Ping An Bank

2013 3Q Report Release Oct 2013

I. Financial Highlights

Content

II. Business Operations

III. Looking Ahead

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I. Financial Highlights

1. Profit and Scale

2. Asset Quality and Efficiency

3. Income Statement

4. Regulatory Indicators

1. Profit and Scale

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(In RMB’100 million) Jan-Sep 2013 Jan-Sep 2012 YoY

Change Change %

1. Net Profit 116.96 103.46 13.50 13.05%

30 Sep 2013 31 Dec 2012 YTD

Change Change %

2. Total Assets 18,556 16,065 2,491 15.50%

Including: Total Loans 8,326 7,208 1,118 15.52%

Including: Retail Loans (including CC) 3,242 2,258 984 43.57%

3. Total Liabilities 17,607 15,217 2,390 15.70%

Including: Total Deposits 12,524 10,211 2,313 22.65%

Including: Corporate Deposits 10,399 8,399 2,000 23.80%

4. Shareholders’ Equity 949 848 101 11.93%

2. Asset Quality and Efficiency

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(In RMB’100 million) 30 Sep 2013 31 Dec 2012 YTD

1. Asset Quality

NPL Balance 80.32 68.66 16.98 %

NPL Ratio 0.96% 0.95% +0.01 pc point

Provision to Loan Ratio 1.79% 1.74% +0.05 pc point

Provision Coverage Ratio 186.02% 182.32% +3.70 pc point

Jan-Sep 2013 Jan-Sep 2012 YoY

2. Return on Assets

Average Return on Total Assets (annualized) 0.90% 1.00% -0.10 pc point

Weighted Average Return on Equity (annualized) 16.93% 17.03% -0.10 pc point

3. Net Interest Spread 2.07% 2.20% -0.13 pc point

4. Net Interest Margin 2.23% 2.38% -0.15 pc point

5. Cost / Income Ratio 39.57% 38.56% +1.01 pc point

Notes:

1. The decrease of ROE was mainly due to the impact of additional provision, and it would have increased YoY if the additional provision had been

consistent with that in the same period of 2012.

2. The increase of CIR was mainly caused by the raising of strategy investment for supporting the operation transformation and outlets expansion.

3. Income Statement

(In RMB’100 million)

Jan-Sep 2013 YoY

Amount Proportion Amount

Change

Amount

Change %

Proportion

Change

Operating Income 373.45 100% 78.14 26.46%

Net Interest Income 290.56 77.80% 44.96 18.31% -5.37%

Net Non-interest Income 82.89 22.20% 33.18 66.71% +5.37%

Including: Net Fee Income 74.15 19.86% 32.60 78.46% +5.79%

Expenses 177.12 37.55 26.90%

Operating Fees 147.76 39.57% 33.89 29.76% +1.01%

Less: Asset Impairment Loss 43.26 21.11 95.30%

Net Profit 116.96 13.50 13.05%

Net Profit Attributable to Parent

Company 116.96 14.59 14.25%

Basic / Diluted EPS (in RMB) 1.43 0.18 14.25%

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4. Regulatory Indicators

Standard Level 30 Sep 2013 31 Dec 2012

Liquidity Ratio (RMB and Foreign Currency) ≥25% 46.48% 51.99%

Loan / Deposit Ratio (including bills, RMB

and Foreign Currency) ≤75% 66.53% 70.64%

NPL Ratio ≤5% 0.96% 0.95%

According to

Administrative

Measures for the

Capital of

Commercial Banks

(Trial)

Capital Adequacy Ratio ≥8.5% 8.91% N/A (note)

Tier 1 Capital Adequacy

Ratio ≥6.5% 7.43% N/A (note)

Core Tier 1 Capital

Adequacy Ratio ≥5.5% 7.43% N/A (note)

At the end of the reporting period, the major regulatory indicators of the Bank complied to the regulatory requirements.

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Note: The Administrative Measures for the Capital of Commercial Banks (Trial) has been implemented in the Bank since Jan 1st, 2013.

II. Business Operations 1. Rapid Growth of Scale and Profit

2. Remarkable Optimization of Business Structure

3. Fully Improvement of Profitability

4. Robust Growth in New Business and Innovation

5. Smooth Progress of Incentive System

6. Reinforcement of Commissioning and Rrisk Control

8,508 9,148 9,496 9,354

0

5,000

10,000

15,000

2011 1Q2012 2Q2012 3Q2012

1. Rapid Growth of Scale and Profit

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(In RMB’100

million)

30 Sep 2013 YTD

Balance Composi-

tion

Balance

Change

Balance

Change %

Composi-

tion

Change

Corporate

Deposits 10,399 83.0% 2,000 23.80% +0.7%

Retail

Deposits 2,125 17.0% 313 17.29% -0.7%

Total

Deposits 12,524 100% 2,313 22.65% -

The deposits have grown steadily in 2013, in contrast to the

decrease in 3Q2012 QoQ, 3Q2013 maintained consistent growth.

The deposits at the end of 3Q2013 increased by 22.65% YTD, and

ranked in the top among peers.

The average deposits balance of the first three quarters was RMB

1,110.7 bn with an increase of 21.79% and RMB 198.7 bn as

compared with the average deposits balance of 2012.

Quarterly growth trend of deposits in 2013

10,211 10,645 11,754

12,524

0

5,000

10,000

15,000

2012 1Q2013 2Q2013 3Q2013

Quarterly growth trend of deposits in 2012

1. Rapid Growth of Scale and Profit (Cont.)

• During the reporting period, the accumulated PPOP increased by 26% YoY, and the PPOP of each quarters had increased steadily QoQ, which indicated the remarkable growth trend.

Remarkable Increase of

PPOP

• During the reporting period, the accumulated fee income was RMB 8,289 mn with an increase of 66.71% YoY, and accounted for 22.2% in the operating income with an increase of 5.4 pc points, which indicated the shrinkage of the gap between the leading practice of peers.

Robust Growth of

Fee Income

• The credit card business has increased rapidly and steadily. During the reporting period, profit before tax has increased of 121% YoY, while fee income has increased of 123%. The total transaction amounted to RMB 358.7 bn with an increase of 148%, including the continuous rapid growth of online transactions which has increased of 213%.

• The balance of auto loans was RMB 43.1 bn with an increase of RMB 22 bn YTD; In the third quarter, the market shares of auto finance continued to maintain No. 1 of China, and the superiority had been further increased.

Rapid Growth of

Credit Card and Auto Finance

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2. Remarkable Optimization of Business Structure

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•The high yield businesses of Micro Loans / New One Loan and Auto finance had a rapid growth, the balance of which at the end of 3Q2013 increased by 65% and 104% YTD, while the total balances accounted for 18%;

•In the total increment of loans during the reporting period, the increment from the high yield businesses of Micro Loans / New One Loan and Auto finance accounted for 50%, while the increment from the low yield businesses of Discounted Bills and Mortgage loans was negative.

Structure of Assets

•The structure of liabilities had been optimized obviously with the rapid growth of customer deposits, loan to deposit ratio decreased 9 pc points YoY, and the growth of basic bank liabilities outclassed that of the inter-bank liabilities.

Structure of Liabilities

Changes of the loan structure in the first three quarters

(In RMB’100 million) 30 Sep 2013 Composition YTD

Balance Change Composition Change

Total loans 8,326 1,118

Corporate

Loans

General Corporate Loans 5,026 60% 181 -7%

Discounted Bills 58 1% -46 -1%

Subtotal 5,084 61% 135 -8%

Retail Loans

General Retail Loans 830 10% -79 -3%

Micro Loans / New One Loan 1,056 13% 416 5%

Auto Finance 431 5% 220 2%

Credit Card Receivable 925 11% 428 4%

Subtotal 3,242 39% 983 8%

3. Fully Improvement of Profitability

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• The bid management of credit lines has been implemented, and the loan which has been approved by the risk lines with higher pricing had the priority, on the premise no lower than the floor rate;

• In 3Q2013, customer loan and advances (excluding bills) had the average yield of 6.94% and increased by 25bp QoQ.

Increase of Loan Interest

Rate

• Deposit-to-Loan Spread: In 3Q2013, it had been increased to 4.57%, i.e. +26bp QoQ;

• NIS and NIM: In 3Q2013, NIS and NIM increased 10bp QoQ, due to the higher yield of interest rate and compressing the inter-bank assets.

Improvement of the Spread

4.14% 4.11%

4.31%

4.57%

4.00%

4.30%

4.60%

4.90%

4Q2012 1Q2013 2Q2013 3Q2013

2.30%

2.18% 2.21%

2.31%

2.15%

2.25%

2.35%

2.45%

4Q2012 1Q2013 2Q2013 3Q2013

2.13% 2.01%

2.04%

2.14%

1.95%

2.05%

2.15%

2.25%

4Q2012 1Q2013 2Q2013 3Q2013

Deposit-to-Loan Spread Net Interest Spread Net Interest Margin

• ROA and ROE had been improved gradually. The yield would have been increased obviously if the impact of the significant increase of the provision had been eliminated. Higher Yield

• Enhancement of the quota management for risk assets: The strict weighted quota management for risk assets had been implemented continuously, and the improvement of the level of net return on risk assets had been closely tracked;

• Enhancement of the management for off-balance risk assets: The requirement of Minimum margin ratio for off-balance risk assets had been set up so as to increase the risk assets efficiency within the entire bank.

Improvement of Capital Efficiency

3. Fully Improvement of Profitability (Cont.)

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0.94%

0.84% 0.88% 0.90%

0.80%

0.85%

0.90%

0.95%

1.00%

4Q2012 1Q2013 2Q2013 3Q2013

16.78%

15.61%

16.40%

16.93%

15.00%

16.00%

17.00%

18.00%

4Q2012 1Q2013 2Q2013 3Q2013

Average Return on Total Assets

(annualized)

Weighted Average Return on Equity

(annualized)

4. Robust Growth in New Business and Innovation

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•The total amount of investment and financing amounted to RMB 171.2 bn; the net value of trusteeship amounted to RMB 759.1 bn and increased RMB 331.9 bn YTD. The investment banking business contributed the derivative deposit amounted to RMB 26.7 bn.

•The accumulated fee business income of investment banking business amounted to RMB 1.14 bn; The fee business income of trusteeship amounted to RMB 410 mn with an increase of RMB 250 mn YoY.

Investment Banking Business

•Rapid growth of assets and liabilities business: within half a year after the establishment of BU of Energy, Real estate, the total deposits broke through RMB 22 bn and the total loan amounted to RMB 31 bn;

•The fruitful development of fee business: the fee business income from the BU of Energy, Real estate amounted to RMB 340 mn, by gradual enriching of products;

•The professional operation with obvious superiority of pricing.

BU of Industries

•The Bank propelled the whole industrial chain of gold and the brand of “Ping An Gold” had

been established, the gold lease business made a new breakthrough and the market influence significantly increased;

•The income from the bill spreads had improved month by month, while the balance of bills decreased as compared to the end of June, indicating the significant raising of bills turnover of the entire bank.

Treasury and Inter-bank Business

•“Dai Dai Ping An” business card: as the comprehensive finance resolution tailored for SME, it

had been successfully and rapidly promoted;

•Internet finance: The overall business strategy of “with open-source in the front and ordinating

in the back, to propel and interact with various entities to set up the comprehensive financial

service platform” had been established. Those businesses of e-government, e-business, Shou

yin bao, and Mobile Integrated Terminal for SME made a great progress.

Products Innovation

5. Smooth Progress of Incentive System

“No pain no gain”: the prolificacy had been fully released and the positivity of making a profit of the employees had been mobilized as well, so as to create more value to the Bank and improve the capital efficiency.

“Overall coverage”: the appraisal mechanism had been implemented

through out all the segments from the headquarters, branches, sub-branches to customer managers in order to avoid invalid investment; the operating limits had been broken thus the branches and BU could develop the market according to the regional features actively.

To balance the Relationship: the service quality of back-office employees had been associated with the marketing performance of frontline to ensure the cooperation and smoothness, so as to sharpen and quicken the market reactions.

To provide the competitive salary so as to maintain the teams and keep the attractions of the new bank.

To encourage the branches to achieve the targets of deposits’ growing

through assessment and incentive mechanism

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6. Reinforcement of Commissioning and Rrisk

Control

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• Based on the clearly oriented resource allocation and incentive system, the relevant restriction mechanism had been established and improved, focusing on the commissioning level as well as the implementation and effects of strategy investment, so as to ensure that the resources had been consumed effectively and the strategies of the bank and ideas of operating had been pursued vigorously.

Reinforcement of

Commissioning Control

• In 3Q2013, a greater efforts had been devoted upon credit asset management and recovery works, by fully risk control and management, strictly limiting of new loan risks, enhanced control of stock assets, strengthened post-loan reviewing and reinforced recovery, so as to ensure the active control of NPL.

Reinforcement of Risk Control

III. Looking Ahead

Looking Ahead

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Prepare for the business reserves in next year in advance

Enhance the adjustment of business structure continuously

Improve the efficiency of resource utilization effectively

Reduce the risk of Non-performing assets industriously

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Thank you!

IR Contact

PABIR@pingan.com.cn