and commission income 7 2,974,059 3,998,921 Net trading gains 8 941,146 502,026 Net gains arising from financial investments 9 5,972,326 2,763,298 Other operating income 10 51,588 87,136 Operating income 25,481,589 24,997,370 Operating expenses 11 (10,488,740) (10,713,146) Impairment losses on assets 14 (9,659,819) (9,121,147) Profit before taxation 5,333,030 5,163,077 Income tax expenses 15 (77,215) (82,174) Net profit 5,255,815 5,080,903 The accompanying notes to the financial statements form part of the consolidated financial statements CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 137 Consolidated Statement of Financial Position At 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 31 December NOTES 2024 2023 Assets Cash and deposits with the central bank 17 148,162,149 103,494,179 Deposits with banks and other financial institutions 18 11,405,462 20,938,491 Placements with banks and other financial institutions 19 4,885,299 12,353,608 Derivative financial assets 20 2,448,184 1,551,181 Financial assets purchased under resale agreements 21 18,531,145 6,532,553 Loans and advances to customers 22 925,361,742 920,394,849 Financial investments: 23 Financial investments measured at fair value through profit or loss (“FVTPL”) 192,864,991 161,057,566 Financial investments measured at FVTOCI 177,376,537 117,150,761 Financial investments measured at amortised cost 330,196,792 354,928,465 Investment in associate 25 – – Property and equipment 26 3,217,544 3,586,673 Deferred tax assets 27 12,362,922 14,759,051 Right-of-use assets 28 3,606,436 3,886,770 Other assets 29 13,422,925 12,099,689 Total assets 1,843,842,128 1,732,733,836 Liabilities and shareholders’ equity Liabilities Borrowings from the central bank 30 121,378,473 133,787,964 Deposits from banks and other financial institutions 31 150,561,544 158,762,222 Placements from banks and other financial institutions 32 23,144,745 34,920,012 Financial liabilities at FVTPL 33 171,916 – Derivative financial liabilities 20 1,799,883 990,612 Financial assets sold under repurchase agreements 34 57,818,338 66,634,253 Deposits from customers 35 1,067,561,795 934,593,879 Income tax payable (621,775) 849,131 Debt securities issued 36 290,863,182 267,923,368 Lease liabilities 37 3,722,824 4,115,588 Other liabilities 38 17,316,375 15,754,106 Total liabilities 1,733,717,300 1,618,331,135 The accompanying notes to the financial statements form part of the consolidated financial statements CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 139 Consolidated Statement of Changes in Shareholders’ Equity For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) Shareholders’ equity attributable to the parent company Non- Share Other equity Capital Surplus General Other Retained controlling Notes capital instruments reserve reserve reserve reserves profits Sub-total interests Total Balance at 1 January 2024 17,762,000 19,961,604 10,732,077 7,828,688 20,678,511 (2,718,089) 40,157,910 114,402,701 – 114,402,701 Changes in equity for the year: Net profit – – – – – – 5,255,815 5,255,815 – 5,255,815 Other comprehensive income – – – – – 420,152 – 420,152 – 420,152 Total comprehensive income – – – – – 420,152 5,255,815 5,675,967 – 5,675,967 Reduction in capital of other equity instruments holders 40 – (19,961,604) (38,396) – – – – (20,000,000) – (20,000,000) Capital contribution from other equity instruments holders 40 – 11,000,000 (3,840) – – – – 10,996,160 – 10,996,160 Appropriation to surplus reserve 41 – – – 568,595 – – (568,595) – – – Appropriation to general reserve 41 – – – – 427,718 – (427,718) – – – Other comprehensive income transferred to retained earnings 23(b) – – – (468,150) – 4,030,861 (3,562,711) – – – Distribution to other equity instruments holders 42 – – – – – – (950,000) (950,000) – (950,000) Balance at 31 December 2024 17,762,000 11,000,000 10,689,841 7,929,133 21,106,229 1,732,924 39,904,701 110,124,828 – 110,124,828 Shareholders’ equity attributable to the parent company Non- Share Other equity Capital Surplus General Other Retained controlling Notes capital instruments reserve reserve reserve reserves profits Sub-total interests Total Balance at 1 January 2023 17,762,000 19,961,604 10,732,077 7,342,356 20,245,453 (3,038,853) 36,946,397 109,951,034 – 109,951,034 Changes in equity for the year: Net profit – – – – – – 5,080,903 5,080,903 – 5,080,903 Other comprehensive income – – – – – 320,764 – 320,764 – 320,764 Total comprehensive income – – – – – 320,764 5,080,903 5,401,667 – 5,401,667 Appropriation to surplus reserve 41 – – – 486,332 – – (486,332) – – – Appropriation to general reserve 41 – – – – 433,058 – (433,058) – – – Distribution to other equity instruments holders 42 – – – – – – (950,000) (950,000) – (950,000) Balance at 31 December 2023 17,762,000 19,961,604 10,732,077 7,828,688 20,678,511 (2,718,089) 40,157,910 114,402,701 – 114,402,701 The accompanying notes to the financial statements form part of the consolidated financial statements CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 141 Consolidated Statement of Cash Flows For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) NOTES 2024 2023 Cash flows from investing activities Proceeds from disposal sale and redemption of investments 765,126,414 563,110,591 Proceeds received from investment activities 1,200,894 14,808,078 Proceeds from disposal of property and equipment and other long-term assets 95,621 3,794 Purchases of investments (809,167,035) (636,435,101) Purchases of property and equipment, intangible assets and other long-term assets (562,926) (598,950) Net cash flows used in investing activities (43,307,032) (59,111,588) Cash flows from financing activities Proceeds from debt securities issued 422,032,323 387,813,695 Proceeds from other equity instruments issued 11,000,000 – Repayment of debt securities issued (400,723,591) (398,851,417) Interest paid on debt securities issued (5,135,760) (5,051,125) Repayment of other equity instruments (20,000,000) – Payments for distribution to other equity instruments holders (950,000) (950,000) Repayment of lease liabilities (1,106,039) (1,143,440) Other cash payments relating to financing activities (3,840) – Net cash flows generated from/(used in) financing activities 5,113,093 (18,182,287) Effect of foreign exchange rate changes on cash and cash equivalents 72,153 282,668 Net increase in cash and cash equivalents 46(a) 54,787,392 4,297,398 Cash and cash equivalents as at 1 January 67,382,604 63,085,206 Cash and cash equivalents as at 31 December 46(b) 122,169,996 67,382,604 Net cash flows generated from operating activities include: Interest received 40,022,856 46,777,590 Interest paid (33,795,767) (35,117,273) The accompanying notes to the financial statements form part of the consolidated financial statements CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 143 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 2 BASIS OF PREPARATION (1) Statement of compliance The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) Accounting Standards issued by the International Accounting Standards Board as well as the disclosure requirements of Hong Kong Companies Ordinance and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (2) Basis of preparation Other items in the consolidated financial statements have been prepared under the historical cost convention except for certain financial instruments measured at fair value, as further explained in the respective accounting policies below The preparation of financial statements in conformity with IFRSs and relevant regulatory requirements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses Actual results may differ from these estimates Judgements made by management in the application of IFRSs that have significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 5 3 APPLICATION OF IFRSs AND AMENDMENTS (1) IFRSs and amendments mandatorily effective for the current year In the current year, the Group has applied, for the first time, the following amendments to IFRSs issued by the IASB which are mandatorily effective for the annual periods beginning on or after 1 January 2024 for the preparation of the Group’s consolidated financial statements: Amendments to IFRS 16 Lease Liability in a Sale and Leaseback Amendments to IAS 1 Classification of Liabilities as Current or Non-current Amendments to IAS 1 Non-current Liabilities with Covenants Amendments to IAS 7 and Amendments to IFRS 7 Supplier’s Financing Arrangements The directors of the Bank believe that the application of the above amendments has no material impact on the financial position and the financial performance for the current and prior years and the disclosures set out in these consolidated financial statements of the Group CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 145 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (1) Subsidiary (Continued) In the Bank’s statement of financial position, long-term equity investment in subsidiary is accounted for using the cost method for subsequent measurement Dividends declared by subsidiary are recognised in profit or loss except for cash dividends or profit distributions declared but not yet distributed that have been included in the price or consideration paid in obtaining the investments In the Bank’s statement of financial position, interest in subsidiary is accounted for using the cost less impairment losses (2) Non-controlling interests Non-controlling interests represent the equity in a subsidiary not attributable to the parent company directly or indirectly Non-controlling interests are presented in the consolidated statement of financial position under shareholders’ equity, separately from equity attributable to the shareholders of the parent company The net profit and comprehensive income attributable to the non-controlling interests and the shareholders of the parent company are presented separately in the consolidated statement of profit or loss and other comprehensive income Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within the consolidated statement of shareholders’ equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised (3) Associate An associate is an entity over which the Group has significant influence but not control or joint control The significant influence refers to the power to be involved in making decisions on financial and operational policies of the investee, but control or joint control with other parties to formulate these policies is not allowed Investments in associates are recognised in the consolidated financial statements using the equity method, and the cost is used as initial recorded value An adjustment is made to the excess (if any) of the fair value of the net identifiable asset of the investee over the investment cost at the acquisition date Subsequently, adjustments will be made based on the changes in the Group’s share of net assets of the associate upon acquisition Any excess of the Group’s share of the fair value of net identifiable asset of the associate over the investment cost is recognised in profit or loss for the period upon acquisition of investments in the associate When the Group’s share of losses of the associate is in excess of its share of the equity, the equity held by the Group will be reduced to zero without recognition of additional losses, except that the Group has to fulfil statutory or presumed obligations or pay on behalf of the associate In this regard, the Group’s equity held in the associate is the carrying amount of investments calculated under the equity method, as well as the substantial portion of the Group’s equity of net investment in the associate CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 147 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (6) Financial instruments A financial instrument is any contract that gives rise to a financial asset of an entity and a financial liability or equity instrument of another entity (i) Initial recognition and measurement of financial instruments A financial asset or financial liability is recognised in the statement of financial position when the Group becomes a party to the contractual provisions of a financial instrument A financial assets and financial liabilities are measured initially at fair value For financial assets and financial liabilities at FVTPL, any related directly attributable transaction costs are charged to profit or loss; for other categories of financial assets and financial liabilities, any related directly attributable transaction costs are included in their initial costs (ii) Classification of financial assets The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics On initial recognition, a financial asset is classified as measured at amortised cost, at FVTOCI, or at FVTPL Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL: – it is held within a business model whose objective is to hold assets to collect contractual cash flows; and – its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding An investment in debt instrument is measured at FVTOCI if it meets both of the following conditions and is not designated as at FVTPL: – it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and – its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 149 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (6) Financial instruments (Continued) (iii) Subsequent measurement of financial assets (Continued) – Investments in debt instruments at FVTOCI These assets are subsequently measured at fair value Interest income calculated using the effective interest method, impairment and foreign exchange gains and losses are recognised in profit or loss Other net gains and losses are recognised in other comprehensive income On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss – Investments in equity instruments at FVTOCI These assets are subsequently measured at fair value Dividends are recognised as income in profit or loss for the period Other net gains and losses are recognised in other comprehensive income On derecognition, gains and losses accumulated in other comprehensive income are reclassified to retained earnings (iv) Classification and subsequent measurement of financial liabilities Financial liabilities are classified as at FVTPL and other financial liabilities – Financial liabilities at FVTPL A financial liability is classified as at FVTPL if it is classified as held-for-trading (including derivative financial liability) or it is designated as such on initial recognition Financial liabilities at FVTPL are subsequently measured at fair value and net gains and losses (including any interest expenses) are recognised in profit or loss, unless the financial liabilities are part of a hedging relationship – Other financial liabilities Other financial liabilities are subsequently measured at amortised cost using the effective interest method (v) Impairment of financial instruments The Group recognises loss allowances for expected credit loss (ECL) on: – financial assets measured at amortised cost; – investments in debt instruments at FVTOCI; – credit commitments and financial guarantee contracts, etc Financial assets measured at fair value, including financial assets at FVTPL, investments in equity instruments designated at FVTOCI and derivative financial assets, are not subject to the ECL assessment CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 151 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (6) Financial instruments (Continued) (v) Impairment of financial instruments (Continued) Presentation of allowance for ECL ECLs are re-measured at each date of statement of financial position to reflect changes in the financial instrument’s credit risk since initial recognition Any change in the ECL amount is recognised as an impairment loss or reversal in profit or loss The Group recognises an impairment gain or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognised in other comprehensive income For credit commitments and financial guarantee contracts, the Group recognises loss allowance in other liabilities (loss allowance for credit commitments) Write-off The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery A write-off constitutes a derecognition event This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in profit or loss in the period in which the recovery occurs (vi) Determination of fair value of financial assets and financial liabilities Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date If there is an active market for a financial asset or financial liability, the quoted price in the active market without adjusting for transaction costs that may be incurred upon future disposal or settlement is used to establish the fair value of the financial asset or financial liability The quoted price in the active market should be readily and regularly available from independent sources (eg the exchange, broker, industry group or pricing service agency) with prudent utilisation of purchase price, selling price and middle price The Group should use market valuation method for fair value assessment as much as is feasible, which represents the prices in actual and regularly market transactions on an arm’s length basis CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 153 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (6) Financial instruments (Continued) (vii) Derecognition of financial assets and financial liabilities (Continued) Where the Group has transferred its rights to receive cash flows from an asset, or has retained its rights to receive cash flows from the asset but assumed the obligation to pay those cash flows to eventual recipients while meeting the conditions of the transfer of financial assets, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay Where a transfer of a financial asset in its entirety meets the criteria for derecognition, the difference between the two amounts below is recognised in profit or loss: – the carrying amount of the financial asset transferred measured at the date of derecognition; – the sum of the consideration received from the transfer and, when the transferred financial asset is an investment in debt instruments at FVTOCI, any cumulative gain or loss that has been recognised directly in other comprehensive income for the part derecognised The Group derecognises a financial liability only when its contractual obligation (or part of it) is extinguished (viii) Offsetting Financial assets and financial liabilities are generally presented separately in the statement of financial position, and are not offset However, a financial asset and a financial liability are offset and the net amount is presented in the statement of financial position when both of the following conditions are satisfied: – The Group currently has a legally enforceable right to set off the recognised amounts – The Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability simultaneously (7) Perpetual bonds At initial recognition, the Group classifies the perpetual bonds issued or their components as financial liabilities or equity instruments based on their contractual terms and their economic substance after considering the definition of financial liabilities and equity instruments Perpetual bonds issued that should be classified as equity instruments are recognised in equity based on the actual amount received Any distribution of dividends or interests during the instruments’ duration is treated as profit appropriation When the perpetual bonds are redeemed according to the contractual terms, the redemption price is charged to equity CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 155 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (9) Embedded derivative financial instruments An embedded derivative is a component of a hybrid contract that also includes a non-derivative host with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative For hybrid instrument where the host contract is a financial asset, the Group classifies and measures the instrument as financial asset as a whole For hybrid instrument where the host contract is a non-financial asset, the Group separates the embedded derivative from the hybrid instrument and treats it as a standalone derivative if all the following conditions are satisfied: – the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; and – a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and – the hybrid (combine) instrument related to derivative instrument is not measured at fair value with changes recognised in profit or loss The separated embedded derivative is measured at fair value, with subsequent changes recognised in profit or loss If the Group is unable to measure the embedded derivative separately either at acquisition or at a subsequent balance sheet date, it designates the entire hybrid instrument as a financial instrument at fair value through profit or loss (10) Financial assets held under resale and repurchase agreements Financial assets purchased under resale agreements are bonds, loans and bills purchased by the Group at certain prices from the sellers under agreements with the commitment to resell these instruments to the original sellers in the future at predetermined prices Financial assets sold under repurchase agreements refer to bonds, loans and bills sold by the Group at certain prices under agreements with the commitment to buy back these instruments in the future at predetermined prices The assets purchased under resale agreements are not recognised, and the payments (including interests accrued) are recognised as receivables on the statement of financial position and are carried at amortised cost Financial assets sold subject to a simultaneous agreement to repurchase these assets are retained in the statements of financial position and measured in accordance with their original measurement principles The proceeds (including interests accrued) from the sale are reported as liabilities and are carried at amortised cost Interest earned on reverse repurchase agreements and interest incurred on repurchase agreements are recognised respectively as interest income and interest expenses over the life of each agreement using the effective interest method CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 157 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (12) Leases A lease is a contract whereby the lessor conveys to the lessee in return for a consideration the right to use an asset for an agreed period of time At inception of a contract, the Group assesses whether a contract is, or contains, a lease A contract is, or contains, a lease if a party of the contract conveys the right to control the use of one or more identified assets for a period of time in exchange for consideration (a) As a lessee At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand- alone prices The Group recognises a right-of-use asset and a lease liability of a lease at the lease commencement date The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability, any lease payments made at or before the commencement date (less any lease incentives received), any initial direct expenses incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease The right-of-use asset is depreciated using the straight-line method If the lessee is reasonably certain to exercise a purchase option by the end of the lease term, the right-of-use asset is depreciated over the remaining useful lives of the underlying asset Otherwise, the right-of-use asset is depreciated from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term Impairment losses of right-of-use assets are accounted for in accordance with the accounting policy described in Note 4 (16) The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date In calculating the present value of lease payments, the Group uses the incremental borrowing rate if the interest rate implicit in the lease is not readily determinable Generally, the Group uses the incremental borrowing rate as the discount rate CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 159 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (12) Leases (Continued) (a) As a lessee (Continued) Short-term leases and leases of low-value assets The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets The Group recognises the lease payments associated with these leases in profit or loss or as the cost of the assets where appropriate using the straight-line method over the lease term (b) As a lessor The Group determines at lease inception whether each lease is a finance lease or an operating lease A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset irrespective of whether the legal title to the asset is eventually transferred An operating lease is a lease other than a finance lease When the Group is a sub-lessor, it assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset If the head lease is a short-term lease to which the Group applies practical expedient described above, then it classifies the sub-lease as an operating lease When lease and non-lease components are contained in a contract, the Group allocates the consideration under the contract to each component in accordance with the IFRS 15 Lease receipts from operating leases are recognised as rental income using the straight-line method over the lease term, as a portion of “Other operating income” (13) Land use rights Land use rights are initially recognised at costs and amortised using the straight-line basis over the legal term of use through profit and loss Impaired land use rights are amortised net of accumulated impairment losses Impairment losses on land use rights are accounted for in accordance with the accounting policies as set out in Note 4 (16) (14) Intangible assets The intangible assets of the Group have finite useful lives The intangible assets are stated at cost less accumulated amortisation and impairment loss The cost of intangible assets less residual value and impairment loss is amortised on the straight-line method over the estimated useful lives The respective amortisation periods for intangible assets of the Group are as follows: Computer software and system development expenses 3 – 5 years CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 161 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (16) Allowance for impairment losses on non-financial assets (Continued) An asset’s fair value less costs to sell is the amount determined by the price of a sale agreement in an arm’s length transaction, less the costs that are directly attributable to the disposal of the asset The present value of expected future cash flows of an asset is determined by discounting the future cash flows, estimated to be derived from continuing use of the asset and from its ultimate disposal to their present value using a pre-tax discount rate that reflects expected future cash flows, the useful life and the discount rate specific to the asset An impairment loss is recognised in profit or loss if the carrying amount of an asset exceeds its recoverable amount A provision for an impairment loss of the asset is recognised accordingly If, in a subsequent period, the amount of impairment loss of the non-financial asset decreases and the decrease can be linked objectively to an event occurring after impairment was recognised, the previously recognised impairment loss is reversed through the profit or loss A reversal of impairment loss is limited to the asset’s carrying amount that would have been determined had no impairment loss been recognised in prior periods (17) Employee benefits Employee benefits include short-term employee benefits, post-employment benefits and other long-term employee benefits provided in various forms of consideration in exchange for service rendered by employees or compensations for the termination of employment relationship Short-term employee benefits include employee wages or salaries, bonuses, allowances and subsidies, staff welfare, premiums or contributions on medical insurance, work injury insurance and maternity insurance, housing funds, union running costs and employee education costs, short-term paid absences Short-term employee benefits are recognised as liabilities in the accounting period in which the service is rendered by the employees based on the amounts paid or the statutory provisioning basis or ratio, with corresponding amounts charged to the profit or loss The Group’s post-employment benefit plans are defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into a separate fund and will have no obligation to pay further contributions During the reporting period, the Group’s post-employment benefits mainly include the social pension schemes, unemployment insurance and annuity plan The social pension schemes and unemployment insurance are calculated according to the base and proportion stipulated by the nation, and the annuity plan is calculated according to a certain proportion of the employees’ total wages in the prior year The amounts based on the above calculations are recognised as liabilities in the accounting period in which the service has been rendered by the employees, with corresponding amounts charged to the profit or loss for the period CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 163 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (18) Income tax (Continued) Current tax balances and deferred tax balances, and movements therein, are presented separately from each other and are not offset Current tax assets are offset against current tax liabilities, and deferred tax assets against deferred tax liabilities, if the Group has the legally enforceable right to set off current tax assets against current tax liabilities and the following additional conditions are met: – in the case of current tax assets and liabilities, the Group intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously; or – in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the same taxation authority on either: – the same taxable entity; or – different taxable entities, which, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered, intend to realise the current tax assets and settle the current tax liabilities on a net basis or realise and settle simultaneously (19) Financial guarantees, provisions and contingent liabilities (i) Financial guarantees Financial guarantees are contracts that require the issuer (the “guarantor”) to make specified payments to reimburse the beneficiary of the guarantee (“holder”) for a loss that the holder incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument The fair value of the guarantee (being the guarantee fees received) is initially recognised as deferred income in other liabilities The deferred income is amortised in profit or loss over the term of the guarantee as income from financial guarantees issued The amount of the liability is subsequently measured at the higher of the amount of the provision for losses determined in accordance with the principles of impairment of financial instruments or the amount initially recognised less accumulated amortisation of the gain related to the financial guarantee contract The increase in the financial guarantee liability is recognised in the profit and loss statement In terms of off-balance sheet credit commitments, the Group applies ECL model to measure the loss caused by particular debtors incapable of paying due debts, which is presented in provisions CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 165 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (21) Income recognition (Continued) The following is the description of accounting policies regarding income from the Group’s principal activities: (i) Interest income Interest income for financial assets is recognised in profit or loss as it is incurred, based on the time for alienation of right to use capital and effective interest rates Interest income includes the amortisation of any discount or premium or differences between the initial carrying amount of an interest-bearing asset and its amount at maturity calculated using the effective interest rate The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating the interest income over the reporting period The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset When calculating the effective interest rate, the Group estimates cash flows considering all contractual terms of the financial instrument (for example, prepayment, call and similar options) but does not consider future credit losses The calculation includes all fees and points paid or received between parties to the contract, transaction costs and all other premiums or discounts that are an integral part of the effective interest rate Interest on the impaired assets is recognised based on the amortised cost of the loan (ie, the gross carrying amount net of the allowance for ECLs) and the effective interest rate (ii) Fee and commission income The Group earns fee and commission income from a diverse range of services it provides to its customers The fee and commission income recognised by the Group reflects the amount of consideration to which the Group expects to be entitled in exchange for transferring promised services to customers, and income is recognised when its performance obligation in contracts is satisfied The Group recognises income over time by measuring the progress towards the complete satisfaction of a performance obligation, if one of the following criteria is met: – The customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs; – The customer controls the service provided by the Group in the course of performance or; – The Group does not provide service with an alternative use to the Group, and the Group has an enforceable right to payment for performance completed to date In other cases, the Group recognises revenue at a point in time at which a customer obtains control of the promised services CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 167 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) (24) Related parties (Continued) (b) An entity is related to the Group if any of the following conditions applies: (i) The entity and the Group are members of the same Group (which means that each parent, subsidiary and fellow subsidiary is related to the others); (ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a Group of which the other entity is a member); (iii) Both entities are joint ventures of the same third party; (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity; (v) The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group; (vi) The entity is controlled or jointly controlled by a person identified in (a) (vii) A person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity); or (viii) The entity, or any member of the Group of which it is a part, provides key management personnel services to the Group or to the Group’s parent Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity (25) Segment reporting The Group determines its operating segments based on its internal organisational structure, management requirements and internal reporting systems If two or more operating segments have similar economic characteristics and meet certain conditions, they are combined into one operating segment for disclosure Based on the operating segments, the Group determines the reporting segment after considering the materiality principle and discloses the operating segments that meet the conditions by taking into account various factors such as the products and services involved in the management’s organisational management, as well as the geographical region In preparing segment reports, revenue from intersegment transactions is measured on the basis of actual transaction prices The accounting policies used in the preparation of segment reports are consistent with those used in the preparation of the Group’s financial statements CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 169 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 5 SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (Continued) (4) Consolidation of structured entities The Group applies its judgement to determine whether the control indicators set out in Note 4 (1) indicate that the Group controls a non-principal guaranteed wealth management product, trust plan or an designated asset management plan The Group manages or invests in non-principal guaranteed wealth management products, trust plans and designated asset management plans To determine whether the Group controls such structured entities, the Group mainly evaluates factors such as its decision-making scope as a manager, rights enjoyed by other parties, remuneration for providing management services and exposure to variable return risks, and determines whether the Group is the principal or agent, and then determines whether the structured entities should be consolidated 6 NET INTEREST INCOME 2024 2023 Interest income arising from Deposits with the central bank 968,083 1,062,880 Deposits with banks and other financial institutions 328,482 329,974 Placements with banks and other financial institutions 605,490 887,569 Loans and advances to customers – Corporate loans and advances 27,486,177 24,945,056 – Personal loans 10,783,079 17,705,626 – Discounted bills 1,107,269 1,169,830 Financial assets purchased under resale agreements 494,527 494,594 Financial investments 13,108,738 13,722,231 Sub-total 54,881,845 60,317,760 Interest expenses on Borrowings from the central bank (3,216,085) (3,566,900) Deposits from banks and other financial institutions (4,825,991) (5,129,480) Placements from banks and other financial institutions (1,568,431) (1,413,741) Deposits from customers (22,162,919) (24,454,658) Financial assets sold under repurchase agreements (799,106) (775,769) Debt securities issued (6,766,843) (7,331,223) Sub-total (39,339,375) (42,671,771) Net interest income 15,542,470 17,645,989 The above interest income does not include interest income from financial instruments at FVTPL CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 171 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 10 OTHER OPERATING INCOME 2024 2023 Government grants 12,176 50,727 Rental income 9,771 12,286 Income from long-term suspended accounts 3,092 15,447 Others 26,549 8,676 Total 51,588 87,136 11 OPERATING EXPENSES 2024 2023 Staff costs – Salaries, bonuses and allowances 3,754,029 3,719,174 – Social insurance and annuity 1,114,388 1,042,089 – Housing funds 629,940 585,837 – Staff welfare 242,938 271,370 – Employee education expenses and labour union expenses 112,325 115,533 – Others 101,256 225,854 Sub-total 5,954,876 5,959,857 Depreciation and amortisation 1,745,140 1,740,894 Taxes and surcharges 417,533 429,065 Interest expenses on lease liabilities 142,038 157,296 Auditor’s remuneration 6,207 5,290 Other general and administrative expenses 2,222,946 2,420,744 Total 10,488,740 10,713,146 For the year ended 31 December 2024, rental expenses relating to short-term leases and leases of low-value assets amounted to RMB62 million (for the year ended 31 December 2023: RMB41 million) For the year ended 31 December 2024, expensed research and development expenditure incurred by the Group amounted to RMB656 million (for the year ended 31 December 2023: RMB721 million) CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 173 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 12 DIRECTORS’ AND SUPERVISORS’ EMOLUMENTS (Continued) Year ended 31 December 2023 Housing funds Discretionary and social bonuses for Notes Fees Salaries insurances Annuities Others prior years Total Executive directors Wang Jinhong (1) – 60 52 32 3 – 147 Qu Hongzhi – 1,185 205 129 3 1,167 2,689 Du Gang (2) – 948 152 128 3 859 2,090 Zhao Zhihong (3) – 948 205 129 3 564 1,849 Li Fuan (21) – 80 29 30 3 829 971 Non-executive directors Au Siu Luen (4) – – – – – – – Yuan Wei – – – – – – – Duan Wenwu (5) – – – – – – – Hu Aimin – – – – – – – Zhang Yunji – – – – – – – Fung Joi Lun Alan (22) – – – – – – – Ye Baishou (23) – – – – – – – Independent non- executive directors Mao Zhenhua (9) 350 – – – – – 350 Chi Guotai (10) 350 – – – – – 350 Mu Binrui (11) 350 – – – – – 350 Tse Yat Hong 350 – – – – – 350 Zhu Ning (12) 350 – – – – – 350 Shum Siu Hung Patrick 233 – – – – – 233 Employee supervisors Wang Chunfeng (16) – 240 205 66 3 386 900 Ma Shuming (17) – 845 205 129 3 1,247* 2,429 External supervisors Qi Ershi (19) 175 – – – – – 175 Diao Qinyi (20) 175 – – – – – 175 Hui Yung Chris 175 – – – – – 175 Total 2,508 4,306 1,053 643 21 5,052* 13,583 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 175 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 12 DIRECTORS’ AND SUPERVISORS’ EMOLUMENTS (Continued) Notes: (Continued) (13) On 14 October 2024, Mr Bai Xinyu was appointed as employee supervisor of the Bank; on 21 October 2024, Mr Bai Xinyu was appointed as chief supervisor of the Bank (14) On 14 October 2024, Mr Li Chengbang was appointed as supervisor of the Bank (15) On 14 October 2024, Ms Zhang Hui was appointed as supervisor of the Bank (16) On 19 July 2024, Mr Wang Chunfeng resigned as chief supervisor of the Bank; on 14 October 2024, Mr Wang Chunfeng resigned as employee supervisor of the Bank (17) On 14 October 2024, Mr Ma Shuming resigned as supervisor of the Bank (18) On 28 June 2024, Ms Du Huibin was appointed as supervisor of the Bank (19) On 28 June 2024, Mr Qi Ershi resigned as supervisor of the Bank (20) On 28 May 2024, Mr Diao Qinyi resigned as supervisor of the Bank (21) On 18 July 2023, Mr Li Fuan resigned as chairman and executive director of the Bank (22) On 26 September 2023, Mr Fung Joi Lun Alan resigned as vice chairman and non-executive director of the Bank (23) On 1 November 2023, Mr Ye Baishou resigned as non-executive director of the Bank CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 177 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 15 INCOME TAX EXPENSES (a) Income tax expenses: Note 2024 2023 Current tax (807,170) 1,842,479 Deferred tax 27(b) 884,385 (1,760,305) Total 77,215 82,174 (b) Reconciliations between income tax expenses and accounting profit are as follows: 2024 2023 Profit before taxation 5,333,030 5,163,077 PRC statutory income tax rate 25% 25% Income tax calculated at PRC statutory tax rate 1,333,258 1,290,769 Non-deductible expenses 360,002 404,627 Non-taxable income (i) (1,140,724) (1,289,414) Deductible interest expenses on undated capital bonds (237,500) (237,500) Others (237,821) (86,308) Income tax expenses 77,215 82,174 (i) The non-taxable income mainly represents the interest income arising from the People’s Republic of China (“PRC”) government bonds, municipal debts, and dividend income from funds 16 BASIC AND DILUTED EARNINGS PER SHARE 2024 2023 Net profit for the period attributable to shareholders of the parent company 5,255,815 5,080,903 Less: Interest on undated capital bonds declared (950,000) (950,000) Net profit for the period attributable to ordinary shareholders of the parent company 4,305,815 4,130,903 Weighted average number of ordinary shares in issue (in thousands) 17,762,000 17,762,000 Basic and diluted earnings per share (in RMB Yuan) 024 023 There is no difference between basic and diluted earnings per share as there were no potentially dilutive shares outstanding during the years CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 179 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 18 DEPOSITS WITH BANKS AND OTHER FINANCIAL INSTITUTIONS Analysed by type and location of counterparty: 31 December 2024 2023 Deposits in Chinese mainland – Banks 6,077,852 12,770,164 Sub-total 6,077,852 12,770,164 Deposits outside Chinese mainland – Banks 5,351,959 8,189,899 Sub-total 5,351,959 8,189,899 Interests accrued 6,739 5,372 Less: Allowances for impairment losses (31,088) (26,944) Total 11,405,462 20,938,491 19 PLACEMENTS WITH BANKS AND OTHER FINANCIAL INSTITUTIONS Analysed by type and location of counterparty: 31 December 2024 2023 Placements in Chinese mainland – Banks 601,261 – – Other financial institutions 3,740,000 12,190,000 Sub-total 4,341,261 12,190,000 Placements outside Chinese mainland – Banks 490,070 – Sub-total 490,070 – Interests accrued 122,454 236,648 Less: Allowances for impairment losses (68,486) (73,040) Total 4,885,299 12,353,608 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 181 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 21 FINANCIAL ASSETS PURCHASED UNDER RESALE AGREEMENTS (a) Analysed by type and location of counterparty 31 December 2024 2023 Financial assets purchased under resale agreements – Banks in Chinese mainland 9,407,700 1,500,000 – Other financial institutions in Chinese mainland 9,120,914 5,035,008 Sub-total 18,528,614 6,535,008 Interests accrued 5,074 1,337 Less: Allowances for impairment losses (2,543) (3,792) Total 18,531,145 6,532,553 (b) Analysed by asset types 31 December 2024 2023 Bonds 18,528,614 6,535,008 Interests accrued 5,074 1,337 Less: Allowances for impairment losses (2,543) (3,792) Total 18,531,145 6,532,553 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 183 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 22 LOANS AND ADVANCES TO CUSTOMERS (Continued) (b) Loans and advances to customers (excluding interests accrued) analysed by industry sector 31 December 2024 Loans and advances secured by Amount Percentage collaterals Leasing and commercial services 239,347,741 2556% 54,705,862 Real estate 93,339,050 997% 68,096,721 Manufacturing 87,787,078 937% 17,680,869 Water conservancy, environment and public facilities management 68,171,356 728% 4,907,660 Wholesale and retail 51,153,524 546% 14,912,204 Construction 28,175,257 301% 10,026,561 Finance 26,074,303 278% 3,892,199 Transportations, storage and post 14,239,861 152% 4,689,990 Production and supply of electricity, heat, gas and water 13,886,782 148% 1,054,099 Information transmission, software and IT services 7,776,105 083% 1,461,374 Scientific research and technical services 6,650,275 071% 1,249,784 Mining 6,463,006 069% 796,382 Education 3,614,001 039% 2,528,999 Others 8,057,674 086% 2,254,062 Sub-total of corporate loans and advances 654,736,013 6991% 188,256,766 Personal loans 222,027,091 2371% 167,870,841 Discounted bills 59,727,587 638% 59,727,587 Gross loans and advances to customers 936,490,691 10000% 415,855,194 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 185 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 22 LOANS AND ADVANCES TO CUSTOMERS (Continued) (c) Analysed by geographical sector (excluding interests accrued) 31 December 2024 Loans and advances secured by Amount Percentage collaterals Northern and Northeastern China 394,668,711 4214% 176,092,973 Eastern China 260,038,530 2777% 94,784,509 Central and Southern China 198,630,819 2121% 107,202,979 Western China 83,152,631 888% 37,774,733 Gross loans and advances to customers 936,490,691 10000% 415,855,194 31 December 2023 Loans and advances secured by Amount Percentage collaterals Northern and Northeastern China 431,885,105 4631% 207,904,141 Eastern China 217,892,309 2336% 98,384,941 Central and Southern China 205,393,575 2202% 118,399,337 Western China 77,473,446 831% 39,846,275 Gross loans and advances to customers 932,644,435 10000% 464,534,694 The geographical areas are categorised as follows: Northern and Northeastern China includes Head Office, Beijing Branch, Tianjin Branch, Tianjin Pilot Free Trade Zone Branch, Dalian Branch, Hohhot Branch, Taiyuan Branch, Shijiazhuang Branch, Changchun Branch and Shenyang Branch Eastern China includes Nanjing Branch, Hangzhou Branch, Jinan Branch, Shanghai Branch, Shanghai Pilot Free Trade Zone Branch, Hefei Branch, Suzhou Branch, Qingdao Branch, Ningbo Branch and Nanchang Branch Central and Southern China includes Guangzhou Branch, Shenzhen Branch, Hong Kong Branch, Changsha Branch, Wuhan Branch, Fuzhou Branch, Zhengzhou Branch, Xiamen Pilot Free Trade Zone Branch, Haikou Branch and Nanning Branch Western China includes Chengdu Branch, Xi’an Branch, Chongqing Branch, Guiyang Branch and Kunming Branch CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 187 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 22 LOANS AND ADVANCES TO CUSTOMERS (Continued) (e) Overdue loans analysed by overdue period (excluding interests accrued) (Continued) 31 December 2023 Overdue Overdue Overdue more than more than within three three months one year to Overdue months to one year three years more than (inclusive) (inclusive) (inclusive) three years Total Unsecured loans 2,793,094 2,443,061 1,097,366 290,053 6,623,574 Guaranteed loans 4,267,500 1,047,927 2,511,038 683,995 8,510,460 Collateralised loans 4,210,238 1,866,499 3,876,410 930,793 10,883,940 Pledged loans 1,786,568 97,639 265,731 719,410 2,869,348 Total 13,057,400 5,455,126 7,750,545 2,624,251 28,887,322 As a percentage of gross loans and advances to customers 140% 059% 083% 028% 310% Overdue loans represent loans of which the whole or part of the principal or interest were overdue for one day or more CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 189 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 22 LOANS AND ADVANCES TO CUSTOMERS (Continued) (f) Movements in allowance for impairment losses (Continued) (ii) Movements in allowance for impairment of loans and advances to customers at FVTOCI: Year ended 31 December 2024 Stage 1 Stage 2 Stage 3 Total As at 1 January 18,847 – 1,367,990 1,386,837 Charge/(reversal) for the year 17,608 – (74,227) (56,619) As at 31 December 36,455 – 1,293,763 1,330,218 Year ended 31 December 2023 Stage 1 Stage 2 Stage 3 Total As at 1 January 67,791 – 1,470,341 1,538,132 Transferred: – to Stage 3 (94) – 94 – Reversal for the year (48,850) – (102,445) (151,295) As at 31 December 18,847 – 1,367,990 1,386,837 Carrying amount of loans and advances to customers at FVTOCI is measured at fair value, allowance for impairment losses on loans and advances to customers at FVTOCI is recognised in other comprehensive income without decreasing the carrying amount of loans and advances to customers presented in the consolidated statement of financial position, and charge or reversal of impairment loss is recognised in current period profit or loss CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 191 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 23 FINANCIAL INVESTMENTS (Continued) (a) Financial investments measured at FVTPL (Continued) Other financial investments measured at FVTPL: 31 December 2024 2023 Fund investments – Unlisted 70,852,301 54,704,396 Equity investments – Listed outside Hong Kong 500,699 448,210 – Unlisted 3,588,068 3,573,305 Trust plans and asset management plans – Unlisted 87,564,673 75,696,019 Total other financial investments measured at FVTPL 162,505,741 134,421,930 Total financial investments measured at FVTPL 192,864,991 161,057,566 Note: (i) As at 31 December 2024 and 2023, certain financial investments measured at FVTPL were pledged for borrowings from the central bank and financial assets sold under repurchase agreements (Note 52 (e)) CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 193 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 23 FINANCIAL INVESTMENTS (Continued) (b) Financial investments measured at FVTOCI (Continued) Movements in allowance for impairment losses of Financial investments measured at FVTOCI are as follows: Year ended 31 December 2024 Stage 1 Stage 2 Stage 3 Total As at 1 January 148,805 – 10,000 158,805 Charge for the year 199,248 – – 199,248 Exchange rate changes and others 54 – – 54 As at 31 December 348,107 – 10,000 358,107 Year ended 31 December 2023 Stage 1 Stage 2 Stage 3 Total As at 1 January 122,651 – 10,000 132,651 Charge for the year 26,166 – – 26,166 Exchange rate changes and others (12) – – (12) As at 31 December 148,805 – 10,000 158,805 Carrying amount of financial investments measured at FVTOCI is measured at fair value, allowance for impairment on financial investments measured at FVTOCI is recognised in other comprehensive income without decreasing the carrying amount of financial investments presented in the consolidated statement of financial position, and charge or reversal of impairment loss is recognised in current period profit or loss CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 195 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 23 FINANCIAL INVESTMENTS (Continued) (c) Financial investments measured at amortised cost (Continued) Movements in allowances for impairment losses of financial investments measured at amortised cost are as follows: Year ended 31 December 2024 Stage 1 Stage 2 Stage 3 Total As at 1 January 772,484 727,652 7,216,463 8,716,599 Transferred: – to Stage 1 – – – – – to Stage 2 – – – – – to Stage 3 (65,185) (86,499) 151,684 – Charge/(reversal) for the year 705,257 (31,210) (603,671) 70,376 Write-offs/transfer out – – (315,464) (315,464) Exchange rate changes and others (293) – – (293) As at 31 December 1,412,263 609,943 6,449,012 8,471,218 Year ended 31 December 2023 Stage 1 Stage 2 Stage 3 Total As at 1 January 928,829 3,117,392 6,019,605 10,065,826 Transferred: – to Stage 1 50,710 – (50,710) – – to Stage 2 (145,282) 145,282 – – – to Stage 3 – (2,403,561) 2,403,561 – (Reversal of)/charge for the year (68,620) (131,461) 317,743 117,662 Write-offs/transfer out – – (1,473,736) (1,473,736) Exchange rate changes and others 6,847 – – 6,847 As at 31 December 772,484 727,652 7,216,463 8,716,599 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 197 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 26 PROPERTY AND EQUIPMENT Leasehold Operating Motor Construction Premises improvements equipment vehicles in progress Total Cost As at 1 January 2023 3,875,984 1,054,345 1,955,266 87,087 562,760 7,535,442 Additions and transfer in – 186,143 235,169 1,622 6,033 428,967 Disposals and transfer out – (15,105) (121,174) (1,637) – (137,916) Foreign currency translation differences – 301 451 15 – 767 As at 31 December 2023 3,875,984 1,225,684 2,069,712 87,087 568,793 7,827,260 As at 1 January 2024 3,875,984 1,225,684 2,069,712 87,087 568,793 7,827,260 Additions and transfer in 199,089 82,644 234,627 3,404 32,224 551,988 Disposals and transfer out – (16,380) (73,297) (10,271) (231,761) (331,709) Foreign currency translation differences – 240 367 12 – 619 As at 31 December 2024 4,075,073 1,292,188 2,231,409 80,232 369,256 8,048,158 Accumulated depreciation As at 1 January 2023 (1,541,880) (830,957) (1,351,932) (70,206) – (3,794,975) Charged for the year (185,892) (154,919) (234,005) (4,695) – (579,511) Eliminated on disposals – 15,071 118,377 1,082 – 134,530 Foreign currency translation differences – (301) (316) (14) – (631) As at 31 December 2023 (1,727,772) (971,106) (1,467,876) (73,833) – (4,240,587) As at 1 January 2024 (1,727,772) (971,106) (1,467,876) (73,833) – (4,240,587) Charged for the year (191,796) (165,055) (224,710) (3,717) – (585,278) Eliminated on disposals – 16,038 68,790 8,984 – 93,812 Foreign currency translation differences – (240) (305) (11) – (556) As at 31 December 2024 (1,919,568) (1,120,363) (1,624,101) (68,577) – (4,732,609) Allowance for impairment As at 1 January 2023 – – – – – – Charged for the year – – – – – – As at 31 December 2023 – – – – – – As at 1 January 2024 – – – – – – Charged for the year – – – – (98,005) (98,005) As at 31 December 2024 – – – – (98,005) (98,005) Net book value As at 31 December 2023 2,148,212 254,578 601,836 13,254 568,793 3,586,673 As at 31 December 2024 2,155,505 171,825 607,308 11,655 271,251 3,217,544 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 199 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 27 DEFERRED TAX ASSETS (Continued) (b) Movements in deferred tax Net losses/ Allowances (gains) from Net balance for impairment changes in of deferred losses fair value Others tax assets As at 1 January 2023 10,766,639 972,323 1,366,249 13,105,211 Recognised in profit or loss 1,805,945 (113,446) 67,806 1,760,305 Recognised in other comprehensive income 31,553 (138,018) – (106,465) 31 December 2023 12,604,137 720,859 1,434,055 14,759,051 Recognised in profit or loss (923,765) (754,743) 794,123 (884,385) Recognised in other comprehensive income (34,702) (1,477,042) – (1,511,744) 31 December 2024 11,645,670 (1,510,926) 2,228,178 12,362,922 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 201 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 29 OTHER ASSETS 31 December Notes 2024 2023 Settlement receivable 6,263,025 4,656,690 Interest receivable (a) 2,840,447 3,327,508 Guarantee deposits 710,345 951,635 Land use rights 370,536 385,261 Fees receivable 395,529 321,011 Prepayments 200,454 194,162 Intangible assets 287,596 291,186 Precious metals 359,345 – Others 2,957,129 2,776,355 Sub-total 14,384,406 12,903,808 Less: Allowances for impairment losses (b) (961,481) (804,119) Total 13,422,925 12,099,689 (a) Interest receivable 31 December 2024 2023 Interest receivable arising from: Loans and advances to customers 1,075,461 953,664 Financial investments 1,764,986 2,373,844 Total 2,840,447 3,327,508 As at 31 December 2024 and 2023, interest receivable only includes interest that has been due for the relevant financial instruments but not yet received Interest on financial instruments based on the effective interest method has been reflected in the gross carrying amount of corresponding financial instruments (b) Movements in allowance for impairment losses of other assets are as follows: 2024 2023 As at 1 January 804,119 73,646 Charge for the year 2,456,843 2,318,893 Write-offs and transfer out (2,299,481) (1,588,420) As at 31 December 961,481 804,119 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 203 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 32 PLACEMENTS FROM BANKS AND OTHER FINANCIAL INSTITUTIONS Analysed by type and location of counterparty: 31 December 2024 2023 Placements in Chinese mainland – Banks 12,441,557 18,790,215 Sub-total 12,441,557 18,790,215 Placements outside Chinese mainland – Banks 10,409,008 15,515,078 Sub-total 10,409,008 15,515,078 Interests accrued 294,180 614,719 Total 23,144,745 34,920,012 33 Financial liabilities at FVTPL 31 December 2024 2023 Financial liabilities at FVTPL – Structured notes 171,916 – Total 171,916 – The Group has designated the issued structured notes as financial liabilities at FVTPL As at 31 December 2024, the amount of change in fair value of FVTPL due to changes in credit risk was not significant CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 205 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 35 DEPOSITS FROM CUSTOMERS 31 December 2024 2023 Demand deposits – Corporate customers 238,497,466 219,169,451 – Individual customers 36,293,255 33,061,936 Sub-total 274,790,721 252,231,387 Time deposits – Corporate customers 416,936,133 346,997,589 – Individual customers 175,982,215 167,940,207 Sub-total 592,918,348 514,937,796 Pledged deposits – Acceptances 89,373,241 80,707,395 – Letters of credit and guarantees 60,270,878 32,807,576 – Letters of guarantees 2,532,115 2,343,512 – Others 23,838,062 31,914,101 Sub-total 176,014,296 147,772,584 Fiscal deposits 159,715 174,755 Inward and outward remittances 2,205,715 45,456 Interests accrued 21,473,000 19,431,901 Total 1,067,561,795 934,593,879 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 207 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 36 DEBT SECURITIES ISSUED (Continued) Notes: (Continued) (b) Financial bonds issued (Continued) (iv) On 1 December 2022, the Group issued three-year financial bonds with nominal value of RMB15,000 million The coupon interest rate per annum was 295% As at 31 December 2024, the balance of the financial bonds issued above was RMB14,997 million (v) On 22 February 2022, the Group issued three-year financial bonds with nominal value of RMB10,000 million The coupon interest rate per annum was 295% As at 31 December 2024, the balance of the financial bonds issued above was RMB9,999 million (vi) On 6 April 2021, the Group issued three-year financial bonds with nominal value of RMB15,000 million The coupon interest rate per annum was 355% The above issued financial bonds were fully redeemed on 8 April 2024 (vii) On 26 April 2021, the Group issued three-year financial bonds with nominal value of RMB10,000 million The coupon interest rate per annum was 353% The above issued financial bonds were fully redeemed on 28 April 2024 (c) Tier 2 capital bonds issued (i) On 18 April 2024, the Group issued ten-year fixed interest rate tier 2 capital bonds with nominal value of RMB14,000 million The coupon interest rate per annum was 277% According to the issuance terms, the Group has an option to redeem all the bonds at face value on the last day of the fifth year As at 31 December 2024, the balance of the financial bonds issued above was RMB13,994 million (ii) On 15 January 2021, the Group issued ten-year fixed interest rate tier 2 capital bonds with nominal value of RMB9,000 million The coupon interest rate per annum was 440% According to the issuance terms, the Group has an option to redeem all the bonds at face value on the last day of the fifth year As at 31 December 2024, the balance of the financial bonds issued above was RMB8,993 million (d) Certificates of deposit issued For the year ended 31 December 2024, the Group issued a number of certificates of deposit with total face value of RMB3,603 million and duration between 1 to 12 months The effective interest rates ranged from 220% to 559% per annum As at 31 December 2024, the balance of the above certificates of deposit issued but not yet due was RMB3,568 million (31 December 2023: RMB2,535 million) As at 31 December 2024 and 2023, there were no defaults of principal and interest or other breaches with respect to these bonds None of the above bonds were secured CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 209 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 38 OTHER LIABILITIES (Continued) (a) Accrued staff costs 31 December 2024 2023 Salaries, bonuses and allowances payable 4,652,508 4,366,142 Pension and annuity payable 18,872 18,325 Other social insurances payable 6,764 6,718 Housing funds payable 5,857 5,883 Others 394,973 403,768 Total 5,078,974 4,800,836 (b) Provisions 31 December 2024 2023 Provision for credit commitment losses 466,961 336,027 Expected litigation losses 42,244 42,244 Others 480 887 Total 509,685 379,158 Movements in provisions for credit commitment losses are as follows: 31 December 2024 Stage 1 Stage 2 Stage 3 Total As at 1 January 2024 333,398 851 1,778 336,027 Charge/(reversal) for the year 130,909 (143) 19 130,785 Exchange rate changes and others 149 – – 149 As at 31 December 2024 464,456 708 1,797 466,961 31 December 2023 Stage 1 Stage 2 Stage 3 Total As at 1 January 2023 433,343 759 707 434,809 (Reversal)/charge for the year (101,735) 92 1,071 (100,572) Exchange rate changes and others 1,790 – – 1,790 As at 31 December 2023 333,398 851 1,778 336,027 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 211 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 40 OTHER EQUITY INSTRUMENTS (Continued) Undated capital bonds (Continued) (b) Main clauses (i) Issue size The issue size of the Bonds for the period is RMB11 billion (ii) Term of the Bonds The Bonds for the period will continue to be outstanding so long as the Issuer’s business continues to operate (iii) Coupon rate The coupon rate of the Bonds will be adjusted at defined intervals, with a coupon rate adjustment period every 5 years since the payment settlement date In any coupon rate adjusted period, the interest payments on the Bonds will be paid at a prescribed fixed coupon rate The coupon rate of the Bonds for the period includes a benchmark rate plus a fixed spread The benchmark rate is the arithmetic average of the yields to maturity of 5 trading days prior to the Announcement Date of the Subscription Agreement, as indicated by the yield to maturity curve of applicable 5-year China government Notes (rounded to 001%) published on wwwChinaBondcomcn (or other websites approved by the China Central Depository & Clearing Co, Ltd) The fixed spread is the difference between the coupon rate and the benchmark rate as determined at the time of issuance The fixed spread will not be adjusted once determined The Bonds will not have any elevation in interest rates nor any other incentive to redeem (iv) Conditional redemption rights of the issuer The Bonds issuance sets conditional redemption rights for the issuer From the fifth anniversary since the issuance of the Bonds, the issuer may redeem the Bonds in whole or in part on each interest payment date (including the fifth interest payment date since the issuance) If, after the issuance, the Bonds no longer qualify as Additional Tier 1 Capital as a result of an unforeseeable change or amendment to relevant provisions of supervisory regulations, the issuer may redeem all but not part of the Bonds (v) Subordination The claims in respect of the Bonds, in the event of the liquidation of the issuer, will be subordinated to claims of depositors, general creditors, and subordinated indebtedness that rank senior to the Bonds; shall rank in priority to all classes of shares held by the issuer’s shareholders and rank pari passu with the claims in respect of any other Additional Tier 1 Capital instruments of the issuer that rank pari passu with the Bonds CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 213 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 41 RESERVES (a) Capital reserve 31 December 2024 2023 Share premium 10,689,841 10,732,077 (b) Surplus reserve Pursuant to the Company Law of the PRC and the Articles, the Group is required to appropriate 10% of its net profit in accordance with the Accounting Standards for Business Enterprises and other relevant regulations to the statutory surplus reserve until the balance reaches 50% of its registered capital (c) General reserve Pursuant to the Administrative Measures for the Provision of Reserves of Financial Enterprises (Cai Jin [2012] No 20) issued by the Ministry of Finance, the Bank is required to set aside a general reserve through profit appropriation which should not be lower than 15% of the ending balance of its gross risk-bearing assets on an annual basis Pursuant to the Interim Measures for the Supervision and Administration of the Risk Reserves of Publicly Offered Securities Investment Funds, the Bank is required to set aside a risk reserve for custody services of publicly offered securities investment funds on an annual basis from its net profit as profit distribution, at a rate of 25% of the total custody income generated from publicly offered securities investment funds during the year The Bank’s subsidiary accrues risk reserves in accordance with the Measures for the Administration of Wealth Management Subsidiary Companies of Commercial Banks until the balance of risk reserve reaches 1% of the balance of wealth management products CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 215 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 42 APPROPRIATION OF PROFITS Dividend on ordinary shares In accordance with the resolution at the Bank’s Annual General Meeting on 28 June 2024, the Bank paid no dividend on ordinary shares for 2023 In accordance with the resolution at the Bank’s Annual General Meeting on 18 May 2023, the Bank paid no dividend on ordinary shares for 2022 Interests on undated capital bonds The Bank declared and distributed the interest on the undated capital bonds for year 2023 amounting to RMB950 million on 16 September 2024 The Bank declared and distributed the interest on the undated capital bonds for year 2022 amounting to RMB950 million on 16 September 2023 43 INTERESTS IN STRUCTURED ENTITIES THAT ARE NOT INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS (a) The Group’s interests in structured entities sponsored by third party institutions: The Group holds interests in certain structured entities sponsored by third party institutions through investments in the units issued by these structured entities Such structured entities include trust plans and asset management plans issued by securities company or trust company and investment funds The nature and purpose of these structured entities are to generate fees from managing assets on behalf of third-party investors These vehicles are financed through the issue of units to investors The following tables set out an analysis of the carrying amounts of interests held by the Group in structured entities that are not included in consolidated financial statements, as well as an analysis of the line items relevant to assets and liabilities in the Group’s financial statements as at 31 December 2024 and 2023: 31 December 2024 Financial Financial Financial investments Total investments investments measured at carrying Maximum at FVTPL at FVTOCI amortised cost amount exposure Trust plans and asset management plans 87,042,916 – 103,603,204 190,646,120 190,646,120 Funds 70,852,301 – – 70,852,301 70,852,301 Total 157,895,217 – 103,603,204 261,498,421 261,498,421 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 217 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 44 TRANSFER OF FINANCIAL ASSETS In the ordinary course of business, the Group enters into certain transactions that result in the transfer of recognised financial assets to third parties or special-purpose entities, and the related financial assets are derecognised if the conditions for derecognition are met When the Group retains substantially all the risks and rewards of the transferred assets, the transfer of related financial assets does not meet the conditions for derecognition and the Group continues to recognise the said assets The Group enters into transactions in the normal course of business by which it sells financial assets to special purpose trust and issues trust shares to investors through the special purpose trusts The Group assessed among other factors, whether or not to derecognise the transferred assets by evaluating the extent to which it retains the risks and rewards of the assets and whether it has relinquished control over these assets For the year ended 31 December 2024, the Group transferred credit assets with gross principal amount of RMB29,967 million to independent third party, and the transfer price was RMB25,024 million These assets were all fully derecognised For the year ended 31 December 2023, the Group did not transfer any financial assets 45 CAPITAL MANAGEMENT The Group implements a comprehensive capital management framework, covering the management of the regulated capital, economic capital and book capital, particularly the capital compliance management, capital planning, allocation and evaluation In setting its capital adequacy objective, the Group considers regulatory requirements, external rating objective and its own risk appetite, so as to protect the interest of its customers and creditors, maximise the value of shareholders and meet all regulatory requirements on capital management Since 1 January 2024, the Group measures capital adequacy ratios in accordance with related regulatory requirements in the Administrative Measures for the Capital of Commercial Banks issued by the NFRA In calculating its capital adequacy ratios, the Group considers all its domestic and overseas branches and sub-branches and financial institution subsidiary (excluding insurance companies) The Group uses the weighting method to measure credit risk weighted assets, in which on-balance sheet business determines risk weights based on asset type, counterparty, collateral status and other relevant risk elements, considering the impact of qualified risk mitigation; and off-balance sheet business calculates risk-weighted assets using the same methodology as that used for on-balance sheet business, adjusted for contingent loss characteristics Counterparty credit risk for over-the-counter derivatives is calculated using the current exposure method; market risk is measured using the simplified standard method; and operational risk is measured using the standard method The NFRA requires commercial banks to meet the requirements for capital indicators at all levels in the Administrative Measures for the Capital of Commercial Banks For non-systemically important banks, the minimum ratios for core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio are 750%, 850% and 1050%, respectively During the report disclosure period, the Group has complied in full with the capital requirements stipulated by the regulatory authorities CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 219 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 46 NOTES TO THE STATEMENT OF CASH FLOWS (a) Net change in cash and cash equivalents 31 December 2024 2023 Cash and cash equivalents as at 31 December 122,169,996 67,382,604 Less: Cash and cash equivalents as at 1 January 67,382,604 63,085,206 Net increase in cash and cash equivalents 54,787,392 4,297,398 (b) Cash and cash equivalents 31 December 2024 2023 Cash on hand 470,357 362,503 Deposits with the central bank other than restricted deposits 90,955,021 39,725,030 Deposits with banks and other financial institutions (Original maturity within 3 months) 11,429,811 20,760,063 Placements with banks and other financial institutions (Original maturity within 3 months) 786,193 – Financial assets purchased under resale agreements (Original maturity within 3 months) 18,528,614 6,535,008 Total 122,169,996 67,382,604 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 221 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 47 RELATED PARTIES (Continued) Related party transactions (a) Pricing policy Transactions between the Group and related parties are conducted in the normal course of its business and under normal commercial terms The pricing policies are no more favourable than those offered to independent third parties (b) Transactions with related parties other than key management personnel (i) Transactions with major shareholders: Years ended 31 December 2024 2023 Transactions during the year Interest income 176,742 220,692 Fee and commission income – 1,799 Interest expenses 33 72 Operating expenses 26,325 26,033 31 December 2024 2023 Balances at the end of the year Deposits with banks and other financial institutions 407,747 217,406 Loans and advances to customers 3,375,563 3,416,489 Deposits from customers 3,296 51,371 Lease liabilities 13,412 35,271 (ii) Transactions with subsidiary: Years ended 31 December 2024 2023 Transactions during the year Interest expenses 2,720 29,315 Fee and commission expenses 10 269,137 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 223 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 47 RELATED PARTIES (Continued) Related party transactions (Continued) (b) Transactions with related parties other than key management personnel (Continued) (iv) Transactions with other related parties: (Continued) 31 December 2024 2023 Balances at the end of the year Deposits with banks and other financial institutions 1,651,019 7,263,694 Derivative financial assets 315 398 Loans and advances to customers 14,634,479 15,608,271 Financial investments 2,484,743 2,798,470 Deposits from banks and other financial institutions 4,662,406 7,705,275 Derivative financial liabilities 325 2,577 Deposits from customers 7,757,546 5,348,933 Debt securities issued – 1,002,823 Lease liabilities 34,427 178,583 Off-balance sheet item Derivative financial instruments-notional principal 280,000 440,000 Bank acceptances 1,140,276 430,848 Letters of guarantees 24,389 48,211 Letters of credit 498,055 952,761 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 225 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 48 SEGMENT REPORTING (a) Operating segment The Group manages its business by business lines Consistent with the way in which information is reported internally to the Group’s most senior executive management for the purposes of resource allocation and performance assessment, the Group defines reporting segments based on the following operating segments: Corporate banking This segment represents the provision of a range of financial products and services to corporations, government agencies and financial institutions These products and services include corporate loans and advances, trade financing, deposit taking activities, agency services, wealth management services, consulting and advisory services, remittance and settlement services and guarantee services Retail banking This segment represents the provision of a range of financial products and services to retail customers These products and services include personal loans, deposit taking activities, personal wealth management services and remittance services Financial market business This segment covers the Group’s financial market business The financial markets business enters into inter- bank money market transactions, repurchases transactions, interbank investments, and bond investments and trading The financial market business segment also covers management of the Group’s overall liquidity position, including the issuance of debts Others These represent assets, liabilities, income and expenses which cannot directly attributable or cannot be allocated to a segment on a reasonable basis Measurement of segment assets and liabilities and of segment income, expenses and results is based on the Group’s accounting policies Internal charges and transfer prices are determined with reference to market rates and have been reflected in the performance of each segment Interest income and expense earned from third parties are referred to as “external net interest income/expense” Net interest income and expense arising from internal charges and transfer pricing adjustments are referred to as “internal net interest income/expense” Segment income, expenses, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis Intra-group balances and intra-group transactions are eliminated by segment income, expenses, assets and liabilities as part of the consolidation process Segment capital expenditure is the total cost incurred during 2024 and 2023 to acquire property and equipment, intangible assets and other long-term assets CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 227 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 48 SEGMENT REPORTING (Continued) (a) Operating segment (Continued) Others (Continued) Year ended 31 December 2023 Financial Corporate Retail market banking banking business Others Total Operating income External net interest income/(expenses) 8,410,951 12,012,098 (2,777,060) – 17,645,989 Internal net interest income/(expenses) 2,498,302 (3,256,462) 758,160 – – Net interest income/(expenses) 10,909,253 8,755,636 (2,018,900) – 17,645,989 Net fee and commission income/(expenses) 2,064,665 (399,752) 2,332,005 2,003 3,998,921 Net trading gains/(losses) 771,360 25,648 (294,982) – 502,026 Net gains from financial investments 100,750 708 2,627,040 34,800 2,763,298 Other operating income 23,702 1,725 60 61,649 87,136 Operating income 13,869,730 8,383,965 2,645,223 98,452 24,997,370 Operating expenses (4,967,692) (4,727,175) (827,634) (190,645) (10,713,146) Impairment losses on assets (4,445,067) (3,184,387) (1,491,693) – (9,121,147) Profit/(loss) before taxation 4,456,971 472,403 325,896 (92,193) 5,163,077 Other segment information – Depreciation and amortisation 798,289 828,905 96,899 16,801 1,740,894 – Capital expenditure 226,400 250,991 26,222 74,542 578,155 31 December 2023 Financial Corporate Retail market banking banking business Others Total Segment assets 884,361,628 295,048,477 510,797,411 27,767,269 1,717,974,785 Deferred tax assets 14,759,051 Total assets 1,732,733,836 Segment liabilities 804,533,067 212,658,624 592,651,573 8,487,871 1,618,331,135 Total liabilities 1,618,331,135 Credit commitments 310,045,628 17,788,260 – – 327,833,888 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 229 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 48 SEGMENT REPORTING (Continued) (b) Geographical segment (Continued) Year ended 31 December 2023 Northern and Northeastern Central and China Eastern China Southern China Western China Elimination Total Operating income External net interest income 8,474,187 3,544,519 3,678,062 1,949,221 – 17,645,989 Internal net interest (expenses)/income (69,001) 299,422 411,404 (641,825) – – Net interest income 8,405,186 3,843,941 4,089,466 1,307,396 – 17,645,989 Net fee and commission income 2,774,230 538,427 506,671 179,593 – 3,998,921 Net trading gains 211,898 193,983 78,268 17,877 – 502,026 Net gains from financial investments 2,762,974 178 146 – – 2,763,298 Other operating income 32,416 15,905 33,681 5,134 – 87,136 Operating income 14,186,704 4,592,434 4,708,232 1,510,000 – 24,997,370 Operating expenses (6,056,609) (2,074,238) (1,916,399) (665,900) – (10,713,146) Impairment losses on assets (6,425,479) (611,030) (1,629,952) (454,686) – (9,121,147) Profit before taxation 1,704,616 1,907,166 1,161,881 389,414 – 5,163,077 Other segment information – Depreciation and amortisation 826,351 385,245 394,706 134,592 – 1,740,894 – Capital expenditure 399,476 84,587 63,617 30,475 – 578,155 31 December 2023 Northern and Northeastern Central and China Eastern China Southern China Western China Elimination Total Segment assets 1,313,871,106 290,301,112 274,845,198 84,126,869 (245,169,500) 1,717,974,785 Deferred tax assets 14,759,051 Total assets 1,732,733,836 Segment liabilities 1,217,467,599 288,394,303 273,901,166 83,737,567 (245,169,500) 1,618,331,135 Total liabilities 1,618,331,135 Credit commitments 111,697,094 95,095,249 95,704,992 25,336,553 – 327,833,888 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 231 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (a) Credit risk (Continued) (I) Measurement of credit risk Loans and advances to customers and off-balance sheet credit commitments The Group’s Risk Management Department, Credit Approval Department, Asset Monitoring Department and Asset Resolution Department are jointly responsible for the credit risk management of various types of credit business and financial investments For wholesale credit business, the Group measures the default risk and loss given default of customers in accordance with the risk measurement requirements of the internal rating method, and continuously improves them through continuous data monitoring, objective validation and performance evaluation, enriches the practical application of risk measurement results in the credit risk management system, and actively explores the construction of the Group’s internal rating system For the retail credit business, the Group, taking into account its own business characteristics and customer structure, rationally applies financial technology to continuously improve its credit scoring model and data mining and risk analysis of customers’ historical behavioural performance, so as to progressively enhance the effectiveness of credit access, inventory asset management, asset classification and impairment calculation Deposits and placements with banks and other financial institutions and financial assets purchased under resale agreements The Group adopts a centralised underwriting process in relation to approving credit limits for financial institution counterparties engaged in interbank placements, investment securities and securities under repurchase and resale agreements The Group assesses the credit risk of these counterparties adopting a quantitative and qualitative approach which collectively involves the assessment and review of their credit rating in the banking industry, customer base and profiles, management capabilities, business prospects, industry position, external environment, regulatory indicators and cooperation with the Group and financial standing and performance, etc CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 233 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (a) Credit risk (Continued) (III) Credit risk mitigation measures Collaterals and pledges The credit policies of the Group provide specific requirements on the acceptable collaterals and pledges, and set different rates for different collaterals and pledges based on their nature and extent of realisation The Group sets out specific requirements for the qualifications of professional evaluation agencies In addition, through credit risk management system, the Group implements strict management on the collaterals and pledges and their ownership certificates to prevent the occurrence of operational risks The acceptable collaterals and pledges include financial collateral, real estate properties, accounts receivable and other collateral, mainly consisting of cash and cash equivalents, stock, state-owned construction land use right, residential real estate, commercial real estate and accounts receivable If the decrease in value or quantity of collateral makes it insufficient for the actual value of the collateral to meet collateral (pledge) rate, the Group shall freeze the underlying credit program amounts, require the client to provide additional collateral or security deposit or return the corresponding credit lines Master netting arrangements The Group and its counterparties enter into master netting arrangements for derivatives transactions to further reduce credit risk Master netting arrangements may not lead to the offsetting between assets and liabilities on the statement of financial position, because the transactions are usually settled on a gross basis However, the credit risk associated with favourable contracts is reduced by a master netting arrangement to the extent that if a default occurs, all amounts are terminated and settled on a net basis The financial derivatives are mainly settled in accordance with the provisions of the International Swaps and Derivatives Association and the features of the products, using, in principle, the method that involves the lowest settlement risk CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 235 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (a) Credit risk (Continued) (III) Credit risk mitigation measures (Continued) Impairment and provisioning policies (Continued) (3) Definition of “default” and “credit-impaired assets” When a financial asset is impaired, the Group identifies the financial asset as a default Generally speaking, if the financial asset is overdue for more than 90 days, it is considered as a default At each date of the statement of financial position, the Group assesses whether financial assets carried at amortised cost and debt instruments at FVTOCI are credit-impaired A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred Evidence that a financial asset is credit- impaired includes the following observable data: – significant financial difficulty of the borrower or issuer; – a breach of contract, such as a default or delinquency in interest or principal payments; – for economic or contractual reasons relating to the borrower’s financial difficulty, the Group having granted to the borrower a concession that would not otherwise consider; – it is becoming probable that the borrower will enter into bankruptcy or other financial reorganisation; – the disappearance of an active market for that financial asset because of financial difficulties; – purchase or source a financial asset at significant discount, which reflects that the financial asset is credit-impaired; or – overdue more than 90 days The above criteria apply to all financial assets of the Group and they are consistent with the definition of “default” adopted by the internal management of credit risk CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 237 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (a) Credit risk (Continued) (III) Credit risk mitigation measures (Continued) Impairment and provisioning policies (Continued) (4) Measurement of ECLs (Continued) The Group determines the 12-month loss given default (LGD) and lifetime LGD based on the factors that affects post-default recovery LGD for different product types are different As to financial assets classified as guarantees, the Group determines the loss given default (LGD) according to the types of collaterals and their expected value, the discount rate at the compulsory sale, the recovery time and the estimated recovery cost As to credit-based financial assets, the Group usually determines loss given default (LGD) at the product level due to the limited differences in recoverable amounts from different borrowers Forward-looking economic information should be considered when determining the 12-month and lifetime probability of default, EAD and loss given default The Group quarterly monitors and reviews assumptions related to the calculation of ECLs, including the changes in PD and the value of collaterals under the different time limits Forward-looking information included in the ECL model is as follows: The calculation of ECLs involves forward-looking information After the historical analysis, the Group identified the key economic indicators related to ECL, such as gross domestic product (GDP), consumer price index (CPI), Broad money supply (M2), and Industrial Added Value The Group carried out regression analysis to determine the relationship between these economic indicators and PD as well as LGD, so as to ascertain the impact of historical changes in these indicators on PD and LGD The Group forecasts these economic indicators at least annually and provides the best estimates of the economic conditions for the coming year The important macroeconomic assumptions used by the Group in various macroeconomic scenarios include broad money supply, consumer price index, gross domestic product, export amount, Industrial Added Value, price index of second-hand housing in 70 large and medium- sized cities, and Gross Consumption of Social Retail Goods (GCSRG) The Group established measurement models to identify the three risk weights, ie optimistic, neutral and pessimistic As of 31 December 2024, the Group’s optimistic scenario weight is 20%, neutral scenario weight is 60%, and pessimistic scenario weight is 20%, both of which are consistent with 2023 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 239 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (a) Credit risk (Continued) (ii) Financial assets (excluding interests accrued) analysed by credit quality 31 December 2024 Gross carrying amount Allowances for ECLs Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Financial assets measured at amortised cost Deposits with the central bank 147,663,155 – – 147,663,155 – – – – Deposits with banks and other financial institutions 11,429,811 – – 11,429,811 (31,088) – – (31,088) Placements with banks and other financial institutions 4,631,331 – 200,000 4,831,331 (8,486) – (60,000) (68,486) Financial assets purchased under resale agreements 18,528,614 – – 18,528,614 (2,543) – – (2,543) Loans and advances to customers 773,198,893 45,308,985 18,414,483 836,922,361 (6,080,413) (5,156,951) (13,006,758) (24,244,122) Financial investments 293,505,980 7,093,538 33,627,996 334,227,514 (1,412,263) (609,943) (6,449,012) (8,471,218) Other assets 3,945,472 1,071,141 1,860,749 6,877,362 (265,080) (109,874) (584,384) (959,338) Total 1,252,903,256 53,473,664 54,103,228 1,360,480,148 (7,799,873) (5,876,768) (20,100,154) (33,776,795) Financial assets at FVTOCI Loans and advances to customers 62,687,359 – – 62,687,359 (36,455) – (1,293,763) (1,330,218) Financial investments 175,536,412 – – 175,536,412 (348,107) – (10,000) (358,107) Total 238,223,771 – – 238,223,771 (384,562) – (1,303,763) (1,688,325) Credit commitments 402,239,294 19,303 3,594 402,262,191 (464,456) (708) (1,797) (466,961) CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 241 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (a) Credit risk (Continued) (iii) Restructured loans and advances to customers Restructured loans refer to those loans that relevant borrowers are not capable of repaying due to financial difficulties and therefore certain clauses on the loan contract are adjusted as stipulated in the Measures for the Risk Classification of Financial Assets of Commercial Bank As at 31 December 2024 and 2023, the Group’s restructured loans amounted to RMB1,621 million and RMB960 million (iv) Credit rating The Group adopts a credit rating approach in managing the credit risk of the debt securities portfolio Debt securities are rated with reference to major rating agencies where the issuers of the securities are located The carrying amounts of debt securities investments (excluding interests accrued) analysed by the rating agency designations as at 31 December 2024 and 2023 are as follows: 31 December 2024 2023 Neither overdue nor impaired Ratings – AAA 334,641,811 337,282,252 – AA- to AA+ 94,734,342 42,978,556 Sub-total 429,376,153 380,260,808 Unrated 450,545 9,777,988 Total 429,826,698 390,038,796 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 243 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (b) Market risk (including the interest rate risk in the banking book) (Continued) Trading book market risk (Continued) Stress testing Stress testing is used to assess the loss sustainability under extremely adverse conditions when significant market changes take place, including the extreme fluctuations of market risk elements, such as interest rates and exchange rates, unexpected political or economic events, or a combination of the above situations The market risk of the Group goes through stress testing on a regular basis Assessment of fair value Assessment of the fair value of financial instruments is based on the quantitative analysis of the financial products that takes into consideration the specific characteristics of the financial products, market situation of trading strategy, risk factors and the quality and qualification of counterparties The Group assesses the fair value of its financial instruments on a regular basis Interest rate risk of banking book Interest rate risk of the banking book is measured and managed mainly through gap management, sensitivity analysis and duration analysis to ensure the interest rate risk of the banking book are controlled within the scope set by the risk appetite The Group calculates the interest rate sensitivity gap based on repricing cash flow of the interest-earning assets and interest-bearing liabilities, and conducts scenario analysis, to assess the impact on the Group of changes in interest rates The impact on the market value of assets or liabilities of one basis point movement in interest rate was assessed through calculation of Basis Point Value Interest rate risk of the Group’s banking book goes through stress testing on a regular basis In such stress testing, basic interest rate and market rate is treated as a prime factor, and other factors such as political and economic contingency or several contingencies happened at the same time are included Interest rate risk The Group operates its business predominantly in Chinese mainland under the interest rate scheme regulated by PBOC The Group manages its interest rate risks through gap analysis, duration analysis and sensitivity analysis of its assets and liabilities The Group has set limits to the rate gap, duration and interest rate sensitivity, and monitors regularly to ensure that the exposures are within the Group’s limit CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 245 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (b) Market risk (including the interest rate risk in the banking book) (Continued) Interest rate risk (Continued) (i) (Continued) 31 December 2023 Non- interest- Within Three months One year to More than Total bearing three months to one year five years five years Assets Cash and deposits with the central bank 103,494,179 395,350 103,098,829 – – – Deposits with banks and other financial institutions 20,938,491 5,372 20,933,119 – – – Placements with banks and other financial institutions 12,353,608 236,648 6,482,333 5,634,627 – – Derivative financial assets 1,551,181 1,551,181 – – – – Financial assets purchased under resale agreements 6,532,553 1,337 6,531,216 – – – Loans and advances to customers (Note (i)) 920,394,849 12,350,216 435,271,170 332,900,018 126,735,034 13,138,411 Financial investments (Note (ii)) 633,136,792 47,268,063 152,655,270 86,187,696 288,718,119 58,307,644 Others 34,332,183 34,332,183 – – – – Total assets 1,732,733,836 96,140,350 724,971,937 424,722,341 415,453,153 71,446,055 Liabilities Borrowings from the central bank 133,787,964 1,769,964 50,662,000 81,356,000 – – Deposits from banks and other financial Institutions 158,762,222 1,184,275 79,878,884 77,699,063 – – Placements from banks and other financial institutions 34,920,012 614,719 11,308,915 21,981,879 1,014,499 – Derivative financial liabilities 990,612 990,612 – – – – Financial assets sold under repurchase agreements 66,634,253 22,725 65,982,834 628,694 – – Deposits from customers 934,593,879 19,477,362 436,835,191 227,027,687 250,587,639 666,000 Debt securities issued 267,923,368 1,594,678 95,572,763 116,784,488 53,971,439 – Others 20,718,825 16,603,237 337,044 728,372 2,316,260 733,912 Total liabilities 1,618,331,135 42,257,572 740,577,631 526,206,183 307,889,837 1,399,912 Asset-liability gap 114,402,701 53,882,778 (15,605,694) (101,483,842) 107,563,316 70,046,143 Notes: (i) As at 31 December 2024 and 2023, for loans and advances to customers, the category “Within three months” includes overdue amounts (net of allowances for impairment losses) of RMB13,626 million and RMB15,904 million, respectively (ii) Financial investments include financial investments measured at FVTPL, financial investments measured at FVTOCI and financial investments measured at amortised cost CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 247 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (b) Market risk (including the interest rate risk in the banking book) (Continued) Foreign exchange risk Foreign exchange risk refers to the risk of losses arising from the negative changes in the rate of exchange The Group conducts the majority of its business in RMB, with certain foreign transactions in United States dollars (“USD”), Hong Kong dollars (“HKD”) and, to a much lesser extent, other currencies The Group’s principle in controlling foreign exchange risk is to match its assets and liabilities by currency and to maintain foreign exchange risk within established limits The Group has set foreign exchange risk limits which are consistent with the guidelines established by the Asset and Liability Management Committee of the Group and are in accordance with relevant regulatory requirements and the management’s assessment of current circumstances The Group also manages its sources and uses of foreign currencies to minimise potential mismatches The Group monitors and controls the foreign exchange risk through the limit management, and mainly uses the foreign exchange exposure analysis, scenario analysis and stress testing to measure and analyse the foreign exchange risk Besides, the Group monitors and controls the foreign exchange risk through the limit management The Asset and Liability Management Department’s market risk team performs independent monitoring, reporting, and management for the entire Group’s foreign exchange risk Meanwhile, the Group managed the on-balance sheet and off-balance sheet foreign exchange risk exposures through derivative financial instruments such as foreign exchange swaps and foreign exchange forwards, and kept the Group’s total exposures of on-balance sheet and off-balance sheet to a low level Therefore, the foreign exchange exposure at the end of the period is not sensitive to exchange rate fluctuations, and the potential impact on the Group’s net profit and shareholders’ equity is not significant The following tables summarise the Group’s exchange risk of assets and liabilities at reporting date Included in the tables are the carrying value of assets and liabilities, and the off-balance sheet credit commitments in RMB equivalent, categorised by the original currency CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 249 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (b) Market risk (including the interest rate risk in the banking book) (Continued) Foreign exchange risk (Continued) 31 December 2023 USD (In RMB Others (In RMB Total (In RMB RMB equivalent) equivalent) equivalent) Assets Cash and deposits with the central bank 100,279,850 1,596,658 1,617,671 103,494,179 Deposits with banks and other financial institutions 10,067,289 9,809,904 1,061,298 20,938,491 Placements with banks and other financial institutions 12,353,608 – – 12,353,608 Derivative financial assets 1,545,023 – 6,158 1,551,181 Financial assets purchased under resale agreements 6,532,553 – – 6,532,553 Loans and advances to customers 868,500,425 45,022,098 6,872,326 920,394,849 Financial investments (Note (i)) 590,805,816 38,445,447 3,885,529 633,136,792 Others 29,284,639 146,819 4,900,725 34,332,183 Total assets 1,619,369,203 95,020,926 18,343,707 1,732,733,836 Liabilities Borrowings from the central bank 133,787,964 – – 133,787,964 Deposits from banks and other financial institutions 154,081,335 3,905,520 775,367 158,762,222 Placements from banks and other financial institutions 3,147,188 24,808,071 6,964,753 34,920,012 Derivative financial liabilities 989,487 – 1,125 990,612 Financial assets sold under repurchase agreements 66,634,253 – – 66,634,253 Deposits from customers 895,002,140 37,196,762 2,394,977 934,593,879 Debt securities issued 264,536,738 3,386,630 – 267,923,368 Others 17,656,513 1,001,747 2,060,565 20,718,825 Total liabilities 1,535,835,618 70,298,730 12,196,787 1,618,331,135 Net position 83,533,585 24,722,196 6,146,920 114,402,701 Off-balance sheet credit commitments 309,997,319 15,168,149 2,668,420 327,833,888 (i) Financial investments include financial investments measured at FVTPL, financial investments measured at FVTOCI and financial investments measured at amortised cost CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 251 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (c) Liquidity risk (Continued) The Group’s overall objective in liquidity risk management is to meet funding obligations across all business lines, ensure compliance with liquidity regulatory index, and minimise additional costs related to liquidity – including opportunity costs of reserve funds, market funding premiums, and asset liquidation losses – through prudent management of asset-liability structure and future cash flows The Group focuses on the adjustment and optimisation of asset structure It has established a three-tier liquidity reserve system based on cash, reserves and highly liquid assets such as interest-rate bonds, monetary funds, and bond funds, which can effectively respond to liquidity risk management needs in day-to-day scenarios and contingencies, and satisfy all payment needs In addition, the Group continues to expand its various debt channels, actively strengthens the degree of participation in the issuance of financial bonds, inter-bank customer relationship management, and open market operations of the PBOC, expands interbank credit, builds up emergency fund reserves, attempts to expand the Group’s medium and long-term stable sources of liabilities, so as to improve the Group’s financing ability under high liquidity pressure In order to cope with its potential impact arising from fluctuation of capital market and changes of macro- economic environment, the Group modifies stress testing scenarios and performs liquidity risk stress tests on a regular basis, including the test of cash flow gaps in the future 7 days, 30 days and 90 days and implementation of shortest lifetime management of the Group by introducing the internal and external factors to test the tolerance of liquidity risks under different stress scenarios through stimulation of decline in the price of marketable securities and outflow of deposits Also, the Group monitors early-warning indicators daily, in consideration of its business size, complexity, level of risk and organisational structure, the Group has emergency plans in place and explicit internal labour division and emergency procedures, and organises involved departments of head office and branches to launch crisis response exercises to ensure its liquidity under a crisis situation CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 253 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (c) Liquidity risk (Continued) Maturity date analysis (Continued) 31 December 2023 Between one Between three Between Repayable Within one month and months and one year More than Indefinite on demand month three months one year and five years five years Total Note (i) Assets Cash and deposits with the central bank (Note (i)) 63,373,799 40,120,380 – – – – – 103,494,179 Deposits with banks and other financial institutions – 20,738,491 – 200,000 – – – 20,938,491 Placements with banks and other financial institutions 140,000 – 2,235,300 4,195,405 5,782,903 – – 12,353,608 Financial assets purchased under resale agreements – – 6,532,553 – – – – 6,532,553 Loans and advances to customers 12,562,552 7,488,374 109,568,892 94,609,323 230,433,255 261,280,358 204,452,095 920,394,849 Financial investments (Note (ii)) 24,796,351 31,707,447 68,081,384 28,720,906 107,807,306 300,106,168 71,917,230 633,136,792 Others 29,675,493 4,656,690 – – – – – 34,332,183 Total assets 130,548,195 104,711,382 186,418,129 127,725,634 344,023,464 561,386,526 276,369,325 1,731,182,655 Liabilities Borrowings from the central bank – – 20,534,723 31,373,494 81,879,747 – – 133,787,964 Deposits from banks and other financial Institutions – 38,428,688 9,471,720 32,469,960 78,391,854 – – 158,762,222 Placements from banks and other financial institutions – – 5,285,750 6,323,625 22,289,266 1,021,371 – 34,920,012 Financial assets sold under repurchase agreements – – 64,931,118 1,073,873 629,262 – – 66,634,253 Deposits from customers – 253,687,499 92,899,008 95,250,583 232,349,494 259,724,377 682,918 934,593,879 Debt securities issued – – 27,267,591 68,311,386 117,414,077 54,930,314 – 267,923,368 Others 16,603,237 – 1,415 335,629 728,372 2,316,260 733,912 20,718,825 Total liabilities 16,603,237 292,116,187 220,391,325 235,138,550 533,682,072 317,992,322 1,416,830 1,617,340,523 Net position 113,944,958 (187,404,805) (33,973,196) (107,412,916) (189,658,608) 243,394,204 274,952,495 113,842,132 Notes: (i) Indefinite amount of cash and deposits with the central bank represents the statutory deposit reserves and fiscal deposits with the central bank Indefinite amount of loans and advances to customers includes all the impaired loans and advances, as well as those overdue more than one month Indefinite amount of financial investments represents impaired investments or those overdue more than one month Equity investments are listed in the category of indefinite Loans and advances to customers and financial investments with no impairment but overdue within one month are classified into the category of repayable on demand (ii) Financial investments include financial investments measured at FVTPL, financial investments measured at FVTOCI, financial investments measured at amortised cost CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 255 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (c) Liquidity risk (Continued) Analysis on contractual undiscounted cash flows of non-derivative financial liabilities (Continued) 31 December 2023 Contractual Between one Between three Between one Carrying undiscounted Repayable Within month and months and year and More than amount cash flow Indefinite on demand one month three months one year five years five years Non-derivative financial liabilities Borrowings from the central bank 133,787,964 135,496,332 – – 20,559,167 31,513,676 83,423,489 – – Deposits from banks and other financial institutions 158,762,222 160,484,484 – 38,428,688 9,484,380 32,620,620 79,950,796 – – Placements from banks and other financial institutions 34,920,012 35,714,495 – – 5,302,279 6,368,358 22,994,035 1,049,823 – Financial assets sold under repurchase agreements 66,634,253 67,488,797 – – 65,778,063 1,077,630 633,104 – – Deposits from customers 934,593,879 948,634,672 – 253,687,499 92,950,882 95,528,188 235,143,434 270,439,008 885,661 Debt securities issued 267,923,368 275,181,748 – – 27,312,630 68,615,205 118,879,392 60,374,521 – Others 20,069,373 20,508,385 15,953,785 – 1,415 336,545 744,529 2,552,357 919,754 Total non-derivative financial liabilities 1,616,691,071 1,643,508,913 15,953,785 292,116,187 221,388,816 236,060,222 541,768,779 334,415,709 1,805,415 Credit commitments 327,833,888 327,833,888 – 20,322,293 52,489,815 72,256,766 167,712,210 15,052,175 629 This analysis on contractual undiscounted cash flows of non-derivative financial liabilities might diverge from actual results CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 257 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 49 FINANCIAL RISK MANAGEMENT (Continued) (c) Liquidity risk (Continued) Analysis on contractual undiscounted cash flow of derivative financial instruments (Continued) 31 December 2023 Within One month to Three months One year to one month three months to one year five years Total Derivative financial instruments settled on a net basis Interest rate swaps 380 7,175 907 1,905 10,367 Precious metal swaps – 108,711 109,482 – 218,193 Interest rate option contracts – – 18 – 18 Derivative financial instruments settled on a gross basis Exchange rate swaps – Cash inflow 32,395,814 22,004,892 28,250,283 1,356,741 84,007,730 – Cash outflow (32,195,520) (22,034,506) (28,439,457) (1,299,605) (83,969,088) Exchange rate forwards – Cash inflow 1,938,088 816,524 19,144,994 20,597,991 42,497,597 – Cash outflow (1,937,002) (814,855) (19,110,456) (20,536,211) (42,398,524) Foreign exchange option contracts – Cash inflow – 556,566 – – 556,566 – Cash outflow – (556,566) – – (556,566) CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 259 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 50 FAIR VALUE (Continued) (a) Methods and assumptions for determination of fair value (Continued) (iv) Derivatives Derivatives valued using a valuation technique with market observable inputs are mainly interest rate swaps, currency forwards, swaps and options, etc The most frequently applied valuation techniques include discounted cash flow model and the Garman Kohlhagen model extended from Black Scholes model The models incorporate various inputs including foreign exchange spot and forward rates, foreign exchange rate volatility, and interest rate yield curves (b) Fair value measurement (i) Financial assets The Group’s financial assets mainly consist of cash and deposits with the central bank, deposits with banks and other financial institutions, placements with banks and other financial institutions, derivative financial assets, financial assets purchased under resale agreements, loans and advances to customers, and financial investments Deposits with the central bank, deposits with banks and other financial institutions, placements with banks and other financial institutions and financial assets purchased under resale agreements are mostly carried interest at market interest rates and due within one year Accordingly, the carrying amounts approximate the fair values Loans and advances to customers are mostly priced at floating rates close to the LPR rates Accordingly, the carrying amounts approximate the fair values Derivative financial assets, financial investments measured at FVTOCI and financial investments measured at FVTPL are presented at fair value Financial investments measured at amortised cost are the approximations of their fair values because, for example, they are short-term or repriced at current market rates frequently (ii) Financial liabilities The Group’s financial liabilities mainly include deposits from banks and other financial institutions, financial liabilities at FVTPL, placements from banks and other financial institutions, derivative financial liabilities, financial assets sold under repurchase agreements, deposits from customers and debt securities issued Derivative financial liabilities are presented at fair value The fair value of debt securities issued are disclosed in Note 50 (c) The carrying amounts of other financial liabilities approximate their fair value CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 261 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 50 FAIR VALUE (Continued) (c) Fair value hierarchy (Continued) 31 December 2024 Level 1 Level 2 Level 3 Total Continuously measured at fair value Assets Derivative financial assets – 2,448,184 – 2,448,184 Loans and advances to customers at FVTPL – Corporate loans and advances – 36,880,971 – 36,880,971 Loans and advances to customers at FVTOCI – Corporate loans and advances – 2,959,772 – 2,959,772 – Discounted bills – 59,727,587 – 59,727,587 Financial investments measured at FVTPL – Bonds – 19,686,166 450,545 20,136,711 – Interbank certificates of deposits – 10,222,539 – 10,222,539 – Fund investments – 70,852,301 – 70,852,301 – Trust plans and asset management plans – 74,182,672 13,382,001 87,564,673 – Equity investments 500,699 204,849 3,383,219 4,088,767 Financial investments measured at FVTOCI – Bonds (excluding interests accrued) – 173,915,492 – 173,915,492 – Interbank certificates of deposits (excluding interests accrued) – 1,620,920 – 1,620,920 – Equity investments – – 200,026 200,026 Total 500,699 452,701,453 17,415,791 470,617,943 Liabilities Derivative financial liabilities – (1,799,883) – (1,799,883) Financial liabilities at FVTPL – (171,916) – (171,916) Total – (1,971,799) – (1,971,799) Not measured at fair value Liabilities Debt securities issued – (289,531,894) – (289,531,894) Total – (289,531,894) – (289,531,894) CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 263 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) CHINA BOHAI BANK CO, LTD 50 FAIR VALUE (Continued) (c) Fair value hierarchy (Continued) Movements during the year ended 31 December 2024 in the balance of Level 3 fair value hierarchy are as follows: Unrealised gains or losses for the year included in profit Transfer or loss for assets 1 January Transfer into out of Total gains or losses 31 December held at the 2024 Level 3 Level 3 for the year Additions, issues, sales and settlements 2024 end of the year Included in other Included in comprehensive profit or loss income Additions Issues Sales Settlements Assets Financial assets at FVTPL – Bonds 715,619 – – (265,074) – – – – – 450,545 (265,074) – Trust plans and asset management plans 13,063,378 – – 80,172 – 250,682 – – (12,231) 13,382,001 80,172 – Equity investments 3,366,940 – – 16,279 – – – – – 3,383,219 16,279 Sub-total 17,145,937 – – (168,623) – 250,682 – – (12,231) 17,215,765 (168,623) Financial investments measured at FVTOCI – Equity investments 3,262,738 – – – – 26 – (3,062,738) – 200,026 – Total 20,408,675 – – (168,623) – 250,708 – (3,062,738) (12,231) 17,415,791 (168,623) Annual Report 2024 Audit Report and Financial Report 265 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 50 FAIR VALUE (Continued) (c) Fair value hierarchy (Continued) The valuation techniques used for the Group’s financial instruments at fair value in Level 3 are the discounted cash flow method and the net asset value method, using unobservable inputs such as risk-adjusted discount rate, cash flows, net assets and liquidity discount, respectively For the years ended 31 December 2024 and 31 December 2023, there were no significant changes in the valuation techniques or significant transfers of financial instruments between levels 51 ENTRUSTED LENDING BUSINESS The Group provides entrusted lending business services to customers All entrusted loans are funded by entrusted funds from these customers The Group does not take any credit risk in relation to these transactions The Group acts as an agent to hold and manage these assets and liabilities at the direction of the entruster and receives fee income for the services provided The entrusted assets are not the assets of the Group and are not recognised in the statements of financial position Surplus funding is accounted for as deposits from customers 31 December 2024 2023 Entrusted loans 26,773,799 25,528,949 Entrusted loan funds 26,773,799 25,528,949 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 267 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 52 COMMITMENTS AND CONTINGENT LIABILITIES (Continued) (b) Credit risk-weighted amount for credit commitments 31 December 2024 2023 Credit risk-weighted amount 89,201,282 68,502,384 The amount of risk-weighted assets for credit commitments at the end of December 2024 is calculated in accordance with the Administrative Measures for the Capital of Commercial Banks issued by the NFRA (c) Capital commitments As at 31 December 2024 and 2023, the Group’s authorised capital commitments are as follows: 31 December 2024 2023 Contracted but not paid for 282,702 539,983 Authorised but not contracted for 34,253 92,697 Total 316,955 632,680 (d) Outstanding litigations and disputes As at 31 December 2024 and 2023, the Group has several outstanding litigations and disputes in its normal business operations Provision for litigation losses is estimated based on the court process and the opinion of the external legal counsel After consulting with external professional legal counsel, management believes that the final outcome of such legal proceedings and claims will not have a material impact on the financial position or operating results of the Group During the year ended 31 December 2021, the Group had a dispute with individual corporate customers over the business of bank acceptance bills pledged by certificates of deposit The Group had reported the case to the policy department During the year ended 31 December 2022, the Group filed a related lawsuit to the court As of the approval date of the Group’s financial statements, the case was in the judicial process The outcome of the case is subject to the judgement of the court, and the Group is of the view that the financial impact of the above dispute cannot be reliably estimated As a result, no relevant accrued liabilities were recognised as at 31 December 2024 and 2023 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 269 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 53 STATEMENTS OF FINANCIAL POSITION AND STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY OF THE BANK (Continued) (a) Statements of financial position of the Bank (Continued) 31 December 2024 2023 Liabilities and equity Liabilities Borrowings from the central bank 121,378,473 133,787,964 Deposits from banks and other financial institutions 150,621,717 159,002,675 Placements from banks and other financial institutions 23,144,745 34,920,012 Financial liabilities at FVTPL 171,916 – Derivative financial liabilities 1,799,883 990,612 Financial assets sold under repurchase agreements 57,818,338 66,634,253 Deposits from customers 1,067,561,795 934,593,879 Income tax payable (634,618) 808,026 Debt securities issued 290,863,182 267,923,368 Lease liabilities 3,699,357 4,070,191 Other liabilities 17,234,045 15,699,800 Total liabilities 1,733,658,833 1,618,430,780 Equity Share capital 17,762,000 17,762,000 Other equity instruments 11,000,000 19,961,604 Capital reserve 10,689,841 10,732,077 Surplus reserve 7,929,133 7,828,688 General reserve 21,038,180 20,632,499 Other reserves 1,732,924 (2,718,089) Retained profits 39,534,650 39,986,330 Total equity 109,686,728 114,185,109 Total liabilities and equity 1,843,345,561 1,732,615,889 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 271 Notes to the Consolidated Financial Statements For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 53 STATEMENTS OF FINANCIAL POSITION AND STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY OF THE BANK (Continued) (b) Statement of Changes in Shareholders’ Equity of the Bank (Continued) Other Share equity Capital Surplus General Other Retained Notes capital instruments reserve reserve reserve reserves profits Total Balance at 1 January 2023 17,762,000 19,961,604 10,732,077 7,340,422 20,245,453 (3,038,853) 36,928,990 109,931,693 Net profit – – – – – – 4,882,652 4,882,652 Other comprehensive income – – – – – 320,764 – 320,764 Sub-total of comprehensive income – – – – – 320,764 4,882,652 5,203,416 Appropriation to surplus reserve 41 – – – 488,266 – – (488,266) – Appropriation to general reserve 41 – – – – 387,046 – (387,046) – Distribution to holders of other equity instruments 42 – – – – – – (950,000) (950,000) Balance at 31 December 2023 17,762,000 19,961,604 10,732,077 7,828,688 20,632,499 (2,718,089) 39,986,330 114,185,109 54 SUBSEQUENT EVENT On February 26, 2025, the Group issued green financial bonds with a face value of RMB5 billion, a term of 3 years and a fixed coupon rate of 189% per annum Except for the above, the Group had no other material events for disclosure subsequent to 31 December 2024 and up to the date of approval of this report CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 273 Unaudited Supplementary Financial Information For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 1 LIQUIDITY COVERAGE RATIO AND LEVERAGE RATIO (Continued) (c) Net Stable Funding 31 December 2024 2023 Available stable funding 1,073,032,883 942,723,127 Required stable funding 932,440,310 933,067,515 Net Stable Funding Ratio 11508% 10103% Pursuant to the Administrative Measures for Liquidity Risk Management of Commercial Banks, a minimum net stable funding ratio 100% is required The above liquidity coverage ratio, leverage ratio and net stable funding ratio are calculated in accordance with the formula promulgated by the former CBRC and based on the financial information prepared in accordance with China Accounting Standards 2 CURRENCY CONCENTRATIONS 31 December 2024 USD (RMB HKD (RMB Others (RMB equivalent) equivalent) equivalent) Total Spot assets 80,229,173 7,730,774 9,384,230 97,344,177 Spot liabilities (54,426,162) (4,491,442) (7,571,879) (66,489,483) Net position 25,803,011 3,239,332 1,812,351 30,854,694 31 December 2023 USD (RMB HKD (RMB Others (RMB equivalent) equivalent) equivalent) Total Spot assets 95,020,926 5,085,455 13,258,252 113,364,633 Spot liabilities (70,298,730) (3,676,029) (8,520,758) (82,495,517) Net position 24,722,196 1,409,426 4,737,494 30,869,116 CHINA BOHAI BANK CO, LTD Annual Report 2024 Audit Report and Financial Report 275 Unaudited Supplementary Financial Information For the year ended 31 December 2024 (Expressed in thousands of Renminbi, unless otherwise stated) 4 GROSS AMOUNT OF OVERDUE LOANS AND ADVANCES 31 December 2024 2023 Gross loans and advances which have been overdue with respect to either principal or interest for periods of – between 3 and 6 months (inclusive) 2,532,594 2,755,065 – between 6 months and 1 year (inclusive) 3,562,921 2,700,061 – between 1 year and 3 years (inclusive) 6,374,601 7,750,545 – over 3 years 2,772,773 2,624,251 Total 15,242,889 15,829,922 As a percentage of gross loans and advances – between 3 and 6 months (inclusive) 027% 030% – between 6 months and 1 year (inclusive) 038% 029% – between 1 year and 3 years (inclusive) 068% 083% – over 3 years 030% 028% Total 163% 170% CHINA BOHAI BANK CO, LTD

RESULTS ANNUAL ANNOUNCEMENT

2025-03-26 21:25:50

Announcements & Notices

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement CHINA BOHAI BANK CO, LTD 渤海銀行股份有限公司 (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 9668) NOTICE OF BOARD MEETING The board of directors (the “Board”) of CHINA BOHAI BANK CO, LTD (the “Bank”) hereby announces that a meeting of the Board will be held on Wednesday, March 26, 2025 for the purpose of, among other matters, considering and approving the annual results of the Bank and its subsidiary for the year ended December 31, 2024 and its publication and considering the recommendation on payment of a final dividend, if any By order of the Board CHINA BOHAI BANK CO, LTD WANG Jinhong Chairman Tianjin, China March 14, 2025 As of the date of this announcement, the Board of the Bank comprises Mr WANG Jinhong and Mr QU Hongzhi as executive directors; Mr AU Siu Luen, Ms YUAN Wei, Mr DUAN Wenwu, Mr HU Aimin and Mr ZHANG Yunji as non-executive directors; and Mr TSE Yat Hong, Mr SHUM Siu Hung Patrick, Ms WANG Aijian, Mr LIU Junmin and Mr LIU Lanbiao as independent non-executive directors

NOTICE OF MEETING BOARD

2025-03-14 17:44:14

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Announcements & Notices

FF301 Monthly Return for Equity Issuer and Hong Kong Depositary Receipts listed under Chapter 19B of the Exchange Listing Rules on Movements in Securities For the month ended: 28 February 2025 Status: New Submission To : Hong Kong Exchanges and Clearing Limited Name of Issuer: CHINA BOHAI BANK CO, LTD Date Submitted: 04 March 2025 I Movements in Authorised / Registered Share Capital 1 Class of shares Ordinary shares Type of shares H Listed on the Exchange (Note 1) Yes Stock code (if listed) 09668 Description Number of authorised/registered shares Par value Authorised/registered share capital Balance at close of preceding month 6,200,555,000 RMB 1 RMB 6,200,555,000 Increase / decrease (-) 0 RMB 0 Balance at close of the month 6,200,555,000 RMB 1 RMB 6,200,555,000 2 Class of shares Other class (specify in description) Type of shares Other type (specify in description) Listed on the Exchange (Note 1) No Stock code (if listed) - Description Domestic Shares Number of authorised/registered shares Par value Authorised/registered share capital Balance at close of preceding month 11,561,445,000 RMB 1 RMB 11,561,445,000 Increase / decrease (-) 0 RMB 0 Balance at close of the month 11,561,445,000 RMB 1 RMB 11,561,445,000 Total authorised/registered share capital at the end of the month: RMB 17,762,000,000 Page 1 of 10 v 111 FF301 II Movements in Issued Shares and/or Treasury Shares 1 Class of shares Ordinary shares Type of shares H Listed on the Exchange (Note 1) Yes Stock code (if listed) 09668 Description Number of issued shares (excluding treasury shares) Number of treasury shares Total number of issued shares Balance at close of preceding month 6,200,555,000 0 6,200,555,000 Increase / decrease (-) 0 0 Balance at close of the month 6,200,555,000 0 6,200,555,000 2 Class of shares Ordinary shares Type of shares Other type(specify in description) Listed on the Exchange (Note 1) No Stock code (if listed) - Description Domestic Shares Number of issued shares (excluding treasury shares) Number of treasury shares Total number of issued shares Balance at close of preceding month 11,561,445,000 0 11,561,445,000 Increase / decrease (-) 0 0 Balance at close of the month 11,561,445,000 0 11,561,445,000 Page 2 of 10 v 111 FF301 III Details of Movements in Issued Shares and/or Treasury Shares (A) Share Options (under Share Option Schemes of the Issuer) Not applicable Page 3 of 10 v 111 FF301 (B) Warrants to Issue Shares of the Issuer Not applicable Page 4 of 10 v 111 FF301 (C) Convertibles (ie Convertible into Shares of the Issuer) Not applicable Page 5 of 10 v 111 FF301 (D) Any other Agreements or Arrangements to Issue Shares of the Issuer, including Options (other than Share Option Schemes) Not applicable Page 6 of 10 v 111 FF301 (E) Other Movements in Issued Shares and/or Treasury Shares Not applicable Page 7 of 10 v 111 FF301 IV Information about Hong Kong Depositary Receipt (HDR) Not applicable Page 8 of 10 v 111 FF301 V Confirmations Not applicable Submitted by: DU Gang Title: Joint Company Secretary (Director, Secretary or other Duly Authorised Officer) Page 9 of 10 v 111 FF301 Notes 1 The Exchange refers to The Stock Exchange of Hong Kong Limited 2 In the case of repurchase of shares (shares repurchased and cancelled) and redemption of shares (shares redeemed and cancelled), "date of event" should be construed as "cancellation date" In the case of repurchase of shares (shares held as treasury shares), "date of event" should be construed as "date on which shares were repurchased and held by the issuer in treasury" 3 The information is required in the case of repurchase of shares (shares repurchased for cancellation but not yet cancelled) and redemption of shares (shares redeemed but not yet cancelled) Please state the number of shares repurchased or redeemed during the month or in preceding month(s) but pending cancellation as at close of the month as a negative number 4 Items (i) to (viii) are suggested forms of confirmation The listed issuer may amend the item(s) that is/are not applicable to meet individual cases Where the issuer has already made the relevant confirmations in a return published under Main Board Rule 1325A / GEM Rule 1727A in relation to the securities issued, or the treasury shares sold or transferred, no further confirmation is required to be made in this return 5 “Identical” means in this context: ． the securities are of the same nominal value with the same amount called up or paid up; ． they are entitled to dividend/interest at the same rate and for the same period, so that at the next ensuing distribution, the dividend/interest payable per unit will amount to exactly the same sum (gross and net); and ． they carry the same rights as to unrestricted transfer, attendance and voting at meetings and rank pari passu in all other respects Page 10 of 10 v 111

ISSUER FOR SECURITIES ON IN

2025-03-04 18:54:53

Announcements & Notices

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement CHINA BOHAI BANK CO, LTD 渤海銀行股份有限公司 (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 9668) ANNOUNCEMENT ON COMPLETION OF ISSUE OF GREEN FINANCIAL BONDS The board of directors (the “Board”) of CHINA BOHAI BANK CO, LTD (the “Bank”) is pleased to announce that, as considered and approved at the 2024 first extraordinary general meeting of the Bank and approved by the People’s Bank of China, the Bank issued the “CHINA BOHAI BANK CO, LTD 2025 Green Financial Bonds (Tranche 1)” (the “Bonds”) in China national inter-bank bond market The bookkeeping of the Bonds was filed on February 26, 2025, and the Bonds have accrued interest with effect from February 28, 2025 The total issue size of the Bonds is RMB5 billion The Bonds are three-year fixed rate bonds with a coupon rate of 189% The proceeds from the issue of the Bonds will be, according to applicable laws and regulatory approvals, used for green industrial projects specified in the Green Bond Endorsed Projects Catalogue (2021 Edition) By order of the Board CHINA BOHAI BANK CO, LTD WANG Jinhong Chairman Tianjin, China February 28, 2025 As of the date of this announcement, the Board of the Bank comprises Mr WANG Jinhong and Mr QU Hongzhi as executive directors; Mr AU Siu Luen, Ms YUAN Wei, Mr DUAN Wenwu, Mr HU Aimin and Mr ZHANG Yunji as non-executive directors; and Mr TSE Yat Hong, Mr SHUM Siu Hung Patrick, Ms WANG Aijian, Mr LIU Junmin and Mr LIU Lanbiao as independent non- executive directors

ISSUE OF GREEN COMPLETION BONDS

2025-02-28 17:22:15

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