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1、Bank of China LimitedThe print version of the Banks 2023 Annual Report,to be published in April 2024,will supersede this version.Stock Code:3988(Ordinary H-Share)4619(Offshore Preference Share)2023 Annual Report1Bank of China is the bank with the longest continuous operation among Chinese banks.Form

2、ally established in February 1912,the Bank served consecutively as the countrys central bank,international exchange bank and specialised international trade bank.After 1949,drawing on its long history as the state-designated specialised foreign exchange and trade bank,the Bank became responsible for

3、 managing Chinas foreign exchange operations and offering international trade settlement,overseas fund transfer and other non-trade foreign exchange services.Restructured into a wholly state-owned commercial bank in 1994,the Bank provides various financial services,and has developed into a large com

4、mercial bank delivering services in local and foreign currencies and featuring complete business varieties and strong strength.The Bank was listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange in 2006,becoming the first Chinese bank to launch an A-Share and H-Share initial public o

5、ffering and achieve a dual listing in both markets.The Bank is the official banking partner of the Beijing 2008 Summer Olympics and the Beijing 2022 Winter Olympics,thus making it the only bank in China to serve two Olympic Games.In 2011,Bank of China became the first financial institution from an e

6、merging economy to be designated as a Global Systemically Important Bank,a designation it has now maintained for 13 consecutive years.With its growing international status,competitiveness and comprehensive strengths,the Bank has marched forward into the ranks of the worlds large banks.At present,fol

7、lowing the guiding principles of the 20th National Congress of the CPC and the Central Financial Work Conference,the Bank takes serving the real economy as its mission,risk prevention and control as its eternal theme,consolidating and expanding globalised advantages and improving global layout abili

8、ty as its primary task,and improving market competitiveness and serving national strategies as the core key.Proceeding from deepening reform,opening up and innovation,improving governance and operation efficiency,and promoting financial culture with Chinese characteristics,the Bank concentrates on t

9、he five major tasks of promoting technology finance,green finance,inclusive finance,pension finance,and digital finance,and contributes to the building of a strong financial powerhouse through practical and earnest practice.As Chinas most globalised and integrated bank,Bank of China has institutions

10、 across the Chinese mainland as well as 64 countries and regions,and BOCHK and the Macau Branch serve as local note-issuing banks in their respective markets.The Bank has a well-established global service network and an integrated financial service system based on the pillars of its corporate bankin

11、g,personal banking,financial markets and other commercial banking business,which covers investment banking,direct investment,securities,insurance,funds,aircraft leasing,asset management,financial technology,financing leasing and other areas,thus providing its customers with financial solutions featu

12、ring global expertise and all-round services accessible at any point of contact.Introduction2Bank of China embodies a noble sense of commitment and responsibility.Since its establishment 112 years ago,the Bank has steadfastly upheld its historic mission of“promoting social welfare and contributing t

13、o a prosperous nation”.This mission has formed a valuable spiritual legacy that aligns with the financial culture with Chinese characteristics:to remain committed to honesty and trustworthiness,to seek interest without compromising moral principles,to be prudent and cautious in work,to uphold fundam

14、ental principles and break new ground,and to be compliant with law and regulations.On the new journey towards building a modern socialist country in all respects,Bank of China will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and faithfully imp

15、lement the new development philosophy.It will accurately identify the convergence points,focal points,and supporting points for implementing the national policies and plans and achieving its high-quality development.It will serve as the main force in supporting the real economy and as the bedrock fo

16、r maintaining financial stability.It will unswervingly follow the path of financial development with Chinese characteristics,continue to open new grounds for its high-quality development,and make greater contributions to the comprehensive advancement of building a stronger country and the great caus

17、e of national rejuvenation with Chinese modernisation.3The BankerRanked 4th in Top 1000 World BanksThe Banker,Brand FinanceRanked 4th in Top 500 Global Banking BrandsFORTUNERanked 49th in Global 500Global FinanceOutstanding Leadership in Sustainable Finance Asia-PacificBest Private Bank for Entrepre

18、neursAsiamoneyBest Bank for ESG in ChinaThe Asian BankerBest Mega Private Bank in ChinaThe AssetTriple A Digital Awards Best Blockchain ProjectBest Custodian,QDIIBest Renminbi BankBest Bond Adviser Global,ChinaIFR AsiaChina Bond HousePBOCFinance Technology Development Award“Belt and Road”Green Inves

19、tment Principles(GIP)Best Innovation AwardGeneral Administration of Sport of ChinaCollective with Outstanding Contribution to National Ice and Snow Sports DevelopmentChina Transaction Banking 50 Forum,Trade Finance,Organising Committee of Annual Conference of China Transaction BankingThe 13th“Gold T

20、rade Awards”Best Cash Management Bank and Best Supply Chain Finance BankPPeoples Corporate Social Responsibility Award Green DevelopmentSecurities TimesAward for Investor Relation Case of Listed Companies in ChinaChina Securities JournalGolden Bull for Banking Wealth Management Golden Bull Award for

21、 Green FinanceLACPAnnual Report Competition Platinum AwardHurun Research InstituteRanked 5th in the Most Successful Chinese Heritage BrandsHonours and Awards4INTRODUCTION1HONOURS AND AWARDS3DEFINITIONS5IMPORTANT NOTICE8FINANCIAL HIGHLIGHTS9CORPORATE INFORMATION12MESSAGE FROM THE CHAIRMAN14MESSAGE FR

22、OM THE PRESIDENT19MANAGEMENT DISCUSSION AND ANALYSIS22FINANCIAL REVIEW22BUSINESS REVIEW40OVERVIEW OF STRATEGIC PROGRESS40COMMERCIAL BANKING IN THE CHINESE MAINLAND49GLOBALISED OPERATION65COMPREHENSIVE OPERATION75SERVICE CHANNELS84FINTECH INNOVATION86RISK MANAGEMENT87CAPITAL MANAGEMENT103ORGANISATION

23、AL MANAGEMENT,HUMAN RESOURCES DEVELOPMENT AND MANAGEMENT105OUTLOOK109ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES111ENVIRONMENT RESPONSIBILITIES111SOCIAL RESPONSIBILITIES118GOVERNANCE RESPONSIBILITIES121CHANGES IN SHARES AND SHAREHOLDINGS OF SHAREHOLDERS125DIRECTORS,SUPERVISORS AND SENIOR MANAGEMENT ME

24、MBERS134CORPORATE GOVERNANCE154REPORT OF THE BOARD OF DIRECTORS176REPORT OF THE BOARD OF SUPERVISORS191SIGNIFICANT EVENTS197INDEPENDENT AUDITORS REPORT200CONSOLIDATED FINANCIAL STATEMENTS212REFERENCE FOR SHAREHOLDERS456ORGANISATIONAL CHART459LIST OF MAJOR BRANCHES AND SUBSIDIARIES460Contents5In this

25、 report,unless the context otherwise requires,the following terms shall have the meaning set out below:The Bank/the GroupBank of China Limited or its predecessors and,except where the context otherwise requires,all of the subsidiaries of Bank of China LimitedArticles of AssociationThe performing Art

26、icles of Association of the BankA ShareDomestic investment share(s)in the ordinary share capital of the Bank,with a nominal value of RMB1.00 each,which are listed on the SSE(Stock Code:601988)Basis Point(Bp,Bps)Measurement unit of changes in interest rate or exchange rate.1 basis point is equivalent

27、 to 0.01 percentage pointsBOC Asset InvestmentBOC Financial Asset Investment Co.,Ltd.BOC AviationBOC Aviation Limited,a public company limited by shares incorporated in Singapore under the Singapore Companies Act,the shares of which are listed on the Hong Kong Stock ExchangeBOC Consumer FinanceBank

28、of China Consumer Finance Co.,Ltd.BOC Financial TechnologyBOC Financial Technology Co.,Ltd.BOC Fullerton Community BankBOC Fullerton Community Bank Co.,Ltd.BOC InsuranceBank of China Insurance Company LimitedBOC LifeBOC Group Life Assurance Co.,Ltd.BOCG InsuranceBank of China Group Insurance Company

29、 LimitedBOCG InvestmentBank of China Group Investment LimitedBOCHKBank of China(Hong Kong)Limited,an authorised financial institution incorporated under the laws of Hong Kong SAR and a wholly-owned subsidiary of BOCHK(Holdings)Definitions6BOCHK(Holdings)BOC Hong Kong(Holdings)Limited,a company incor

30、porated under the laws of Hong Kong SAR,the ordinary shares of which are listed on the Hong Kong Stock ExchangeBOCIBOC International Holdings LimitedBOCIMBank of China Investment Management Co.,Ltd.BOCI ChinaBOC International(China)Co.,Ltd.,a company incorporated in the Chinese mainland,the ordinary

31、 shares of which are listed on the SSEBOCLBOC Financial Leasing Co.,Ltd.BOC-Samsung LifeBOC-Samsung Life Ins.Co.,Ltd.BOC Wealth ManagementBOC Wealth Management Co.,Ltd.CASChinese Accounting Standards for Business EnterprisesCentral and Southern ChinaThe area including,for the purpose of this report,

32、the branches of Henan,Hubei,Hunan,Guangdong,Shenzhen,Guangxi and HainanCompany LawThe Company Law of PRCCSRCChina Securities Regulatory CommissionEastern ChinaThe area including,for the purpose of this report,the branches of Shanghai,Jiangsu,Suzhou,Zhejiang,Ningbo,Anhui,Fujian,Jiangxi,Shandong and Q

33、ingdaoHKEXHong Kong Exchanges and Clearing LimitedHong Kong Listing RulesThe Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong LimitedHong Kong Stock ExchangeThe Stock Exchange of Hong Kong Limited7H ShareOverseas-listed foreign investment share(s)in the ordinary share cap

34、ital of the Bank,with a nominal value of RMB1.00 each,which are listed on the Hong Kong Stock Exchange and traded in Hong Kong dollars(Stock Code:3988)HuijinCentral Huijin Investment Ltd.IFRS Accounting StandardsInternational Financial Reporting Standards as issued by the IASBIndependent DirectorInd

35、ependent director under the listing rules of the SSE and the Articles of Association,and independent non-executive director under the Hong Kong Listing RulesMOFMinistry of Finance,PRCNFRANational Financial Regulatory Administration and its predecessorsNortheastern ChinaThe area including,for the pur

36、pose of this report,the branches of Heilongjiang,Jilin,Liaoning and DalianNorthern ChinaThe area including,for the purpose of this report,the branches of Beijing,Tianjin,Hebei,Shanxi,Inner Mongolia and the Head OfficePBOCThe Peoples Bank of ChinaPRCThe Peoples Republic of ChinaRMBRenminbi,the lawful

37、 currency of PRCSAFEState Administration of Foreign Exchange,PRCSFOSecurities and Futures Ordinance(Chapter 571 of the Laws of Hong Kong SAR)SSEThe Shanghai Stock ExchangeWestern ChinaThe area including,for the purpose of this report,the branches of Chongqing,Sichuan,Guizhou,Yunnan,Shaanxi,Gansu,Nin

38、gxia,Qinghai,Tibet and Xinjiang8The Board of Directors,the Board of Supervisors,directors,supervisors and senior management members of the Bank warrant that the information in this report is authentic,accurate and complete,contains no false record,misleading statement or material omission,and jointl

39、y and severally accept full responsibility for the information in this report.The 2023 Annual Report and Annual Results Announcement of the Bank have been approved by the Board of Directors of the Bank on 28 March 2024.The number of directors who should attend the meeting is 14,with 14 directors att

40、ending the meeting in person.All of the 14 directors of the Bank exercised their voting rights at the meeting.The supervisors and senior management members of the Bank attended the meeting as non-voting attendees.The 2023 financial statements prepared by the Bank in accordance with CAS and IFRS Acco

41、unting Standards have been audited by PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers in accordance with Chinese and international auditing standards respectively.Both auditors issued an unqualified opinion.Legal Representative and Chairman GE Haijiao,Executive Vice President ZHANG

42、Yi,who is also responsible for the Banks finance and accounting,and General Manager of the Financial Management Department DONG Zonglin,warrant the authenticity,accuracy and completeness of the financial statements in this report.The Board of Directors has recommended a final dividend on ordinary sh

43、ares for 2023 of RMB2.364 per 10 shares(before tax),subject to approval in the forthcoming 2023 Annual General Meeting.No capitalisation of the capital reserve to share capital is proposed in this profit distribution.During the reporting period,there was no misappropriation of the Banks funds by its

44、 controlling shareholder or other related parties for non-operating purposes and no material guarantee business that has violated the applicable regulations and procedures.Important NoticeThis report may contain forward-looking statements that involve risks and future plans.These forward-looking sta

45、tements are based on the Banks own information and information from other sources that the Bank believes to be reliable.They relate to future events or the Banks future financial,business or other performance and are subject to a number of factors and uncertainties that may cause the actual results

46、to differ materially.Any future plans mentioned do not constitute a substantive commitment by the Bank to its investors.Investors and people concerned should be fully aware of the risks and understand the differences between plans,forecast and commitment.The Bank is faced with risks arising from cha

47、nges in the macroeconomic environment and from political and economic conditions in different countries and regions as well as risks arising from its day-to-day operations,including the risk arising from changes in the credit status of borrowers,adverse changes in market prices and operational risk.

48、It shall at the same time meet regulatory and compliance requirements.The Bank actively adopts adequate measures to effectively manage all types of risks.Please refer to the section“Management Discussion and Analysis Risk Management”for details.920232019202020212022(not restated)2022(restated)202320

49、19202020212022(not restated)2022(restated)20232019202020212022(not restated)2022(restated)0.610.700.730.720.740.610.920.890.850.850.800.8711.4511.2810.8110.7710.1210.6120232019202020212022(not restated)2022(restated)20232019202020212022(not restated)2022(restated)20232019202020212022(not restated)20

50、22(restated)249,588275,142283,950282,996246,220201,891227,339237,504236,725205,096550,010605,717619,139586,461624,138294,643246,371567,64720232019202020212022(not restated)2022(restated)20232019202020212022(not restated)2022(restated)20232019202020212022(not restated)2022(restated)1.891.751.761.751.

51、591.8529.0829.8125.5921.6925.2526.7328.0026.7328.1727.8828.9228.5020232019202020212022(not restated)2022(restated)20232019202020212022(not restated)2022(restated)20232019202020212022(not restated)2022(restated)182.86187.05188.73188.73191.661.27177.840.660.560.560.570.760.801.371.331.321.321.46Financ

52、ial HighlightsOperating incomeRMB MillionEPS(basic)RMBNet interest margin%Credit cost%Operating profitRMB MillionROA%Cost to income ratio(calculated underregulations in the Chinese mainland)%Non-performing loans to total loans%Profit for the yearRMB MillionROE%Non-interest income tooperating income%

53、Allowance for loan impairmentlosses to non-performing loans%10Note:The financial information in this report has been prepared in accordance with IFRS Accounting Standards.The data are presented in RMB and reflect amounts related to the Group,unless otherwise noted.Unit:RMB millionNote20232022(after

54、restatement)2022(beforerestatement)202120202019Results of operationsNet interest income466,545459,266460,678425,142415,918390,050Non-interest income2157,593127,195158,461180,575151,729159,960Operating income624,138586,461619,139605,717567,647550,010Operating expenses(222,933)(199,506)(231,196)(226,3

55、55)(202,411)(198,269)Impairment losses on assets3(106,562)(103,959)(103,993)(104,220)(119,016)(102,153)Operating profit294,643282,996283,950275,142246,220249,588Profit before income tax295,608283,641284,595276,620246,378250,645Profit for the year246,371236,725237,504227,339205,096201,891Profit attri

56、butable to equity holders of the Bank231,904226,522227,439216,559192,870187,405Total dividend of ordinary sharesN.A.68,29868,29865,06057,99456,228 Financial positionTotal assets32,432,16628,893,54828,913,85726,722,40824,402,65922,769,744Loans,gross19,961,77917,552,76117,554,32215,712,57414,216,47713

57、,068,785Allowance for loan impairment losses4(485,298)(437,241)(437,241)(390,541)(368,619)(325,923)Investments57,158,7176,435,2446,445,7436,164,6715,591,1175,514,062Total liabilities29,675,35126,330,24726,346,28624,371,85522,239,82220,793,048Due to customers22,907,05020,201,82520,201,82518,142,88716

58、,879,17115,817,548Capital and reserves attributable to equity holders of the Bank2,629,5102,423,9732,427,5892,225,1532,038,4191,851,701Share capital294,388294,388294,388294,388294,388294,388 Per shareBasic earnings per share(RMB)0.740.720.730.700.610.61Dividend per share(before tax,RMB)60.23640.2320

59、.2320.2210.1970.191Net assets per share(RMB)77.586.986.996.475.985.61 Key financial ratiosReturn on average total assets(%)80.800.850.850.890.870.92Return on average equity(%)910.1210.7710.8111.2810.6111.45Net interest margin(%)101.591.751.761.751.851.89Non-interest income to operating income(%)1125

60、.2521.6925.5929.8126.7329.08Cost to income ratio(calculated under regulations in the Chinese mainland,%)1228.5028.9227.8828.1726.7328.00 Capital ratios13Net common equity tier 1 capital2,161,8251,991,3421,991,3421,843,8861,704,7781,596,378Net additional tier 1 capital408,447381,648381,648329,845287,

61、843210,057Net tier 2 capital727,136573,481573,481525,108458,434394,843Common equity tier 1 capital adequacy ratio(%)11.6311.8411.8411.3011.2811.30Tier 1 capital adequacy ratio(%)13.8314.1114.1113.3213.1912.79Capital adequacy ratio(%)17.7417.5217.5216.5316.2215.59 Asset qualityCredit-impaired loans t

62、o total loans(%)141.271.321.321.331.461.37Non-performing loans to total loans(%)151.271.321.321.331.461.37Allowance for loan impairment losses to non-performing loans(%)16191.66188.73188.73187.05177.84182.86Credit cost(%)170.570.560.560.660.760.80Allowance for loan impairment losses to total loans(%

63、)182.442.502.502.492.602.50 Exchange rateUSD/RMB year-end central parity rate7.08276.96466.96466.37576.52496.9762EUR/RMB year-end central parity rate7.85927.42297.42297.21978.02507.8155HKD/RMB year-end central parity rate0.90620.89330.89330.81760.84160.8958 11Notes:1 The Group has adopted Internatio

64、nal Financial Reporting Standard No.17 Insurance Contracts(“IFRS 17”)as issued by the International Accounting Standards Board(“IASB”)with the initial application date 1 January 2023,which resulted in the restatement of the comparative figures for the previous period starting from 1 January 2022 in

65、accordance with the transitional provisions of IFRS 17.In this report,the figures starting from 1 January 2022 have been restated.There is no restatement for other previous comparative figures.2 Non-interest income=net fee and commission income+net trading gains/(losses)+net gains/(losses)on transfe

66、rs of financial assets+other operating income.3 Impairment losses on assets=Credit impairment losses+Impairment losses on other assets.4 Allowance for loan impairment losses=allowance for loans at amortised cost+allowance for loans at fair value through other comprehensive income.5 The investments i

67、nclude financial assets at fair value through profit or loss,financial assets at fair value through other comprehensive income and financial assets at amortised cost.6 Dividend per share is the dividend per ordinary share distributed to ordinary shareholders.7 Net assets per share=(capital and reser

68、ves attributable to equity holders of the Bank at year-end other equity instruments)number of ordinary shares in issue at year-end.8 Return on average total assets=profit for the year average total assets 100%.Average total assets=(total assets at the beginning of the year+total assets at year-end)2

69、.9 Return on average equity=profit attributable to ordinary shareholders of the Bank weighted average capital and reserves attributable to ordinary shareholders of the Bank 100%.Calculation is based on No.9 Preparation and Reporting Rules of Information Disclosure of Public Offering Companies Calcul

70、ation and Disclosure of Return on Average Equity and Earnings per Share(Revised in 2010)(CSRC Announcement 2010 No.2)issued by the CSRC.10 Net interest margin=net interest income average balance of interest-earning assets 100%.Average balance is average daily balance derived from the Groups manageme

71、nt accounts(unaudited).11 Non-interest income to operating income=non-interest income operating income 100%.12 Cost to income ratio is calculated in accordance with the Measures of the Performance Evaluation of Financial Enterprises(Cai Jin 2016 No.35)formulated by the MOF.13 The capital ratios are

72、calculated in accordance with the Capital Rules for Commercial Banks(Provisional)(Y.J.H.L.2012 No.1)and related regulations,under the Advanced Approaches.14 Credit-impaired loans to total loans=credit-impaired loans at year-end total loans at year-end 100%.Total loans are exclusive of accrued intere

73、st when being used to calculate credit-impaired loans to total loans.15 Non-performing loans to total loans=non-performing loans at year-end total loans at year-end 100%.Total loans are exclusive of accrued interest when being used to calculate non-performing loans to total loans.16 Allowance for lo

74、an impairment losses to non-performing loans=allowance for loan impairment losses at year-end non-performing loans at year-end 100%.Total loans are exclusive of accrued interest when being used to calculate allowance for loan impairment losses to non-performing loans.17 Credit cost=impairment losses

75、 on loans average balance of loans 100%.Average balance of loans=(balance of loans at the beginning of the year+balance of loans at year-end)2.Total loans are exclusive of accrued interest when being used to calculate credit cost.18 Allowance for loan impairment losses to total loans=allowance for l

76、oan impairment losses at year-end total loans at year-end 100%.Total loans are exclusive of accrued interest when being used to calculate allowance for loan impairment losses to total loans.12Corporate InformationRegistered Name in Chinese中國銀行股份有限公司(“中國銀行”)Registered Name in EnglishBANK OF CHINA LIM

77、ITED(“Bank of China”)Legal Representative and ChairmanGE HaijiaoVice Chairman and PresidentLIU JinSecretary to the Board of Directors and Company SecretaryZHUO ChengwenOffice Address:No.1 Fuxingmen Nei Dajie,Xicheng District,Beijing,ChinaTelephone:(86)10-6659 2638E-mail:Listing Affairs Representativ

78、eJIANG ZhuoOffice Address:No.1 Fuxingmen Nei Dajie,Xicheng District,Beijing,ChinaTelephone:(86)10-6659 2638E-mail:Registered AddressNo.1 Fuxingmen Nei Dajie,Xicheng District,Beijing,ChinaOffice AddressNo.1 Fuxingmen Nei Dajie,Xicheng District,Beijing,China,100818Telephone:(86)10-6659 6688Facsimile:(

79、86)10-6601 6871Website:Customer Service and Complaint Hotline:(86)Area Code-95566Place of Business in Hong Kong SARBank of China Tower,1 Garden Road,Central,Hong Kong,ChinaSelected Newspapers for Information Disclosure(A Share)China Securities Journal,Shanghai Securities News,Securities Times,Econom

80、ic Information DailyWebsite of the SSE for Publication of the Annual RWebsite of the HKEX for Publication of the Annual Reportwww.hkexnews.hkPlace Where Annual Report Can Be ObtainedHead Office of Bank of China LimitedShanghai Stock ExchangeLegal AdvisorKing&Wood MallesonsLinklaters13AuditorsDomesti

81、c AuditorPricewaterhouseCoopers Zhong Tian LLPOffice Address:11/F PricewaterhouseCoopers Center,Link Square 2,202 Hu Bin Road,Huangpu District,Shanghai,ChinaCertified Public Accountants who signed the auditors report:Ms.HO Shuk Ching Margarita,Mr.WANG Wei,Mr.LI DanInternational AuditorPricewaterhous

82、eCoopersOffice Address:22/F,Princes Building,Central,Hong Kong,ChinaUnified Social Credit Code911000001000013428Financial Institution Licence Serial NumberB0003H111000001Registered CapitalRMB294,387,791,241Securities InformationA ShareShanghai Stock ExchangeStock Name:中國銀行Stock Code:601988H ShareThe

83、 Stock Exchange of Hong Kong LimitedStock Name:Bank of ChinaStock Code:3988Domestic Preference ShareShanghai Stock ExchangeThird TrancheStock Name:中行優3Stock Code:360033Fourth TrancheStock Name:中行優4Stock Code:360035Offshore Preference Share Second TrancheThe Stock Exchange of Hong Kong LimitedStock N

84、ame:BOC 20USDPREFStock Code:461914Message from the ChairmanSeasons flowing,we keep forging ahead.2023 was the first year to fully implement the guiding principles of the 20th National Congress of the Communist Party of China(CPC).Bank of China,guided by Xi Jinping Thought on Socialism with Chinese C

85、haracteristics for a New Era,resolutely carried out strategies and plans of the CPC Central Committee and the State Council.We fully and faithfully embraced the new development philosophy on all fronts and actively provided high-quality financial services to support economic and social development.T

86、he Groups overall business performance and corporate management are stable and improving,with continuous advancements in operational efficiency,composite strength and market competitiveness,leading to sound results.As at the end of 2023,the Groups assets and liabilities totalled RMB32.43 trillion an

87、d RMB29.68 trillion respectively,an increase of 12.25%and 12.70%from the prior year-end;operating income stood at RMB624.138 billion,up by 6.42%;the non-performing loan ratio was 1.27%,a decrease of 0.05 percentage points;and the capital adequacy ratio was 17.74%,an increase of 0.22 percentage point

88、s.The Board of Directors has proposed a cash dividend of RMB2.364 per 10 ordinary shares,representing a dividend payout ratio of 30%.We optimised supply of financial services and contributed to the high-quality development of the real economy.We increased support for major national strategies,and th

89、e key and under-served areas of the economy,achieving a growth of RMB2.4 trillion in the balance of RMB loans as well as optimisation in the structure.To facilitate the formation of a modern industrial system and promote major technological breakthroughs,we granted credit lines of nearly RMB1.5 tril

90、lion to around 68,000 tech enterprises,boosting the virtuous cycle of“research industry financing”.We implemented concrete measures to actively address the concerns of private enterprises,and formulated an action plan to support them to“Go Global”;the balance of loans to private enterprises increase

91、d by RMB790 billion,representing a growth of over 27%.We accelerated the digital transformation of loans to micro and small businesses and expanded the outreach of our inclusive finance business,growing the balance of inclusive loans to over RMB1.7 trillion,up by over 40%.In response to climate chan

92、ge,we actively participated in global green governance.We integrated green standards into our daily operations,enhanced the“BOC Green+”brand,and led the industry in green bond underwriting deals.15We strengthened our advantages in globalisation and supported higher-standard opening up.We opened Riya

93、dh Branch in Saudi Arabia and a representative office in Papua New Guinea in the year,expanding our global service network to cover 64 countries and regions outside the Chinese mainland.With a focus on improving the market competitiveness of our overseas institutions,we consolidated our business adv

94、antages in Hong Kong and Macao,and overseas institutions increased their contribution to the Groups overall profits.We were designated as the RMB clearing bank in Cambodia and in Serbia,and continued to lead the market in cross-border RMB clearing and settlement volumes as well as in domestic saving

95、s and lending in foreign currencies.We took initiative to facilitate the positive interplay between domestic and international economic flows,and supported major national events like the China International Import Expo,the China International Consumer Products Expo,and China International Fair for T

96、rade in Services in attracting global participants.Contributing to the stability and structural optimisation of Chinas foreign trade,we innovated financial services for new business trends including the export of electric vehicles,lithium batteries and solar cells,cross-border e-commerce,and oversea

97、s warehouses,which brought the Groups international settlement volume for the year to around USD8 trillion.We also accelerated facilitation of payments for international travelers to China,helped clear up payment service bottlenecks,and expanded our lead in overseas bank card acquiring business in C

98、hina.Weve remained dedicated to customer-centric principles and consistently improved service quality and efficiency.To meet peoples aspiration for a better life,we took solid steps in product innovation,process optimisation and consumer rights protection.We expanded offerings of wealth management p

99、roducts and ensured product safety,profitability,and liquidity;allowing us to take the total financial assets of personal clients under our management to over RMB14 trillion.We lowered interest rates on existing mortgages for first-time home buyers,benefiting loans exceeding RMB2.5 trillion.We suppo

100、rted growth of household spending,with special focuses on large purchases like new energy vehicles and electronics,leading to a nearly 45%increase in the balance of non-housing consumer loans.We introduced new service schemes for“migratory pensioners”and continued to adapt our outlets and online cha

101、nnels to accommodate the needs of elderly customers,ensuring smooth delivery of pension financial services.We continuously increased credit support to agriculture-related fields,innovating product models tailored to local conditions,making financial services more accessible to farmers,and actively c

102、ontributing to rural revitalisation and the modernisation of agriculture and rural areas.16We balanced security and development,and effectively prevented and defused financial risks.With a focus on eliminating and controlling risks at source,we continued to enhance our enterprise risk management sys

103、tem,incorporating outsourcing risk and data security risk into the system to reinforce effective identification and control of non-traditional risks.We established a dynamic risk identification mechanism and carried out comprehensive risk inspections across the Group.We conducted stress tests on mul

104、tiple key areas and developed contingency plans,completing the full cycle of risk assessment,investigation,and emergency responses.We sped up improving the intelligent risk control system and advanced the development of the Groups unified risk dashboard,making our risk management more effective and

105、forward-looking.We bolstered overseas risk management,formulating market-specific risk strategies for overseas institutions and putting in place a 24/7 global monitoring mechanism to respond to fluctuations in financial markets worldwide.In the domestic market,we also applied a city-by-city approach

106、 to optimise our credit structure in real estate and meet reasonable financing needs of developers,both state-owned and from the private sector,contributing to the steady and healthy development of the property market.We pushed ahead with reform and innovation,and continued to elevate the efficiency

107、 of corporate governance.Actively adapting to the evolving era and the demands of high-quality development,we optimised the corporate governance system,revised our Articles of Association,refined rules and procedures for the shareholders meeting and the Board meeting,making corporate governance more

108、 standardised and professional.With a view to serving national interests and enhancing market competitiveness,we systematically reformed and enhanced our performance appraisal system,effectively driving business expansion and improvements in structure and quality.We made new progress with the buildi

109、ng of an enterprise-level architecture and rolled out optimisation plans to technology systems on schedule,steadily advancing the digital transformation of the Groups operations and management.We strengthened process management for priority areas and full-cycle post-assessment,and fostered a culture

110、 of integrity,practicality and accountability.We enhanced synergy between branches and institutions by establishing mechanisms to ensure access to the Banks global resources and services accessible at any point of contact and to promote collaboration between non-banking arms.We also made constant im

111、provements to governance at non-banking subsidiaries and witnessed significant performance rebound in return.17The Central Financial Work Conference has sounded a clarion call to accelerate efforts to build China into a global leader in the financial sector,endowing financial institutions with clear

112、er responsibilities and mission.This represents a rare opportunity for Bank of China to leverage its distinctive advantages and expedite its high-quality development.With unwavering confidence,determined efforts,united spirits,and ownership,we pledge to act faster,and take more substantial and effec

113、tive measures to contribute to Chinas modernisation.First,we will effectively implement the decisions and plans of the CPC Central Committee.We will adhere to the centralised and unified leadership of the CPC Central Committee over financial work,faithfully implement the strategies of the CPC Centra

114、l Committee and the State Council in our reform and development,operation and management,risk prevention and control,and drive the Banks high-quality development.Second,we will play a key role in serving the real economy.We will build a diversified and specialised line-up of products and services wi

115、th a focus on the five major tasks technology finance,green finance,inclusive finance,pension finance and digital finance,to accelerate the development of new quality productive forces and effectively enhance our competitiveness and service capabilities.Third,we will take the lead in serving the new

116、 development pattern featuring the positive interplay between domestic and international economic flows.With a focus on enhancing our global capabilities and international competitiveness,and improving our globalised product service capability and resource allocation efficiency,we will provide our c

117、ustomers committed to“Going Global”and“Bringing In”with a package of financial services,and strive to play an even more important role worldwide.Fourth,we will serve as an anchor for financial stability.Applying a systemic approach,we will navigate through the balance between power and responsibilit

118、y,between efficiency and stability,and between prevention and reaction.We will ensure full compliance with regulatory requirements,safeguard financial safety,and foster a virtuous cycle of high-quality development and high-standard security.Fifth,we will take proactive and effective actions in stren

119、gthening our bank as a large state-owned financial institution.Guided by financial culture with Chinese characteristics,we will improve our customer-oriented operating system,achieve pragmatic and efficient closed-loop execution,lay solid foundations for the Groups digital transformation,and foster

120、stronger synergy for development.18Building on the great progress weve made in the past year,we will aim for new heights in 2024.Following the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,we will continue to seek progress while maintaining stability and prom

121、ote stability through progress,to foster steady innovations and breakthroughs.We will push ahead with transforming the growth model,making structural adjustments,improving quality and enhancing performance,and deliver stronger results in return for the trust and support from our shareholders and soc

122、iety,paving the way for a new era of high-quality development for Bank of China.GE HaijiaoChairman28 March 202419Message from the PresidentIn 2023,Bank of China earnestly implemented the decisions and plans of the CPC Central Committee and the State Council,improved operation and management on all f

123、ronts,and continued to build up market competitiveness while serving the bigger picture of social and economic development.We expanded the Groups assets,liabilities and operating income further;delivered on targets for all key indicators as set by the Board of Directors;and made progress while ensur

124、ing stability in performance.We recorded a more robust financial performance with continued growth in assets and liabilities.The Group steadily improved its overall strength,grew its total assets and liabilities by RMB3.54 trillion and RMB3.35 trillion,respectively,from the end of 2022.We continued

125、to optimise the structure of our assets and liabilities and secure our funding sources,with the deposits-to-liabilities ratio rising by 0.47 percentage points.Operating income reached a new high of RMB620 billion.Net interest income increased steadily.Non-interest income exceeded RMB150 billion,up b

126、y 3.56 percentage points as a share of total income.We allocated more resources towards key products,key areas and key regions,and improved the costs and expenditures structure.Our cost-to-income ratio stood at 28.50%,down 0.42 percentage points.We registered rapid growth in main business areas,and

127、delivered better and more effective services to the real economy.We optimised our capital structure,worked hard to develop more diverse,inclusive and accessible products and services,and channelled more financial resources to serve technological innovation,advanced manufacturing,green development an

128、d micro,small and medium-sized enterprises.The balance of strategic emerging industry loans,loans granted to manufacturing industries,and technology finance loans increased by 74.35%,28.05%and 30.94%,respectively.And we granted credit lines to more than 15 thousand national and provincial-level“spec

129、ialised and sophisticated enterprises that produce new and innovative products”.We moved faster to build us into“the preferred bank for green financial services”.Our domestic green credit grew by more than RMB1.1 trillion in 2023,an increase of 56.34%year-on-year.We continued to support peoples live

130、lihood and employment through the Bring Jobs to Families campaign,and issued over RMB270 billion special loans to self-employed individuals,new urban residents,and other types of market participants.We served over 18,200 corporate annuity clients,and the pension fiduciary assets under our custody in

131、creased by about 23.29%year-on-year.We further improved mobile banking functions and grew the number of monthly active users to nearly 90 million.The number of e-CNY partner merchants and e-CNY transaction size increased rapidly,and application scenarios of e-CNY continued to be expanded.20We sharpe

132、ned our edge in globalised and diversified operations,and enhanced synergy among different business lines.Operating income and after-tax profit from overseas operations rose significantly year-on-year,respectively.BOCHK and Bank of China(Europe)S.A.continued to refine their management of the branche

133、s and subsidiaries in Southeast Asian and the EU markets,respectively.The mechanism for regional synergistic development has been carried out in Latin America,South Asia and South Pacific as planned.And we fully leveraged business opportunities in cross-border trade and investment,acted faster to bu

134、ild a global team of relationship managers,and further enhanced the competitiveness of our cross-border investment and financing products.We further consolidated our market leadership in Panda bonds,offshore bonds issued by Chinese entities,and cross-border custody.Focusing on synergy within the Gro

135、up,risk control,business sustainability,and market competitiveness,we continued to enhance our comprehensive service and collaborative marketing capabilities.Our non-banking subsidiaries contribution to the Groups total profits increased over the previous year.We continued to improve risk management

136、 and control mechanism and consolidate the foundation for stable and prudent operations.The Group maintained stability in both asset quality and key risk indicators.Market risks were well managed and under control.We bolstered our cushion against risks;the Groups non-performing loan coverage ratio r

137、ose by 2.93 percentage points,to 191.66%.We intensified efforts in the disposal of non-performing assets.By implementing targeted strategies for different types of assets,we achieved major breakthroughs and enhanced both our efficiency and capacity for recovering and resolving NPLs.We improved the m

138、anagement mechanism for operational and derivative risks,optimised internal control policies and processes,strengthened risk management in the fields of data,public opinion,safety of operation,and business continuity,and strictly prevented risk spill-over and contagion.In response to changing market

139、 conditions,the Group carefully managed funding sources and usage of local and foreign currencies to ensure sufficient liquidity.We also enhanced our capabilities to prevent digital risks across all online channels and effectively ensured the safe operation of systems.21The year of 2024 marks the 75

140、th anniversary of the founding of the Peoples Republic of China and represents a pivotal moment for achieving the goals and tasks set forth in the 14th Five-Year Plan.Together with the Senior Management,I will continuously improve our operational and management,and strive to faithfully implement the

141、 decisions and plans of the CPC Central Committee and the State Council through concrete actions.First,we will vigorously develop technology finance,green finance,inclusive finance,pension finance and digital finance.We will tailor new financial services to the needs of tech enterprises,support the

142、transition to green development models,further improve the quality and efficiency of inclusive financial services,accelerate developing pension finance,and quicken the pace of digital transformation.Second,we will actively support the expansion of effective demand.We will boost growth of consumption

143、 and investment,support the building of a modern industrial system,provide high-quality services to the national strategy of coordinated regional development,and play an active part in stabilizing foreign trade and investment.Third,we will serve the high-level two-way opening up of the financial sec

144、tor,accelerate the high-quality development of our overseas institutions,enhance connectivity between domestic and overseas financial markets,and promote RMB internationalisation in a solid and prudent manner.Fourth,we will continue to enhance our fundamental work,refine management of capital,optimi

145、se deposit structure,and upgrade our credit supply with targeted efforts.We will accelerate our efforts to build a larger and higher-quality customer base,and further refine our collaboration mechanism.Fifth,we will improve our Enterprise Risk Management system,enhance the quality and efficiency of

146、the management of traditional risks,proactively prevent non-traditional risks,pursue high-quality implementation of regulatory requirements,and make every effort to maintain financial stability.The blueprint has been drawn,and it is time to turn it into reality.We will forge ahead with greater confi

147、dence,deliver outstanding performance in return for the trust and support of our customers,investors and all sectors of society,earnestly fulfil our economic and social responsibilities,and make greater contributions to the modernisation and rejuvenation of the Chinese nation.LIU JinPresident28 Marc

148、h 202422Management Discussion and AnalysisFINANCIAL REVIEWEconomic and Financial EnvironmentIn 2023,the global economy maintained a certain level of resilience,but exhibited a weak recovery.The global economic environment became increasingly complex,severe and uncertain.The pace of interest rate hik

149、es in major developed economies slowed down.Overall inflation pressure alleviated,but with strong stickiness.Economic divergence across regions widened.The US economy maintained overall stability,European economies remained mostly stagnant,and emerging economies gradually stabilised.Global financial

150、 markets experienced significant volatility,the US dollar index fluctuated downwards,and capital reshoring to the US decelerated.The US treasury market became more volatile,and some economies experienced heightened debt risk.Chinas economy sustained its recovery,with consistent improvements in suppl

151、y and demand,positive advances in economic transformation and upgrading,stable employment and commodity prices,effective protection of peoples livelihood,and solid progress in high-quality development.In 2023,Chinas gross domestic product(GDP)grew by 5.2%year-on-year;total retail sales of consumer g

152、oods(TRSCG)increased by 7.2%year-on-year;the value-added of industrial enterprises above a designated size expanded by 4.6%year-on-year;total fixed asset investment(TFAI)(excluding those by rural households)rose by 3.0%year-on-year;total exports climbed by 0.2%,with a trade surplus of RMB5.79 trilli

153、on,and the consumer price index(CPI)increased by 0.2%year-on-year.China implemented a sound monetary policy in a targeted and effective manner and strengthened the counter-cyclical and inter-temporal adjustments.Money and credit as well as aggregate financing to the real economy(AFRE)witnessed reaso

154、nable growth;comprehensive financing costs fell steadily;the credit structure was further optimised,and RMB exchange rates maintained basic stability at an adaptive and equilibrium level.Overall,it created a favorable monetary and financial environment for the economic recovery and improvement.As at

155、 the end of 2023,the outstanding broad money supply(M2)was RMB292.3 trillion,up 9.7%year-on-year.The balance of RMB loans reached RMB237.6 trillion,an increase of 10.6%year-on-year.Outstanding aggregate financing to the real economy(AFRE)was RMB378.1 trillion,up 9.5%year-on-year.The SSE Composite In

156、dex stood at 2,974.93 points,dipping 3.7%from the end of the prior year.The central parity of the RMB against the US dollar was 7.0827,a depreciation of 1.7%compared with the prior year-end.23Chinas banking sector firmly supported the national strategy,pressed ahead with supply-side structural refor

157、ms,supported high-level opening up and comprehensively enhanced the adaptability and effectiveness of its services to the real economy.It focused on stabilising the overall macroeconomy,assisted in leveraging the fundamental role of consumption and the critical role of investment,and increased finan

158、cial support for key areas and weak links in the economy.The sector consistently emphasised risk prevention and control in its financial work,and held the red line of forestalling systemic financial risk by keeping major risk indicators within a reasonable range and strengthening risk resistance.As

159、at the end of 2023,the total assets of Chinas banking sector grew by 9.9%from the prior year-end to RMB417.3 trillion,while total liabilities increased by 10.1%to RMB383.1 trillion.Commercial banking institutions recorded a net profit of RMB2.4 trillion,a year-on-year increase of 3.2%.Outstanding no

160、n-performing loans(NPLs)stood at RMB3.2 trillion as at the end of the year,with a NPL ratio of 1.59%.The allowance for loan impairment losses to non-performing loans was 205.1%,and the capital adequacy ratio was 15.1%.Income Statement AnalysisClosely adhering to the requirements of the Groups 14th F

161、ive-Year Plan,the Bank persevered in advancing the growth of business scale and the enhancement of structural quality.It demonstrated noticeable achievement in serving the real economy,increased contributions from its globalised and comprehensive operation,and effectively strengthened its prudent op

162、erational capabilities,resulting in stable and positive progress in operational performance.In 2023,the Group achieved a profit for the year of RMB246.371 billion,an increase of RMB9.646 billion or 4.07%compared with the prior year.It realised a profit attributable to equity holders of the Bank of R

163、MB231.904 billion,an increase of RMB5.382 billion or 2.38%compared with the prior year.Return on average total assets(ROA)was 0.80%and return on average equity(ROE)was 10.12%.The principal components and changes of the Groups consolidated income statement are set out below:Unit:RMB million,except pe

164、rcentagesItems20232022ChangeChange(%)Net interest income466,545459,2667,2791.58%Non-interest income157,593127,19530,39823.90%Including:net fee and commission income78,86574,8903,9755.31%Operating income624,138586,46137,6776.42%Operating expenses(222,933)(199,506)(23,427)11.74%Impairment losses on as

165、sets(106,562)(103,959)(2,603)2.50%Operating profit294,643282,99611,6474.12%Profit before income tax295,608283,64111,9674.22%Income tax expense(49,237)(46,916)(2,321)4.95%Profit for the year246,371236,7259,6464.07%Profit attributable to equity holders of the Bank231,904226,5225,3822.38%24A detailed r

166、eview of the Groups principal items in each quarter of 2023 is summarised in the following table:Unit:RMB millionItemsFor the three-month period ended31 December202330 September202330 June202331 March2023 Operating income153,206151,225153,490166,217Profit attributable to equity holders of the Bank57

167、,04654,76362,43257,663Net cash inflow/(outflow)from operating activities330,287(149,123)146,523488,759Net Interest Income and Net Interest MarginIn 2023,the Group achieved net interest income of RMB466.545 billion,an increase of RMB7.279 billion or 1.58%compared with the prior year.Specifically,inte

168、rest income stood at RMB1,048.851 billion,an increase of RMB168.003 billion or 19.07%compared with the prior year,and interest expense stood at RMB582.306 billion,an increase of RMB160.724 billion or 38.12%compared with the prior year.Interest IncomeIn 2023,interest income on loans was RMB750.601 bi

169、llion,an increase of RMB97.946 billion or 15.01%compared with the prior year,which was primarily attributable to an increase in loan scale.Interest income on investments amounted to RMB192.293 billion,an increase of RMB27.690 billion or 16.82%compared with the prior year,mainly due to an increase in

170、 investment scale and rising interest rates.Interest income on balances with central banks and due from and placements with banks and other financial institutions was RMB105.957 billion,an increase of RMB42.367 billion or 66.63%compared with the prior year,mainly due to the increase in interest rate

171、s.Interest ExpenseIn 2023,interest expense on due to customers was RMB450.851 billion,an increase of RMB138.928 billion or 44.54%compared with the prior year,principally due to increase in the scale and the interest rate of deposits.Interest expense on due to and placements from banks and other fina

172、ncial institutions was RMB85.678 billion,an increase of RMB20.300 billion or 31.05%compared with the prior year,which was primarily attributable to the increase in interest rates.Interest expense on bonds issued was RMB45.777 billion,an increase of RMB1.496 billion or 3.38%compared with the prior ye

173、ar,which was mainly attributable to an increase in the scale of bonds issued.25Net Interest MarginIn 2023,the Groups net interest margin was 1.59%,representing a decrease of 16 basis points from the prior year.Faced with a reduction in RMB loan yields driven by a drop in the RMB Loan Prime Rate(LPR)

174、and adjustments to existing mortgage loan rates,the Bank strengthened proactive management and thus minimise the decline in net interest margin.First,the Bank adhered to the development strategy of striking balance between volume growth and price control,and optimised the structure of its RMB assets

175、 and liabilities.The proportion of deposits and loans increased in its interest-bearing liabilities and interest-bearing assets,with the proportion of the average balance of RMB medium and long-term loans within its total RMB loans in the Chinese mainland being 74.14%.Second,the Bank improved the ne

176、t interest margin of its foreign currency assets and liabilities by capitalising on the timing of US Federal Reserve rate hikes and leveraging its foreign currency business capabilities.The average balances1 and average interest rates of the major interest-earning assets and interest-bearing liabili

177、ties of the Group,as well as the impact on interest income/expense of variances in the volume factor and the interest rate factor2,are summarised in the following table:Unit:RMB million,except percentages20232022Analysis of changes in interestincome/expenseItemsAverage balanceInterest income/expense

178、Average interest rateAverage balanceInterest income/expenseAverage interest rateVolume factorInterest rate factorTotal Interest-earning assetsLoans18,924,693750,6013.97%16,748,644652,6553.90%84,86613,08097,946Investments6,083,691192,2933.16%5,576,816164,6032.95%14,95312,73727,690Balances with centra

179、l banks and due from and placements with banks and other financial institutions4,258,069105,9572.49%3,878,78063,5901.64%6,22036,14742,367Total29,266,4531,048,8513.58%26,204,240880,8483.36%106,03961,964168,003Interest-bearing liabilitiesDue to customers21,551,296450,8512.09%18,854,117311,9231.65%44,5

180、0394,425138,928Due to and placements from banks and other financial institutions3,644,17985,6782.35%3,831,83165,3781.71%(3,209)23,50920,300Bonds issued1,496,09145,7773.06%1,440,78744,2813.07%1,698(202)1,496Total26,691,566582,3062.18%24,126,735421,5821.75%42,992117,732160,724Net interest income466,54

181、5459,26663,047(55,768)7,279Net interest margin1.59%1.75%(16)Bps1 Average balances are average daily balances derived from the Groups management accounts(unaudited).2 The impact on interest income/expense of variances in the volume factor is calculated based on the changes in average balances of inte

182、rest-earning assets and interest-bearing liabilities during the reporting period.The impact on interest income/expense of variances in the interest rate factor is calculated based on the changes in the average interest rates of interest-earning assets and interest-bearing liabilities during the repo

183、rting period.The impact relating to the combined changes in both the volume factor and the interest rate factor has been classified as a change in the interest rate factor.26Notes:1 Investments include debt securities at fair value through other comprehensive income,debt securities at amortised cost

184、,investment trusts and asset management plans,etc.2 Balances with central banks and due from and placements with banks and other financial institutions include mandatory reserves,surplus reserves,other placements with central banks and due from and placements with banks and other financial instituti

185、ons.3 Due to and placements from banks and other financial institutions include due to and placements from banks and other financial institutions,due to central banks and other funds.The average balances and average interest rates of loans and due to customers in the Chinese mainland,classified by b

186、usiness type,are summarised in the following table:20232022ChangeItemsAverage balanceAverage interest rateAverage balanceAverage interest rateAverage balanceAverage interest rate RMB businesses in the Chinese mainlandUnit:RMB million,except percentagesLoansCorporate loans9,195,3163.48%7,492,1733.86%

187、1,703,143(38)BpsPersonal loans5,705,8674.43%5,554,5414.84%151,326(41)BpsTrade bills589,9671.41%445,5601.80%144,407(39)BpsTotal15,491,1503.75%13,492,2744.20%1,998,876(45)BpsIncluding:Medium and long-term loans11,484,4154.09%10,045,1684.59%1,439,247(50)BpsShort-term loans within 1 year and others4,006

188、,7352.78%3,447,1063.05%559,629(27)BpsDue to customersCorporate demand deposits4,435,0531.06%3,978,9310.92%456,12214BpsCorporate time deposits3,462,4152.60%2,871,1722.77%591,243(17)BpsPersonal demand deposits2,807,3270.23%2,570,7150.30%236,612(7)BpsPersonal time deposits5,300,0992.68%4,220,9282.93%1,

189、079,171(25)BpsOther698,1052.88%738,4263.11%(40,321)(23)BpsTotal16,702,9991.83%14,380,1721.88%2,322,827(5)Bps Foreign currency businesses in the Chinese mainlandUnit:USD million,except percentagesLoans50,3644.42%52,8801.88%(2,516)254BpsDue to customersCorporate demand deposits54,0061.90%70,3720.27%(1

190、6,366)163BpsCorporate time deposits48,2774.27%38,0481.19%10,229308BpsPersonal demand deposits23,2760.02%27,0240.02%(3,748)Personal time deposits18,6471.71%15,8290.40%2,818131BpsOther1,8182.04%3,1461.68%(1,328)36BpsTotal146,0242.36%154,4190.50%(8,395)186BpsNote:“Due to customers Other”includes struct

191、ured deposits.27Non-interest IncomeIn 2023,the Group reported non-interest income of RMB157.593 billion,an increase of RMB30.398 billion or 23.90%compared with the prior year.Non-interest income represented 25.25%of operating income.Net Fee and Commission IncomeThe Group earned net fee and commissio

192、n income of RMB78.865 billion,an increase of RMB3.975 billion or 5.31%compared with the prior year,representing 12.64%of operating income.This was mainly due to the Banks increased business development efforts,and the income from consulting and advisory business,fiduciary business and bank card busi

193、ness increased.Changes in net fee and commission income are set out below:Unit:RMB million,except percentagesItems20232022ChangeChange(%)GroupAgency commissions21,13422,319(1,185)(5.31%)Bank card fees13,58512,2561,32910.84%Settlement and clearing fees16,67215,9946784.24%Credit commitment fees11,4121

194、1,368440.39%Consultancy and advisory fees8,0515,6512,40042.47%Spread income from foreign exchange business5,7515,788(37)(0.64%)Custodian and other fiduciary service fees8,5816,8441,73725.38%Other7,1836,8823014.37%Fee and commission income92,36987,1025,2676.05%Fee and commission expense(13,504)(12,21

195、2)(1,292)10.58%Net fee and commission income78,86574,8903,9755.31%Chinese mainlandAgency commissions17,83417,7021320.75%Bank card fees10,65210,0785745.70%Settlement and clearing fees14,85014,3704803.34%Credit commitment fees4,9825,400(418)(7.74%)Consultancy and advisory fees6,9204,7802,14044.77%Spre

196、ad income from foreign exchange business5,3105,520(210)(3.80%)Custodian and other fiduciary service fees7,8416,1941,64726.59%Other4,2545,435(1,181)(21.73%)Fee and commission income72,64369,4793,1644.55%Fee and commission expense(9,791)(10,400)609(5.86%)Net fee and commission income62,85259,0793,7736

197、.39%28Other Non-interest IncomeThe Group realised other non-interest income of RMB78.728 billion,an increase of RMB26.423 billion or 50.52%compared with the prior year.This was primarily attributable to an increase in net trading gain from foreign exchange and interest rate products due to market fl

198、uctuations.Please refer to Notes V.3,4,5 to the Consolidated Financial Statements for detailed information.Unit:RMB million,except percentagesItems20232022ChangeChange(%)Net trading gains28,7237,22121,502297.77%Net gains on transfers of financial asset8062,083(1,277)(61.31%)Other operating income49,

199、19943,0016,19814.41%Total78,72852,30526,42350.52%Operating ExpensesThe Bank continued to operate its business in a prudent manner.It continually optimised its cost structure strictly reduced the general expenses,allocated greater resources to scientific and technological innovation and digital opera

200、tion,so as to promote the level of refined management and increase output efficiency.In 2023,the Group recorded operating expenses of RMB222.933 billion,an increase of RMB23.427 billion or 11.74%compared with the prior year.Of which,it recorded operating and administrative expenses(including staff c

201、osts,general operating and administrative expenses,depreciation and amortisation)of RMB177.503 billion,an increase of RMB8.190 billion or 4.84%compared with the prior year.The Groups cost to income ratio(calculated in accordance with regulations in the Chinese mainland)was 28.50%,a decrease of 0.42

202、percentage points compared with the prior year.Please refer to Note V.6,7 to the Consolidated Financial Statements for detailed information.Unit:RMB million,except percentagesItems20232022ChangeChange(%)Staff costs107,872101,0046,8686.80%General operating and administrative expenses44,77844,730480.1

203、1%Depreciation and amortisation24,85323,5791,2745.40%Cost of sales of precious metal products13,9399,0904,84953.34%Insurance service expenses9,0207,8141,20615.43%Insurance finance expenses/(income)6,994(3,279)10,273N.A.Taxes and surcharges6,0986,072260.43%Other9,37910,496(1,117)(10.64%)Total222,9331

204、99,50623,42711.74%29Impairment Losses on AssetsThe Bank consistently maintained a proactive and forward-looking approach to risk management,ensuring relatively stable credit asset quality.At the same time,it rigorously implemented a prudent and solid risk provisioning policy to maintain adequate ris

205、k resistance capability.In 2023,the Groups impairment losses on assets totalled RMB106.562 billion,an increase of RMB2.603 billion or 2.50%compared with the prior year.The Groups impairment losses on loans totalled RMB106.114 billion,an increase of RMB13.321 billion or 14.36%compared with the prior

206、year.Please refer to the section“Risk Management Credit Risk Management”and Notes V.9,17 and VI.2 to the Consolidated Financial Statements for more information on loan quality and allowance for loan impairment losses.Income Tax ExpenseIn 2023,the Group incurred income tax of RMB49.237 billion,an inc

207、rease of RMB2.321 billion or 4.95%compared with the prior year.The Groups effective tax rate was 16.66%.Please refer to Note V.10 to the Consolidated Financial Statements for the reconciliation of statutory income tax expense to effective income tax expense.30Financial Position AnalysisThe Bank adhe

208、red to requirements for high-quality development,dynamically adjusted its business strategies and continually improved its business structure,thus achieving steady growth in assets and liabilities.As at the end of 2023,the Groups total assets amounted to RMB32,432.166 billion,an increase of RMB3,538

209、.618 billion or 12.25%compared with the prior year-end.The Groups total liabilities amounted to RMB29,675.351 billion,an increase of RMB3,345.104 billion or 12.70%compared with the prior year-end.The principal components of the Groups consolidated statement of financial position are set out below:Un

210、it:RMB million,except percentagesAs at 31 December 2023As at 31 December 2022ItemsAmount%of totalAmount%of total AssetsLoans and advances to customers,net19,476,87160.05%17,116,00559.24%Investments7,158,71722.07%6,435,24422.27%Balances with central banks2,941,1409.07%2,313,8598.01%Due from and place

211、ments with banks and other financial institutions1,735,1725.35%1,924,4546.66%Other assets1,120,2663.46%1,103,9863.82%Total assets32,432,166100.00%28,893,548100.00%LiabilitiesDue to customers22,907,05077.19%20,201,82576.72%Due to and placements from banks and other financial institutions and due to c

212、entral banks3,955,65913.33%3,622,51613.76%Other borrowed funds1,838,6226.20%1,565,8405.95%Other liabilities974,0203.28%940,0663.57%Total liabilities29,675,351100.00%26,330,247100.00%Note:“Other borrowed funds”includes bonds issued and other borrowings.Loans and Advances to CustomersThe Bank earnestl

213、y fulfilled its responsibilities as a large state-owned bank and optimised its fund supply by increasing its support for the nations key strategies,key areas and weak links in the real economy.Its credit structure was further optimised,and it achieved solid growth in lending scale.As at the end of 2

214、023,the Groups loans and advances to customers amounted to RMB19,961.779 billion,an increase of RMB2,409.018 billion or 13.72%compared with the prior year-end.Specifically,the Groups RMB loans and advances to customers totalled RMB16,703.660 billion,an increase of RMB2,360.690 billion or 16.46%compa

215、red with the prior year-end,while its foreign currency loans amounted to USD460.011 billion,a decrease of USD0.861 billion or 0.19%compared with the prior year-end.Please refer to Note V.17 to the Consolidated Financial Statements for detailed information.The Bank further improved its risk managemen

216、t system,paid close attention to changes in the macroeconomic situation,strengthened risk identification and management in key areas and made greater efforts in the disposal of non-performing assets,thus maintaining generally stable asset quality.As at the end of 2023,the balance of the Groups allow

217、ance for loan impairment losses amounted to RMB485.298 billion,an increase of RMB48.057 billion compared with the prior year-end.The balance of the Groups restructured NPLs amounted to RMB58.968 billion,an increase of RMB30.551 billion compared with the prior year-end.31Loans and Advances to Custome

218、rs by GeographyUnit:RMB million,except percentagesAs at 31 December 2023As at 31 December 2022As at 31 December 2021ItemsAmount%of totalAmount%of totalAmount%of total Corporate loansChinese mainland:RMB10,655,06753.38%8,523,46348.56%7,161,41645.58%Foreign currency353,1631.77%295,1211.68%329,4632.10%

219、Hong Kong(China),Macao(China),Taiwan(China)and other countries and regions2,289,79211.47%2,280,23912.99%2,090,36513.30%Subtotal13,298,02266.62%11,098,82363.23%9,581,24460.98%Personal loansChinese mainland:RMB5,827,12229.19%5,681,11032.36%5,461,64534.76%Foreign currency1,5320.01%1,0890.01%7350.00%Hon

220、g Kong(China),Macao(China),Taiwan(China)and other countries and regions781,3113.91%724,7714.13%631,3704.02%Subtotal6,609,96533.11%6,406,97036.50%6,093,75038.78%37.580 Accrued interest53,7920.27%46,9680.27%37,5800.24%Total loans19,961,779100.00%17,552,761100.00%15,712,574100.00%Note:The comparative f

221、igures for 2021 are not restated.InvestmentsThe Bank closely tracked financial market dynamics,maintained investment activity at a reasonable pace,and dynamically adjusted its investment portfolio structure.As at the end of 2023,the Group held investments of RMB7,158.717 billion,an increase of RMB72

222、3.473 billion or 11.24%compared with the prior year-end.Specifically,the Groups RMB investments totalled RMB5,441.777 billion,an increase of RMB435.599 billion or 8.70%compared with the prior year-end,while foreign currency investments totalled USD242.413 billion,an increase of USD37.223 billion or

223、18.14%compared with the prior year-end.The classification of the Groups financial investment portfolio is shown below:Unit:RMB million,except percentagesAs at 31 December 2023As at 31 December 2022ItemsAmount%of totalAmount%of total Financial assets at fair value through profit or loss550,4217.69%61

224、3,1059.53%Financial assets at fair value through other comprehensive income3,248,11345.37%2,500,21638.85%Financial assets at amortised cost3,360,18346.94%3,321,92351.62%Total7,158,717100.00%6,435,244100.00%32Investments by Issuer TypeUnit:RMB million,except percentagesAs at 31 December 2023As at 31

225、December 2022ItemsAmount%of totalAmount%of total Debt securitiesIssuers in the Chinese mainlandGovernment3,764,32952.58%3,382,24052.56%Public sector and quasi-governments167,1712.34%168,1822.61%Policy banks714,0139.98%609,5869.47%Financial institutions396,7895.54%411,5116.40%Corporates199,0702.78%24

226、7,6773.85%China Orient Asset Management Corporation152,4332.13%152,4332.37%Subtotal5,393,80575.35%4,971,62977.26%Issuers in Hong Kong(China),Macao(China),Taiwan(China)and other countries and regionsGovernments820,42611.46%684,52910.64%Public sector and quasi-governments202,0192.82%124,6381.94%Financ

227、ial institutions267,2183.73%204,3733.17%Corporates138,1331.93%130,3222.02%Subtotal1,427,79619.94%1,143,86217.77%Equity instruments and others337,1164.71%319,7534.97%Total7,158,717100.00%6,435,244100.00%Note:“Equity instruments and others”includes accrual interest.Investments by Currency1,023,1525,44

228、1,77714.29%76.02%372,3205.20%321,4684.49%Unit:RMB million,except percentagesRMBUSDHKDOthersAs at 31 December 2023832,7575,006,17812.94%77.79%295,3464.59%300,9634.68%Unit:RMB million,except percentagesRMBUSDHKDOthersAs at 31 December 202233Top Ten Financial Bonds by Value Held by the GroupUnit:RMB mi

229、llion,except percentagesBond NamePar Value Annual rateMaturity dateImpairment Allowance Bond issued by policy banks in 201922,9473.48%2029-01-08Bond issued by policy banks in 201921,3283.65%2029-05-21Bond issued by policy banks in 202215,6202.82%2027-06-17Bond issued by policy banks in 202315,5732.8

230、7%2028-02-06Bond issued by policy banks in 201815,2694.88%2028-02-09Bond issued by policy banks in 201914,4613.74%2029-07-12Bond issued by policy banks in 202213,4352.50%2027-08-24Bond issued by policy banks in 201913,3253.75%2029-01-25Bond issued by policy banks in 201812,7104.98%2025-01-12Bond iss

231、ued by policy banks in 201912,6423.86%2029-05-20Note:Financial bonds refer to debt securities issued by financial institutions in the bond market,including the bonds issued by policy banks,other banks and non-bank financial institutions,but excluding restructured bonds and PBOC bills.Due to Customer

232、sThe Bank focused on high-quality development,accelerated product and service innovation,optimised the balance between deposit growth and cost control while continually enhancing its financial services offering.It actively expanded its demand deposit base by focusing on key deposit products such as

233、salary payment agency,cash management,quick payment service and social security cards.It also improved the quality of its deposit business by reducing the scale of high-cost deposits such as structured deposits and negotiated deposits,resulting in a steady decrease in the funding cost of RMB deposit

234、s.As at the end of 2023,the Groups due to customers amounted to RMB22,907.050 billion,an increase of RMB2,705.225 billion or 13.39%compared with the prior year-end.Specifically,the Groups RMB due to customers totalled RMB18,282.470 billion,an increase of RMB2,403.036 billion or 15.13%compared with t

235、he prior year-end,while its foreign currency due to customers stood at USD652.940 billion,an increase of USD32.317 billion or 5.21%compared with the prior year-end.34The principal components of due to customers of the Group and its institutions in the Chinese mainland are set out below:Unit:RMB mill

236、ion,except percentagesAs at 31 December 2023As at 31 December 2022ItemsAmount%of totalAmount%of total GroupCorporate depositsDemand deposits5,639,23824.62%5,370,05726.58%Time deposits5,592,46324.41%4,462,32822.09%Structured deposits298,6211.30%328,6021.63%Subtotal11,530,32250.33%10,160,98750.30%Pers

237、onal depositsDemand deposits3,782,33016.51%3,757,37318.60%Time deposits6,662,41729.09%5,384,03426.65%Structured deposits235,7241.03%255,2891.26%Subtotal10,680,47146.63%9,396,69646.51%Certificates of deposits310,2121.35%290,0821.44%Others386,0451.69%354,0601.75%Total22,907,050100.00%20,201,825100.00%

238、Chinese mainlandCorporate depositsDemand deposits4,848,95725.56%4,614,93327.88%Time deposits4,274,94622.53%3,246,54919.62%Structured deposits273,1671.44%299,8391.81%Subtotal9,397,07049.53%8,161,32149.31%Personal depositsDemand deposits3,203,91116.89%3,097,56118.72%Time deposits5,813,42530.64%4,713,8

239、1028.48%Structured deposits210,9401.11%246,8131.49%Subtotal9,228,27648.64%8,058,18448.69%Others348,8711.83%331,0272.00%Total18,974,217100.00%16,550,532100.00%Note:“Others”is inclusive of accrued interest.35Due to Customers by GeographyUnit:RMB million,except percentagesAs at 31 December 2023As at 31

240、 December 2022As at 31 December 2021ItemsAmount%of totalAmount%of totalAmount%of total Corporate depositsChinese mainland:RMB8,734,96738.13%7,532,87837.29%6,949,08938.30%Foreign currency662,1032.89%628,4433.11%746,5014.12%Hong Kong(China),Macao(China),Taiwan(China)and other countries and regions2,13

241、3,2529.31%1,999,6669.90%1,899,89610.47%Subtotal11,530,32250.33%10,160,98750.30%9,595,48652.89%Personal depositsChinese mainland:RMB8,926,07838.97%7,752,56538.38%6,635,79436.58%Foreign currency302,1981.32%305,6191.51%293,9351.62%Hong Kong(China),Macao(China),Taiwan(China)and other countries and regio

242、ns1,452,1956.34%1,338,5126.62%1,157,3826.38%Subtotal10,680,47146.63%9,396,69646.51%8,087,11144.58%Certificates of deposits310,2121.35%290,0821.44%160,4190.88%Others386,0451.69%354,0601.75%299,8711.65%Total deposits22,907,050100.00%20,201,825100.00%18,142,887100.00%Note:“Others”includes accrued inter

243、est.Due to Customers by Currency2,028,39315,879,43410.04%78.60%1,360,104 6.73%933,894 4.63%Unit:RMB million,except percentagesRMBUSDHKDOthersAs at 31 December 20222,131,11018,282,4709.30%79.81%1,475,624 6.44%1,017,846 4.45%Unit:RMB million,except percentagesRMBUSDHKDOthersAs at 31 December 202336Lia

244、bility Quality ManagementThe Bank continually strengthened its liability quality management,actively optimised its liability structure,and achieved steady development of the Groups liability business.The Bank earnestly implemented regulatory requirements on liability quality management.According to

245、its business strategy,risk appetite,and overall business characteristics,the Bank effectively managed the sources,structure,and cost of liabilities to fit the development of its own liability business,with relevant indicators meeting internal and external management requirements.By enhancing the exp

246、ansion of customer deposits,strengthening internal and external pricing management,improving market financing capabilities,appropriately managing the degree of mismatch in terms and currencies of liability business,the Bank continuously improved its liability quality management capability.EquityAs a

247、t the end of 2023,the Groups total equity stood at RMB2,756.815 billion,an increase of RMB193.514 billion or 7.55%compared with the prior year-end.This was primarily attributable to the following factors:(1)In 2023,the Group realised a profit for the year of RMB246.371 billion,among which profit att

248、ributable to equity holders of the Bank amounted to RMB231.904 billion.(2)The Bank pushed forward its external capital replenishment projects in a proactive and prudent manner,successfully issuing RMB30.0 billion of undated capital bonds.(3)As per the 2022 profit distribution plan approved at the An

249、nual General Meeting,a cash dividend of RMB68.298 billion was paid out on ordinary shares.(4)The Bank paid a dividend on its preference shares of RMB5.162 billion and interest on undated capital bonds of RMB10.058 billion.Please refer to the“Consolidated Statement of Changes in Equity”in the Consoli

250、dated Financial Statements for detailed information.Off-balance Sheet ItemsOff-balance sheet items include agency investment and financing services,intermediary services,derivatives,contingent liabilities and commitments,etc.Agency investment and financing services mainly include asset management pr

251、oducts,entrusted loans,agency bond issuance and underwriting.Intermediary services mainly include agency services,asset custody,financial advisory and consulting.Derivatives mainly include foreign currency exchange rates contracts,interest rates contracts,equity contracts,credit contracts,precious m

252、etals and other commodity contracts.Please refer to Note V.16 to the Consolidated Financial Statements for detailed information.Contingent liabilities and commitments include legal proceedings and arbitrations,assets pledged,collateral accepted,credit commitments,capital commitments,operating leases

253、,treasury bond redemption commitments and underwriting obligations,etc.Please refer to Note V.41 to the Consolidated Financial Statements for detailed information.In 2023,the Group adhered to the principle of steady development,continued to enrich off-balance sheet products,strengthened the linkage

254、of on-and off-balance sheet products,and fully leveraged on the characteristics of off-balance sheet business such as extensive marketing and service coverage to continuously improve its comprehensive financial services.It strengthened the coordinated management and comprehensive risk management of

255、off-balance sheet businesses,improved relevant policies and procedures,clarified the off-balance sheet business development strategy,and cemented the foundation for off-balance sheet business development.Cash Flow AnalysisAs at the end of 2023,the balance of the Groups cash and cash equivalents was

256、RMB2,516.725 billion,an increase of RMB425.259 billion compared with the prior year-end.37In 2023,net cash flow from operating activities was an inflow of RMB816.446 billion as compared to an outflow of RMB21.855 billion in the prior year.This was mainly attributable to a net increase in due to cust

257、omers,a net increase in due to banks and other financial institutions and due to central banks whereas it was a net decrease in the prior year.Net cash flow from investing activities was an outflow of RMB539.428 billion,an increase of RMB527.704 billion compared with the prior year.This was mainly a

258、ttributable to an increase in purchase of financial investments.Net cash flow from financing activities was an inflow of RMB119.862 billion,an increase of RMB66.815 billion compared with the prior year.This was mainly attributable to an increase in proceeds from issuance of bonds.Segment Reporting b

259、y GeographyFrom a geographical perspective,the Group operates in three principal regions:the Chinese mainland;Hong Kong(China),Macao(China)and Taiwan(China),and other countries and regions.From a business perspective,the Group provides financial services through six main business segments:corporate

260、banking,personal banking,treasury operations,investment banking,insurance and other operations.A geographical analysis of profit contribution and related assets and liabilities is set forth in the following table:Unit:RMB millionChinese mainlandHong Kong(China),Macao(China)and Taiwan(China)Other cou

261、ntries and regionsEliminationGroupItems2023202220232022202320222023202220232022 Net interest income393,064401,92748,90338,65822,45118,3852,127296466,545459,266Non-interest income101,00084,58455,86438,8427,3337,009(6,604)(3,240)157,593127,195Including:net fee and commission income62,85259,07913,09613

262、,3855,2234,278(2,306)(1,852)78,86574,890Operating expenses(176,593)(166,352)(40,466)(27,679)(8,849)(8,043)2,9752,568(222,933)(199,506)Impairment losses on assets(88,124)(89,949)(11,086)(11,360)(7,352)(2,650)(106,562)(103,959)Profit before income tax229,858230,63753,66938,67913,58314,701(1,502)(376)2

263、95,608283,641 As at the year-endAssets26,470,19523,377,0295,228,0404,949,8672,372,7952,347,203(1,638,864)(1,780,551)32,432,16628,893,548Liabilities24,246,29721,329,3654,777,8394,509,2832,288,0512,271,615(1,636,836)(1,780,016)29,675,35126,330,247As at the end of 2023,total assets3 of the Banks Chines

264、e mainland segment amounted to RMB26,470.195 billion,an increase of RMB3,093.166 billion or 13.23%compared with the prior year-end,representing 77.69%of the Groups total assets.In 2023,this segment recorded a profit before income tax of RMB229.858 billion,a decrease of RMB0.779 billion or 0.34%compa

265、red with the prior year,representing 77.37%of the Groups profit before income tax.3 Figures for segment assets,segment profit before income tax and their respective proportions are prior to intragroup elimination.38As at the end of 2023,total assets of the Hong Kong(China),Macao(China)and Taiwan(Chi

266、na)segment amounted to RMB5,228.040 billion,an increase of RMB278.173 billion or 5.62%compared with the prior year-end,representing 15.34%of the Groups total assets.In 2023,this segment recorded a profit before income tax of RMB53.669 billion,an increase of RMB14.990 billion or 38.75%compared with t

267、he prior year,representing 18.06%of the Groups profit before income tax.As at the end of 2023,total assets of the other countries and regions segment amounted to RMB2,372.795 billion,an increase of RMB25.592 billion or 1.09%compared with the prior year-end,representing 6.97%of the Groups total asset

268、s.In 2023,this segment recorded a profit before income tax of RMB13.583 billion,a decrease of RMB1.118 billion or 7.60%compared with the prior year,representing 4.57%of the Groups profit before income tax.Operating income for the main business segments of the Group is set forth in the following tabl

269、e:Unit:RMB million,except percentages20232022ItemsAmount%of totalAmount%of total Commercial banking business577,57392.54%558,59395.25%Including:Corporate banking254,75840.82%223,35938.09%Personal banking272,23643.62%244,95041.77%Treasury operations50,5798.10%90,28415.39%Investment banking and insura

270、nce28,2364.52%11,9632.04%Others and elimination18,3292.94%15,9052.71%Total624,138100.00%586,461100.00%Please refer to Note V.44 to the Consolidated Financial Statements for detailed information related to the Groups other operating results and financial position in terms of its geographic segment an

271、d business segments categories.Critical Accounting Estimates and JudgementsThe accounting estimates and judgements made by the Group will generally affect the carrying amounts of assets and liabilities of the next financial year.These estimates and judgements are continually evaluated and are based

272、on historical experience,expectations of future events that are believed to be reasonable under the circumstances and other factors.Management believes that the accounting estimates and judgements have properly reflected the Banks operating environment.Please refer to Notes II and III to the Consoli

273、dated Financial Statements for detailed information related to the Banks accounting policies and accounting estimates.39Fair Value MeasurementMovement of Financial Instruments Measured at Fair ValueUnit:RMB millionItemsAs at 31 December 2023As at 31 December 2022Change Due from and placements with b

274、anks and other financial institutions at fair value18,12612,3335,793 Financial assets at fair value through profit or loss Debt securities336,184398,100(61,916)Equity instruments112,434112,582(148)Fund investments and other101,803102,423(620)Loans and advances to customers at fair value718,776587,25

275、6131,520Financial assets at fair value through other comprehensive income Debt securities3,215,9832,473,380742,603 Equity instruments and other32,13026,8365,294Derivative financial assets146,750152,033(5,283)Derivative financial liabilities(135,973)(135,838)(135)Due to and placements from banks and

276、other financial institutions at fair value(3,798)(3,798)Due to customers at fair value(47,657)(36,701)(10,956)Bonds issued at fair value(2,118)(2,080)(38)Financial liabilities held for trading(54,264)(53,868)(396)The Bank has put in place a sound internal control mechanism for fair value measurement

277、.In accordance with the Regulatory Guidelines on Valuation of Financial Instruments in Commercial Banks,Guidelines on Market Risk Management in Commercial Banks,CAS and IFRS Accounting Standards,with reference to the Basel Capital Accord,and drawing on the best practices of leading international ban

278、ks regarding valuations,the Bank formulated the Valuation Policy of Financial Instrument Fair Values of Bank of China Limited to standardise the fair value measurement of financial instruments and enable timely and accurate financial information disclosure.Please refer to Note VI.5 to the Consolidat

279、ed Financial Statements for detailed information related to fair value measurement.Other Financial InformationThere are no differences in the equity and profit for the year of the Group prepared in accordance with IFRS Accounting Standards to those prepared in accordance with CAS.Please refer to Sup

280、plementary Information I to the Consolidated Financial Statements for detailed information.40BUSINESS REVIEWOverview of Strategic ProgressIn 2023,the Bank earnestly implemented national decisions and plans and advanced the execution of the 14th Five-Year Plan,thus achieved sound execution of its str

281、ategy.It continued to apply the new development philosophy fully,faithfully and in all fields of endeavour.It also took necessary steps to deepen supply-side structural reform in the financial sector.The Bank made contribution to smooth domestic circulation and the“dual-circulation”of domestic and i

282、nternational markets,and stepped up financial support for major strategies,key areas and weak links,and implemented the“five major tasks”of promoting technology finance,green finance,inclusive finance,pension finance,and digital finance,and made constant efforts to contribute to the high-quality dev

283、elopment of the real economy.Technology FinanceThe Bank placed great importance on providing financial support for the nations technological self-reliance and self-improvement,actively promoted high-level planning,high-standard services and high-quality development in technology finance,and utilised

284、 comprehensive approach to intensify the support for the technology finance.Vigorously expanding its customer base across the technology sector with a focus on batch customer acquisition scenarios.The Bank strengthened full lifecycle services for key customer groups,including high-tech enterprises,t

285、ech-oriented small and medium-sized enterprises(SMEs)and specialised and sophisticated enterprises.It targeted customer acquisition from sources including national and provincial laboratories,key scientific research institutes,and universities.The Bank analysed the characteristics of core customer g

286、roups such as technological enterprises,utilised digital methods to create customer profiles,and implemented differentiated precision marketing based on the refined classification of customer groups.Popularising specialised technology finance products and optimising the supply of financial products

287、and services.Aligning with the needs of technological enterprises,the Bank continuously refined and promoted credit products,including innovative“bonus point”loans,intellectual property pledge loans,and loans to specialised and sophisticated SMEs,thus supporting major technological breakthroughs.It

288、established credit review and approval procedures and a credit assessment model tailored to the characteristics of technological enterprises,and leveraged artificial intelligence,big data and other information technologies to improve its credit risk assessment capabilities.41 Enhancing its comprehen

289、sive service system and supporting the growth of technological enterprises.Focusing on key industries and customer groups,the Bank established a robust business system for technology asset management and promoted innovation in technology insurance and technology leasing.It increased investments in t

290、echnological enterprises and provided a range of financial services,including investment banking and asset management services,thus providing enterprises with full-lifecycle,seamless and diversified support.As at the end of 2023,the Bank had provided around RMB1.47 trillion of credit support4 to app

291、roximately 68,000 technological enterprises,with other comprehensive financial services amounting to over RMB610.0 billion in value.Deepening cooperation between banks and governments and actively building a technology finance ecosystem.The Bank introduced the BOC-Torch“Innovative Bonus Point Loan”i

292、n collaboration with the Ministry of Science and Technology,launched“Enter the High-Tech Zone”campaign and continually expanded the coverage of its technology finance ecosystem,so as to enhance the brand image of“BOC Technology Innovation+”.Green FinanceIn strict adherence to the national decision a

293、nd plan of“carbon peak and carbon neutrality”,the Bank fully implemented its green development strategy with the goal of becoming the bank of choice for green finance services.It optimised its green finance governance structure and refined supporting measures for green finance,realising a healthy an

294、d rapid growth in green finance business.In 2023,the Bank received a number of awards for green finance from Global Finance,Asiamoney,Financial Times,China Securities Journal and other domestic and overseas magazines.Rapid growth in green credit.The Bank participated in benchmark green projects with

295、 global influence and ranked first among Chinese banks in Bloombergs“Global Sustainability-Linked Loans”and“Global Green UoP Loans”5 rankings.It served as global co-lead bank for Central Asias largest single wind power project and played a key role in the first environmental,social and governance(ES

296、G)loan for a mainstream oil and gas company in the Middle East.Furthermore,the Bank introduced a sustainability-linked loan that innovatively incorporates biodiversity conservation indicators.As at the end of 2023,the Banks domestic green credit balance6 reached RMB3,106.7 billion,a year-on-year inc

297、rease of 56.34%.4 The figure is calculated based on the statistical standards reported to NFRA.Technology loans include loans,trade finance and discounted bills.5 Bloombergs data refer to green loans.6 The figure is calculated based on the statistical standards for“green credit”by NFRA.42 Leading po

298、sition in the green bond market.In 2023,the Bank issued USD2.4 billion in overseas green financial bonds and RMB30.0 billion in domestic green financial bonds,becoming the most active Chinese issuer of sustainability bonds.It also successfully issued the worlds first green bonds themed around the Be

299、lt and Road Initiative,as well as the worlds first USD-denominated sustainability-linked loan bond.The Bank underwrote RMB341.658 billion in domestic green bonds,ranking first in the interbank market,as well as USD29.760 billion of overseas green bonds,placing first among Chinese peers in Bloombergs

300、“Global Offshore Green Bonds”rankings.As at the end of 2023,the Banks green bond investments exceeded RMB100.0 billion,ranking first in the National Association of Financial Market Institutional Investors(NAFMII)s“List of Investors in Green Debt Financing Instruments”.Abundant and diversified green

301、products and services.The Bank has established the“BOC Green+”global brand and launched more than 10 green financial products and services across five categories,covering deposits,loans,bonds,consumption and other comprehensive services,etc.In 2023,the Bank granted first sustainable development-link

302、ed syndicated loan in Chinese shipping industry,and opened a trading account with the National Greenhouse Gas Emissions Reduction Trading System.The“BOCHK Greater Bay Area Climate Transition ETF(Trading Open-end Index Fund)”was listed on the Main Board of the Hong Kong Stock Exchange,and the Bank ac

303、hieved green RMB trade finance withdrawals for the first time in Thailand market.Promoting green development with comprehensive green finance servicesBOC Wealth Management offered 17 green finance themed products,with a cumulative product volume of approximately RMB51.371 billion.BOCIM developed gre

304、en and ESG mutual fund products under the three categories of low-carbon and green development concept funds,social responsibility funds,and ESG concept funds,achieving a scale of RMB3.214 billion(calculated with reference to the ESG fund classification system of CITIC Securities).BOC Insurance deve

305、loped 109 green insurance products,assuming insurance liabilities of RMB272.2 billion.BOCLs green assets stood at RMB24.011 billion,accounting for about 43.79%of its total leasing assets.BOC Aviation ranked first among the aircraft leasing companies in Asia in terms of the value of owned aircraft,an

306、d owned aircraft using the latest green technology.BOCI underwrote 11 green and sustainability-linked bonds,totalling an equivalent of USD4.215 billion in scale.BOCI China underwrote green bonds totalling RMB30.175 billion in scale.BOC Asset Investments proprietary investment in green finance projec

307、ts stood at RMB33.539 billion,accounting for 42.54%of its investment portfolio.BOC-Samsung Lifes investment in green finance stood at RMB4.247 billion,including debt investment plans,equity funds,bonds and stocks.Green Asset ManagementGreen InsuranceGreen LeasingGreen BondsGreen InvestmentNote:The a

308、bove figures are as of the end of 2023.43 Active participation in green finance collaboration.The Bank actively participated in global green governance,contributing its expertise to addressing climate change.It carried out climate risk management and disclosure under the framework of the United Nati

309、ons Principles for Responsible Banking(PRB)and the Task Force on Climate-related Financial Disclosures(TCFD),published the Groups first green finance report,and participated in PRB-related exchange activities.It fulfilled its role as the co-chair of the transition finance taskforce and the Green Fin

310、ancial Product Innovation Taskforce of the Green Investment Principle(GIP)for the Belt and Road Initiative.The Bank was re-elected as vice-chair of the China Council of the Sustainable Markets Initiative(SMI)and jointly launched the“Green Development Investment and Financing Partnership”and the“Belt

311、 and Road”Green Development Beijing Initiative with Chinese and overseas partners,serving as their sole commercial bank.It also contributed to the China-UK Green Finance Working Group and advanced bilateral green finance cooperation.In addition,the Bank played an active role in formulating standards

312、 for green credit assessment,transition finance,carbon accounting and the information disclosure of green bonds duration,as well as exploratory research work organised by regulatory authorities,industry associations and other organisations.It also signed a strategic cooperation agreement with the Na

313、tional Forestry and Grassland Administration.The Bank,as an institutional member of the China Green Bond Standard Committee,actively participated in its organised events and assisted in promoting the healthy development of the green bond market.It co-sponsored China Corners event on green finance du

314、ring the 28th session of the Conference of the Parties to the United Nations Framework Convention on Climate Change(COP28).It published the Research Report on Green Finance Practice of the Belt and Road Initiative,which was included in the list of outcomes of the Third Belt and Road Forum for Intern

315、ational Cooperation.44 Green finance capacity building.The Bank pushed forward the implementation of its green finance talent development system for the 14th Five-Year Plan period,covering approximately 10,000 individuals across three levels and over six themes.It developed an online training system

316、 for green finance,offering around 100 courses across eight themes,with over one million people engaged in watching and learning.It held green finance product innovation competition,performance competition and labour competition,organised a series of performance evaluation and selection activities t

317、o recognise outstanding achievements,outstanding individuals and outstanding teams,and took numerous measures to constantly improve employees green finance competence and performance.The Bank continued to enhance the competitiveness of its domestic institutions in green finance,selected 20 tier-1 an

318、d tier-2 branches as model institutions in green finance during the year,and established a total of 310 featured green finance outlets.The Bank encouraged employees to follow the Initiative and Guide on Green Actions of Bank of China,fostering the green development concept.It also launched publicati

319、ons themed on green finance and ESG to inform customers about the latest industry trends.Inclusive FinanceThe Bank continued to uphold the concept of“finance for the people”and remained committed to serving the real economy.It focused on the integrated financial needs of micro and small-sized market

320、 entities,urban and rural residents,and other inclusive finance customers,promoting the high-quality development of inclusive finance business.Continually expanding business volume and service coverage,and comprehensively improving service quality.The Bank integrated online and offline efforts to ex

321、tend the reach of its inclusive finance services.It continually upgraded online service channels such as the“BOC Inclusive Finance”app and“BOC E-Cooperation”app to provide customers with online products and services,and increased the number of its featured outlets for inclusive finance to over 2,800

322、.As at the end of 2023,the Banks outstanding inclusive finance loans7 to micro and small-sized enterprises reached RMB1,758.543 billion,growing by 43.17%compared with the prior year-end and outpacing the Banks overall loan growth rate,while the number of customers surpassed 1.07 million.The average

323、interest rate of new inclusive finance loans to micro and small-sized enterprises was 3.54%,reflecting the larger interest rate concessions made by the Bank to borrowers within the real economy.The asset quality of loans to micro and small-sized enterprises remained stable and controllable.7 Inclusi

324、ve finance loans granted to micro and small-sized enterprises are measured in accordance with the Notice of the General Office of China Banking and Insurance Regulatory Commission on Further Improving the Financial Service Quality for Micro and Small-sized Enterprises in 2023(Yin Bao Jian Ban Fa 202

325、3 No.42).45 Benefitting the people by helping to stabilise and expand employment,and ensure peoples livelihood.The Bank fortified its long-acting mechanisms to stabilise and promote employment.In 2023,it granted more than RMB270.0 billion of special-purpose loans to help over 47,000 micro and small-

326、sized enterprises stabilise and expand employment.It provided services for self-employed individuals,entrepreneurs and new urban residents,and launched special activities such as“Benefitting Merchants Driving Consumption”and“Providing Resources to Support Startups”,thus expanding its financial suppo

327、rt service system.Serving rural revitalisation and helping to build up Chinas strength in agriculture.The Bank expanded its financial services coverage in key counties receiving assistance for rural revitalisation,with loan growth rates in these counties reaching 32.44%and surpassing the Banks total

328、 loan growth rate.It provided support for national food security and offered credit services for agricultural and rural infrastructure.The Bank also provided financial services for integrated culture and tourism projects,and launched featured financial services to support rural revitalisation and pr

329、omote consumption growth.Giving full play to the Groups synergies and providing comprehensive inclusive finance services.Capitalising on the Groups comprehensive operations,the Bank established a comprehensive inclusive finance system covering a wide range of services,including payment,credit,saving

330、s,cross-border business,insurance,wealth management,and direct financing.Pension FinanceThe Bank actively served the national strategy of responding to Chinas aging population,promoted supply-side structural reform in the financial sector,and met peoples growing needs for elderly care by focusing on

331、 the four areas of pension finance,personal pension finance,pension industry finance and silver scenario ecosystem building.Serving the multi-level and multi-pillar pension insurance system.The Bank continued to optimise services in terms of national social security fund,basic pension insurance,ente

332、rprise annuities,occupational annuities,and personal pension funds.It upgraded the“Pension All-in-One”feature on its mobile banking,offering a unified view for individual queries that includes the first-pillar basic pension insurance,second-pillar corporate annuities,and third-pillar individual pens

333、ion funds.46 Enhancing supply and demand in elderly care services.In terms of service demand-side,the Bank built a comprehensive system for personal pension financial products,enriching such products as pension savings,pension wealth management and pension funds.It upgraded the mobile banking“Silver Zone”to create a shelf-like experience for financial products.It also enriched the merchant system