Harbin Bank Co Ltd (6138) 19 March 2014

8/21/2019 Harbin Bank Co Ltd (6138) 19 March 2014

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IMPORTANT: If you are in doubt about any of the contents of this prospectus, you should obtain independentprofessional advice.

Harbin Bank Co., Ltd.***

(A joint stock company incorporated in the Peoples Republic of China with limited liability)

GLOBAL OFFERING

Number of Offer Shares in the Global Offering : 3,023,570,000 H Shares (comprising2,748,700,000 New Shares to be offered by theBank and 274,870,000 Sale Shares to be offeredby the Selling Shareholders, subject to theOver-allotment Option)

Number of Offer Shares in the InternationalOffering

: 2,721,212,000 H Shares (subject to reallocationand the Over-allotment Option)

Number of Hong Kong Offer Shares : 302,358,000 H Shares (subject to reallocation)

Maximum Offer Price : HK$3.33 per H Share

Nominal Value : RMB1.00 per H Share

Stock Code : 6138

Joint Sponsors

Joint Global Coordinators

Joint Bookrunners and Joint Lead Managers

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limitedtake no responsibility for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim anyliability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this prospectus.A copy of this prospectus, having attached thereto the documents specified in Appendix IX Documents Delivered to the Registrar of Companiesand Available for Inspection, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Hong KongCompanies (Winding up and Miscellaneous Provisions) Ordinance. The Securities and Futures Commission and the Registrar of Companies inHong Kong take no responsibility for the contents of this prospectus or any other document referred to above.The Offer Price is expected to be fixed by agreement between the Joint Global Coordinators (on behalf of the Underwriters) and us on the PriceDetermination Date. The Price Determination Date is expected to be on or around Tuesday, 25 March 2014 and, in any event, not later than Friday,28 March 2014. The Offer Price will be no more than HK$3.33 per Offer Share and is currently expected to be no less than HK$2.89 per OfferShare unless otherwise announced. If, for whatever reason, the Offer Price is not agreed by Friday, 28 March 2014, between the Joint GlobalCoordinators (on behalf of the Underwriters) and us, the Global Offering (including the Hong Kong Public Offering) will not proceed and willlapse.

We are incorporated, and substantially all of our businesses are located, in the PRC. Potential investors should be aware of the differences in thelegal, economic and financial systems between the mainland of the PRC and Hong Kong and that there are different risk factors relating toinvestment in PRC-incorporated businesses. Potential investors should also be aware that the regulatory framework in the PRC is different from theregulatory framework in Hong Kong and should take into consideration the different market nature of our Shares. See Risk Factors, Supervisionand Regulation, Appendix V Summary of Principal Legal and Regulatory Provisions and Appendix VI Summary of Articles ofAssociation.The Joint Global Coordinators (on behalf of the Underwriters) may, with our consent, reduce the number of Offer Shares being offeredunder the Global Offering and/or the indicative offer price range stated in this prospectus (which is HK$2.89 to HK$3.33 per H Share) atany time on or prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. In such a case, notices ofthe reduction in the number of Offer Shares and/or the indicated offer price range will be published in the South China Morning Post (inEnglish) and Hong Kong Economic Times (in Chinese). Such notice will also be available on the websites of the Hong Kong Stock Exchangeat www.hkexnews.hk and our Company at www.hrbb.com.cn. See Structure of the Global Offering and How to Apply for Hong KongOffer Shares.The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the JointGlobal Coordinators (for itself, and on behalf of the Underwriters) if certain grounds arise prior to 8:00 a.m. on the Listing Date. SeeUnderwriting Underwriting Arrangements and Expenses Hong Kong Public Offering Grounds for Termination.

* For identification purposes only.

** Harbin Bank Co., Ltd. is not an authorised institution within the meaning of the Banking Ordinance (Chapter 155 of the Laws of Hong Kong),not subject to the supervision of the Hong Kong Monetary Authority, and not authorised to carry on banking/deposit-taking business in Hong Kong.

19 March 2014


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EXPECTED TIMETABLE(1)

Latest time to complete electronic applications under White

Form eIPO service through the designated website

www.eipo.com.hk(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11:30 a.m. on Monday, 24 March 2014

Application lists open(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11:45 a.m. on Monday, 24 March 2014

Latest time to lodge WHITEa nd YELLOW

Application Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on Monday, 24 March 2014

Latest time to give electronic application

instructions to HKSCC(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on Monday, 24 March 2014

Latest time to complete payment of

White Form eIPO applications by

effecting internet banking transfer(s)

or PPS payment transfer(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on Monday, 24 March 2014

Application lists close . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on Monday, 24 March 2014

Expected Price Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 25 March 2014

Announcement of the Offer Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 28 March 2014

Announcement of:

the level of application in the Hong Kong Public Offering;

the level of indication of interest in the International Offering; and

the basis of allocation of the Hong Kong Offer Shares to be published

(a) in the South China Morning Post (in English) and Hong Kong

Economic Times (in Chinese); and

(b) on our website at www.hrbb.com.cn(5) and the website of the Hong

Kong Exchanges and Clearing Limited at www.hkexnews.hk(6) on orbefore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 28 March 2014

Results of allocations in the Hong Kong

Public Offering (with successful applicants

identification document numbers where appropriate)

to be available through a variety of channels

(see How to Apply for Hong Kong Offer Shares

11. Publication of Results) from . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 28 March 2014

Result of allocations in the Hong Kong Public Offering

(with successful applicants identification document numbers where

appropriate)

will be available at www.iporesults.com.hk

with a search by ID function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 28 March 2014

H Share certificates in respect of wholly or partially successful

applications to be dispatched or deposited into CCASS on or before(7) . . . . . . . Friday, 28 March 2014

White Form e-Refund payment instructions/refund cheques

in respect of wholly or partially unsuccessful

applications to be dispatched on or before(7)(8)(9) . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 28 March 2014

Dealings in H Shares on the Hong Kong Stock Exchange

expected to commence at 9:00 a.m. on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 31 March 2014

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EXPECTED TIMETABLE(1)

Notes :

(1) All times refer to Hong Kong local time, except as otherwise stated. For details of the structure of the Global Offering,

including conditions of the Hong Kong Public Offering, see Structure of the Global Offering.

(2) If you have already submitted your application through the designated website at www.eipo.com.hk and obtained an

application reference number from the designated website prior to 11:30 a.m., you will be permitted to continue the

application process (by completing payment of application monies) until 12:00 noon on the last day for submitting

applications, when the application lists close. You will not be permitted to submit your application through the designated

website at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications.

(3) If there is a tropical cyclone warning signal number 8 or above, or a black rainstorm warning in force in Hong Kong at any

time between 9:00 a.m. and 12:00 noon on Monday, 24 March 2014, the application lists will not open on that day. See How

to Apply for Hong Kong Offer Shares 10. Effect of Bad Weather on the Opening of the Application Lists.

(4) Applicants who apply for the Hong Kong Offer Shares by giving electronic application instructions to HKSCC should refer to

How to Apply for Hong Kong Offer Shares 6. Applying by Giving Electronic Application Instructions to HKSCC via

CCASS.

(5) None of the website or any of the information contained on the website forms part of this prospectus.

(6) The announcement will be available for viewing on the Hong Kong Stock Exchanges website at www.hkexnews.hk.

(7) Applicants who apply for 1,000,000 or more Hong Kong Offer Shares and have provided all required information in their

Application Forms may collect refund cheques (where applicable) and H Share certificates (where applicable) in person from

our H Share Registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell

Centre, 183 Queens Road East, Wanchai, Hong Kong from 9:00 a.m. to 1:00 p.m. on Friday, 28 March 2014. Applicants

being individuals who opt for personal collection must not authorise any other person to make collection on their behalf.

Applicants being corporations who opt for personal collection must attend by their authorised representatives each bearing a

letter of authorisation from their corporation stamped with the corporations chop. Both individuals and authorised

representatives (if applicable) must produce, at the time of collection, evidence of identity acceptable to Computershare Hong

Kong Investor Services Limited. Uncollected refund cheques and H Share certificates will be dispatched promptly by ordinary

post to the addresses as specified in the applicants Application Forms at the applicants own risk. For details of the

arrangements, see How to Apply for Hong Kong Offer Shares.

(8) Applicants who apply through the White Form eIPO service and paid their applications monies through single bank accounts

may have refund monies (if any) dispatched to their application payment bank account, in the form of e-Refund payment

instructions. Applicants who apply through the White Form eIPO service and paid their application monies through multiple

bank accounts may have refund monies (if any) dispatched to the address as specified in their application instructions to the

White Form eIPO Service Provider, in the form of refund cheques, by ordinary post at their own risk.

(9) e-Refund payment instruction/refund cheques will be issued in respect of wholly or partially unsuccessful applications and in

respect of successful applications if the Offer Price is less than the price payable on application.

The H Share certificates will only become valid certificates of title provided that the Global

Offering has become unconditional in all respects and neither of the Hong Kong Underwriting

Agreement nor the International Underwriting Agreement is terminated in accordance with its

respective terms prior to 8:00 a.m. on the Listing Date. The Listing Date is expected to be on or

about Monday, 31 March 2014. Investors who trade the H Shares on the basis of publicly available

allocation details prior to the receipt of H Share certificates or prior to the H Share certificates

becoming valid certificates of title do so entirely at their own risk.

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CONTENTS

This prospectus is issued by Harbin Bank Co., Ltd. solely in connection with the Hong Kong

Public Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or a

solicitation of an offer to buy any securities other than the Hong Kong Offer Shares offered by this

prospectu s pursua nt to the Hon g Kong Public Off ering. Thi s prospectu s may not be used for the

pur pose of, and doe s not consti tut e, an off er or inv ita tio n in any oth er jurisd iction or in any oth er

circumstances. No action has been taken to permit a public offering of the Offer Shares in any

jur isdict ion oth er tha n Hon g Kong and no action has bee n tak en to permit the dis tribut ion of thi s

pro spec tus in any jurisdict ion oth er tha n Hon g Kong. The dis tribut ion of thi s prospectu s and the

offering and sale of the Offer Shares in other jurisdictions are subject to restrictions and may not be

made except as permitted under the applicable securities laws of such jurisdictions pursuant to

registration with or authorisation by the relevant securities regulatory authorities or an exemption

therefrom. You should rely only on the information contained in this prospectus and the Application

Forms to make your investment decision. We have not authorised anyone to provide you with

information that is different from what is contained in this prospectus. Any information or

representation not made in this prospectus must not be relied on by you as having been authorised by

us, the Selling Shareholders, the Joint Global Coordinators, the Joint Bookrunners, the Joint Sponsors,

the Joint Lead Managers, the Underwriters, any directors of any of them or any other person involvedin the Global Offering. Information contained on our website at www.hrbb.com.cn does not form part

of this prospectus.

Page

Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Definitions and Conventions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Information about this Prospectus and the Global Offering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Waivers and Exemption from Compliance with the Hong Kong Listing Rules . . . . . . . . . . . . . 57

Directors, Supervisors and Parties Involved in the Global Offering . . . . . . . . . . . . . . . . . . . . . . . 63

Our Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Supervision and Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Our History and Operational Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184

Our Relationships with Our Substantial Shareholder and Connected Transactions. . . . . . . . . 204

Directors, Supervisors and Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206

Substantial Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225

Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228

Our Corporate Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231

Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236

Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274

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CONTENTS

Page

Future Plans and Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327

Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328

Structure of the Global Offering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336

How to Apply for Hong Kong Offer Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344Appendix I Accountants Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Appendix II Unaudited Supplementary Financial Information. . . . . . . . . . . . . . . . . . . . . . . . . II-1

Appendix III Unaudited Pro Forma Financial Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1

Appendix IV Unaudited Preliminary Financial Information of the Bank for the YearEnded 31 December 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

Appendix V Summary of Principal Legal and Regulatory Provisions . . . . . . . . . . . . . . . . . . . V-1

Appendix VI Summary of Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Appendix VII Taxation and Foreign Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1

Appendix VIII Statutory and General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-1

Appendix IX Documents Delivered to the Registrar of Companies and Available forInspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-1

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SUMMARY

This summary aims to give you an overview of the information contained in this prospectus. As it

is a summary, it does not contain all the information that may be important to you. You should read the

whole document before you decide to invest in the Offer Shares.

There are risks associated with any investment. Some of the particular risks in investing in the

Offer Shares are set out in the section entitled Risk Factors of this prospectus. You should read that

section carefully before you decide to invest in the Offer Shares.

OVERVIEW

We were the second largest commercial bank in Heilongjiang Province, and the largest

commercial bank in Harbin in terms of total assets as of 31 December 2012 and net profit for the

year ended 31 December 2012. As of 31 December 2012, our total assets accounted for 11.5% of the

total assets of all banking institutions in Heilongjiang Province. Our net profit for the year ended

31 December 2012 accounted for 11.2% of the net profit of all banking institutions in Heilongjiang

Province for the same year, according to the records of the CBRC Heilongjiang Bureau.

In recent years, our Bank has experienced rapid growth in profits. Our net profit increased from

RMB1,227.2 million for the year ended 31 December 2010 to RMB2,871.5 million for the year ended

31 December 2012, representing a CAGR of 53.0%. For the nine months ended 30 September 2013, our

net profit was RMB2,371.3 million.

We have an extensive network of branch outlets, covering a broad and diverse customer base.

As of 31 January 2014, we had a total of 304 branch outlets, consisting of 15 branches, 245 sub-branches,

24 Village and Township Banks and their 20 sub-branches in the PRC. Our branches and sub-branches

are mainly located in Heilongjiang Province. As of 31 January 2014, we had 10 branches and 198 sub-

branches in Heilongjiang Province, among which 138 sub-branches were located in Harbin. Outside

Heilongjiang Province, we have five branches and 47 sub-branches in the economically developed cities

in the PRC, including Tianjin, Dalian, Shenyang, Chongqing and Chengdu. Our 24 Village and Township

Banks and their 20 sub-branches are located in 14 provinces and municipalities directly under the State

Council.

The table below sets forth, for the periods indicated, a breakdown of our total operating income by

geographical regions.

For the year ended 31 December

For the nine months ended

30 September

2010 2011 2012 2012 2013

Amount

% of

total Amount

% of

total Amount

% of

total Amount

% of

total Amount

% of

total

(Unaudited)

(in millions of RMB, except percentages)

Heilongjiang

region(1) . . . . . . . . . . 2,779.3 85.6 4,224.5 78.0 5,020.0 65.1 3,932.2 71.7 3,840.3 64.8

Other Northeast

region(2) . . . . . . . . . . 246.8 7.6 424.3 7.8 872.2 11.3 541.2 9.9 656.1 11.1

Southwest region(3) . . 59.4 1.8 352.1 6.5 1,122.7 14.6 611.7 11.2 897.0 15.1

Northern China(4) . . . . 147.7 4.6 370.7 6.9 559.6 7.3 302.4 5.5 376.9 6.4

Other regions(5) . . . . . 12.2 0.4 42.4 0.8 136.8 1.7 91.5 1.7 153.3 2.6

Total operatingincome . . . . . . . . . . 3,245.4 100.0 5,414.0 100.0 7,711.3 100.0 5,479.0 100.0 5,923.6 100.0

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SUMMARY

Notes :

(1) Heilongjiang region: Our headquarters, Harbin Branch, Shuangyashan Branch, Jixi Branch, Hegang Branch, Suihua Branch,

Daqing Branch, Qitaihe Branch, Mudanjiang Branch, Jiamusi Branch and Qiqihar Branch and the Village and Township

Banks operating in Heilongjiang Province.

(2) Other Northeast region: Dalian Branch, Shenyang Branch and the Village and Township Banks operating in the Northeast

region excluding Heilongjiang Province.

(3) Southwest region: Chengdu Branch, Chongqing Branch and the Village and Township Banks operating in Southwest region,mainly including Sichuan and Chongqing.

(4) Northern China: Tianjin Branch and the Village and Township Banks operating in Northern China, mainly including Beijing

and Hebei.

(5) Other regions: Other Village and Township Banks except those operating in the above regions.

Our principal businesses include corporate banking business, personal banking business,

treasury operations and other businesses. See Business Our Principal Business Activities. The

table below sets forth our operating income by business segments and the proportion to our total

operating income for the periods indicated:


For the nine months ended

30 September

2010 2011 2012 2012 2013

Amount

% of

total Amount

% of

total Amount

% of

total Amount

% of

total Amount

% of

total

(Unaudited)


Corporate banking

business . . . . . . . . . . . . . . . . 1,502.5 46.3 2,000.2 36.9 2,585.6 33.5 1,722.4 31.4 2,034.7 34.3

Personal banking business . . . 1,309.0 40.3 1,947.6 36.0 2,228.7 28.9 1,808.8 33.0 1,761.4 29.7

Treasury operations . . . . . . . . 377.4 11.6 1,425.6 26.3 2,808.6 36.4 1,907.1 34.8 2,111.8 35.7

Other businesses(1) . . . . . . . . . 56.5 1.8 40.6 0.8 88.4 1.2 40.7 0.8 15.7 0.3

Total operating income . . . . 3,245.4 100.0 5,414.0 100.0 7,711.3 100.0 5,479.0 100.0 5,923.6 100.0

Note:

(1) Other businesses comprise businesses that cannot be identified as an independent segment or to a reasonable extent in

considered part of our corporate banking business, personal banking business and treasury operations. Income generated from

other businesses mainly includes government subsidies, leasing income, technology consultation fees and gains from disposals

of fixed assets.

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SUMMARY

We believe we are one of the leading providers of microcredit in the PRC. We are one of only two

commercial banks in China to be awarded by the CBRC as a Leading Banking Institution Providing

Services to Small and Micro Enterprises ( ) for five

consecutive times. Furthermore, we are the first PRC commercial bank to export microcredit know-how and

technology to other banking institutions which is a testament to our advanced microcredit know-how and

technology. On these bases, we believe we are one of the leading providers of microcredit in the PRC. Our

microcredit business commenced in 2001 and our Bank is a leading provider of microcredit in the PRC. The

products and services of our microcredit business consist primarily of loans to Small Enterprise Customers,

personal consumption loans and loans to farmers. The loans we offer to Small Enterprise Customers consist

of corporate loans to Small Enterprises (which includes small enterprises 1 and micro enterprises2 as defined

in the SMEs Classification Standards) and personal loans offered to Small Enterprises Owners (which refers

to individual customers that are owners of small enterprises and micro enterprises). See Business Our

Principal Business Activities Corporate Banking Business Microcredit Business. The following

diagram illustrates our microcredit business.

Loans to

Customers

Personal Loans

Loans to

Farmers

Personal

Consumption Loans

Loans to Small

Enterprise Owners

Personal Business

Loans Micro Loans

Small Amount

Secured Loans

Microcredit Business

Other Corporate LoansLoans to Small

Enterprises

Corporate Loans

1 According to the SMEs Classification Standards, there are different classification standards for different industries. For

example, industrial enterprises having more than 20 but fewer than 1,000 employees and generating more than RMB3 million

in operating income in a year are classified as small enterprises, while enterprises having more than five but fewer than 200

employees and generating more than RMB10 million in operating income in a year in the wholesale industry are also

classified as small enterprises.2 According to the SMEs Classification Standards, there are different classification standards for different industries. For

example, industrial enterprises having fewer than 20 employees or generating less than RMB3 million in operating income in a

year are classified as micro enterprises, while enterprises having fewer than five employees or generating less than RMB10

million in operating income in a year in the wholesale industry are also classified as micro enterprises.

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SUMMARY

As of 31 December 2012 and 30 September 2013, the total balance of our microcredit loans amounted

to RMB58,448.1 million and RMB72,527.0 million, respectively, representing 67.0% and 69.1%,

respectively, of our total loans to customers as of those dates. For the year ended 31 December 2012 and the

nine months ended 30 September 2013, our interest income from microcredit business amounted to

RMB4,146.5 million and RMB3,706.0 million, respectively, representing 63.4% and 67.8%, respectively, of

our total interest income for the same periods. The following table sets forth the distribution of the total

balance of our microcredit business by product type as of the dates indicated.

As of 31 December As of 30 September

2010 2011 2012 2013

Amount

% o f

total Amount

% of

total Amount

% of

total Amount

% of

total


Loans to Small

E nterpris es . . . . . . . . . . . . . 9 ,062.6 27.7 15,171.9 34.2 23,638.0 40.4 31,657.6 43.6

Personal loans(1) . . . . . . . . . . . 23 ,668. 2 7 2.3 29,1 39.7 65. 8 34,810 .1 59.6 40, 869.4 56 .4

Total balance of ourmicrocredit loans . . . . . . . 32,730.8 100.0 44,311.6 100.0 58,448.1 100.0 72,527.0 100.0

Note:

(1) Include loans to Small Enterprise Owners, loans to farmers and personal consumption loans.

We believe that our businesses, strong operating results and high-quality services have enabled us

to become a market leader in various banking business segments:

We were one of the earliest city commercial banks in the PRC to launch a microcredit

business, and the first commercial bank in the PRC to export microcredit know-how and

technology to other banking institutions;

We were the first city commercial bank in Northeast China to obtain an operating permit for a

foreign exchange business;

We are one of the four market makers for Renminbi-Ruble tradings in the interbank foreign

exchange market of the PRC, the domestic bank with the largest scale of Ruble cash exchange

and also a pilot bank for various banking businesses with Russia;

We were one of the first city commercial banks in Northeast China to launch investment

banking and interbank business; and

We are one of the three promoters of the Asia Financial Cooperation Association1.

Our headquarters is in Harbin and a majority of our business is conducted in Heilongjiang

Province. As of 30 September 2013, approximately 52.0% of our loans and approximately 61.8% of our

total deposits were with customers in Heilongjiang Province. Heilongjiang Province is the most northern

province in Northeast China and adjoins Russia. Benefiting from political support in the PRC and its

geographical environment, Heilongjiang Province has become an important commodity grain base within

China. From 2008 to 2012, Heilongjiang Provinces nominal GDP grew at a CAGR of 13.3%. See

Industry Overview Overview Economy of Heilongjiang Province.

1 Asia Financial Corporation Association is a regional financial cooperation organisation formed by certain small and

medium-sized banks and non-banking financial institutions in Asia on 24 April 2012 in Sanya, Hainan. The association strives

to provide a cooperation platform for its members, facilitate compliance management of its members and assist its members to

overcome development delays, thus contributing to the healthy development of the economy and the financial sector.

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SUMMARY

HONOURS AND AWARDS

We were ranked 4th among the city commercial banks in the PRC according to the 2013 Research

Report on Asian Bank Competitiveness Rankings released by the 21st Century Business Herald,

representing an advancement of five places as compared with 2012. The ranking is based on statistics of

eight aspects relating to a banks capabilities to enhance capital value for its shareholders, such as return

on capital, market share, asset quality and capital adequacy ratio2. We were ranked 33rd in terms of totalassets among the Top 50 Banks in China published by Standard & Poors in 2012. We were ranked 9th

among the city commercial banks with assets scale of over RMB200 billion as published by The Banker,

a PRC-based magazine, in 2013. City commercial banks are ranked by a number of indicators of financial

performance, including total assets, risk profile, capital structure, profitability and liquidity ratio. Our

Bank was ranked 313th in the Top 1000 World Banks 2013 recently announced by The Banker, a UK-

based magazine, in terms of total tier 1 capital3, representing an advancement of 85 places as compared

with our ranking in the same list of the previous year. According to the list, 96 banks in the PRC ranked

among the Top 1000 Word Banks 2013. Among these PRC banks on the list, we were ranked 27th, 7th

among city commercial banks and first among city commercial banks in Northeast China.

We have received a number of honours and awards for our strong business performance. In recentyears, our major honours and awards included the following:

In 2011, we were awarded the Best SME Banking in China ( )

award by The Asian Banker, being the only city commercial bank in the PRC to receive such

award. We were also recognised as the Market Maker of Emerging Currency with the

Greatest Improvement ( ) by the China Foreign Exchange Trade

System and an outstanding debt valuation member by China Central Depository & Clearing

Co. Ltd.;

We received the award for Leading Banking Institution Providing Services to Small and

Micro Enterprises ( ) by the CBRC for five

consecutive times; and

In 2012, we were honoured as the Outstanding Investment Bank in China Investment Bank

with the Greatest Growth Potential ( ) by Securities Times.

OUR STRENGTHS

We believe our competitive strengths are as follows:

We are one of the leading providers of microcredit in the PRC;

We have comparative advantages among PRC city commercial banks in terms of our cross-

regional operating network;

We are a pioneer among PRC city commercial banks in launching rural financial services;

We are the leading PRC city commercial bank in Russian financial services;

We have a prudent and improving risk management and internal control system; and

We have an experienced and dedicated management team and a competent staff base.

2 A banks asset scale, liquidity and efficiency indicators, deposit structure and branch network are also taken into

consideration.3 The banks are also assessed with other secondary indicators, namely, assets, capital asset ratio, pre-tax profits, profit on

capital, return on assets, capital adequacy ratio, NPL to total loans, loans to assets, risk weighted assets to assets and cost to

income.

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SUMMARY

OUR STRATEGIES

Our goal is to become a first-class domestic and internationally renowned microfinance bank. We

will continue to apply the development philosophy of Inclusive Finance, Harmonious Co-Enrichment.

We strive to further enhance our leading position in microcredit business and improve our general

competitiveness with the aim of establishing our Bank as a city commercial bank with sound governance

practices, clear positioning, distinctive features, a strong capital base, an excellent team and an advancedcorporate culture.

We plan to achieve these goals by adopting the following strategic measures:

Maintain and further enhance our competitive edge in the microcredit industry;

Achieve comprehensive development of rural financial services;

Accelerate the development of international financial business for small enterprises and micro

enterprises and cross-border financial business with Russia;

Strategically expand our operating regions and further improve our multi-channel distribution

network;

Further enhance our corporate governance, risk management and internal controls;

Utilise information technology to drive business development and management; and

Continue to implement our talent-oriented strategy.

SUMMARY FINANCIAL AND OPERATING INFORMATION

The summary consolidated income statement data for the years ended 31 December 2010, 2011 and

2012 and the nine months ended 30 September 2012 and 2013 and summary consolidated statement of

financial position data as of 31 December 2010, 2011 and 2012 and 30 September 2013 set forth below

are extracted from the Accountants Report set out in Appendix I to this prospectus. The summary

consolidated income statement data for the year ended 31 December 2013 and the consolidated statement

of financial position as of 31 December 2013 set forth below are extracted from the unaudited

preliminary financial information of our Bank for the year ended 31 December 2013 set out in

Appendix IV to this prospectus. You should read the summary financial information set forth below in

conjunction with the Accountants Report and its accompanying notes and the unaudited preliminary

financial information for the year ended 31 December 2013 and its accompanying notes. Our financial

information for the nine months ended 30 September 2012 has not been audited.

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SUMMARY

Summary Consolidated Income Statement Data

The following table summarises, for the periods indicated, our consolidated income statement. The

preliminary financial information for the year ended 31 December 2013 is not audited and is subject to

change. See Appendix IV Unaudited Preliminary Financial Information of the Bank for the Year ended

31 December 2013.


For the nine months

ended 30 September

2010 2011 2012 2013 2012 2013

(unaudited) (unaudited)

(in millions of RMB)

Net interest income . . . . . . . . . . . . . . . . . . . . . . 2,955.9 4,818.1 6,658.4 6,817.8 4,757.5 4,924.3Net f ee and co mmi ssion incom e . . . . . . . . . . . 116.2 411. 8 678 .7 1 ,247. 1 47 1.1 871 .2Net tr adi ng i ncom e . . . . . . . . . . . . . . . . . . . . . . 124.6 282. 1 356 .6 283. 9 28 0.5 150 .1Net gai n/ (l oss) o n f inanci al inv est ment s . . . . 0.7 ( 128. 8) (87 .4) ( 46. 5) (7 3.4) (34 .2)Other operating income, net . . . . . . . . . . . . . . 48.0 30.8 105.0 241.6 43.3 12.2

Operating income . . . . . . . . . . . . . . . . . . . . . . 3,245.4 5,414.0 7,711.3 8,543.9 5,479.0 5,923.6Operating expenses . . . . . . . . . . . . . . . . . . . . . . (1,401.5) (2,082.8) (3,025.5) (3,591.0) (1,991.4) (2,388.6)Impairment losses on:

Loans and advances to customers . . . . . . . . (238.7) (876.0) (837.2) (517.7) (809.7) (422.1)Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.7 52.2 1.0 11.6

Operating profit . . . . . . . . . . . . . . . . . . . . . . . 1,616.9 2,507.4 3,849.6 4,446.8 2,677.9 3,112.9Share of profits of an associate . . . . . . . . . . . . 9.4 3.2 8.0 7.1

Profit before tax . . . . . . . . . . . . . . . . . . . . . . . 1,616.9 2,507.4 3,859.0 4,450.0 2,685.9 3,120.0Income tax expense . . . . . . . . . . . . . . . . . . . . . (389.7) (651.0) (987.5) (1,078.9) (664.8) (748.7)

Profit for the year/period . . . . . . . . . . . . . . . 1,227.2 1,856.4 2,871.5 3,371.1 2,021.1 2,371.3Attributable to equity holders of the parent

company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,227.6 1,854.2 2,864.3 3,350.3 2,017.1 2,357.8

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SUMMARY

Summary Consolidated Statement of Financial Position Data

The following table summarises, as of the dates indicated, our consolidated statement of financial

position. The preliminary financial information as at 31 December 2013 is not audited and is subject to

change. See Appendix IV Unaudited Preliminary Financial Information of the Bank for the Year ended

31 December 2013.

As of 31 December

As of

30 September

2010 2011 2012 2013 2013

(unaudited)

(in millions of RMB)

AssetsCash and balances with central bank . . . . . . 23,413.2 30,935.7 51,858.5 51,552.1 40,729.7Due from banks and other financial

institutions . . . . . . . . . . . . . . . . . . . . . . . . . 9,837.9 15,907.0 19,946.8 33,871.2 27,730.0F in an cial assets hel d f or tr adin g . . . . . . . . . 5,3 18.6 4, 780.8 7 ,879. 0 2,512 .3 7,2 01.6Reverse repurchase agreements . . . . . . . . . . 17,863.5 49,973.6 51,745.6 51,110.9 27,783.5

Loans and advances to customers . . . . . . . . 53,200.5 67,018.2 85,298.1 103,515.0 102,638.4Financial investments . . . . . . . . . . . . . . . . . . 12,930.6 31,273.5 43,301.1 68,523.6 44,645.0Investments in an associate . . . . . . . . . . . . . 1,000.0 1,017.0 964.0 993.7P ro pert y and equi pment . . . . . . . . . . . . . . . . 1,6 56.7 3, 488.5 6 ,038. 2 7,314 .9 6,5 42.6Deferred income tax assets . . . . . . . . . . . . . . 136.0 167.0 258.3 333.9 370.8Other a ss ets . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ,476.9 2,117.1 2,747.6 2,477.5 3,024.8

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . 125,833.9 206,661.4 270,090.2 322,175.4 261,660.1

LiabilitiesDue to central bank . . . . . . . . . . . . . . . . . . . . 174.8 594.9 787.2 756.0Due to banks and other financial

institutions . . . . . . . . . . . . . . . . . . . . . . . . . 2,594.2 18,051.1 36,523.5 50,610.9 37,208.1Repurchase agreements . . . . . . . . . . . . . . . . . 2,871.7 27,972.5 22,832.7 19,091.2 6,289.8Due to customers . . . . . . . . . . . . . . . . . . . . . . 112,891.6 145,962.4 186,642.4 224,178.1 191,130.0Income tax payable . . . . . . . . . . . . . . . . . . . . 125.8 201.2 311.1 262.9 272.9

Debt s ec urit ie s issued . . . . . . . . . . . . . . . . . . 1 ,000.0 1,000.0 3,500.0 3,500.0 3,500.0Other l ia bili ties . . . . . . . . . . . . . . . . . . . . . . . 1 ,211.9 1,769.0 2,748.6 3,817.9 3,494.9

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 120,695.2 195,131.0 253,153.2 302,248.2 242,651.7

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . 5 ,138.7 11,530.4 16,937.0 19,927.2 19,008.4

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SUMMARY

Summary of Key Financial and Operating Indicators

The following table sets forth a summary of key financial and operating indicators for the periods or

as of the dates indicated. The key financial and operating indicators for the year ended 31 December 2013

are calculated based on the preliminary financial information for the year ended 31 December 2013,

which is not audited and subject to change. See Appendix IV Unaudited Preliminary Financial

Information of the Bank for the Year ended 31 December 2013.

Year ended 31 December

Nine month ended

30 September

2010 2011 2012 2013 2013

(unaudited)

Profitability indicatorsReturn on average total assets(1)(3) . . . . . . 1.17% 1.12% 1.20% 1.14% 1.19%

Return on average equity(2)(3) . . . . . . . . . . 27.64% 22.57% 20.35% 18.36% 17.67%

Net interest spread(3)(4) . . . . . . . . . . . . . . . . 3.38% 3.27% 3.06% 2.56% 2.49%

Net interest margin(3)(5) . . . . . . . . . . . . . . . 3.34% 3.29% 3.09% 2.64% 2.55%

Net fee and commission income to

operating income ratio . . . . . . . . . . . . . . 3.58% 7.61% 8.80% 14.60% 14.71%

Cost-to-income ratio(6) . . . . . . . . . . . . . . . . 39.11% 33.80% 34.51% 35.85% 34.23%

As of 31 December

As of

30 September

2010 2011 2012 2013 2013

(unaudited)

Capital adequacy indicators(7)

Cor e capi tal adequ acy r ati o . . . . . . . . . . . 9.04% 11.37 % 11. 94% 11.67 % 1 2.04%

Capi tal adequacy r ati o . . . . . . . . . . . . . . . . 1 1.75% 12.61 % 12. 97% 12.55 % 1 3.04%

Assets quality indicatorsNon-performing loans ratio(8) . . . . . . . . . . 0.79% 0.62% 0.64% 0.85% 0.86%

Impairment coverage ratio(9) . . . . . . . . . . . 19 2.60% 347.16 % 353. 52% 268.34 % 26 3.01%

Impairment losses on loans(10) . . . . . . . . . 1.53% 2.14% 2.25% 2.29% 2.26%

Other indicatorsLoan- to -dep osit rat io . . . . . . . . . . . . . . . . . 4 7.86% 46.92 % 46. 75% 47.26 % 5 4.94%

Notes :

(1) The percentage of net profit for a period to the average balance of the total assets at the beginning and the end of the period.

(2) The percentage of net profit attributable to the equity shareholders of our Bank for a period to the average balance of total

equity attributable to equity holders of the parent company at the beginning and the end of the period.

(3) Calculated with the annualised benchmark.

(4) Calculated as the difference between the average yield on total interest-earning assets and the average cost on total interest-

bearing liabilities, calculated based on the daily average of the interest-earning assets and interest-bearing liabilities.

(5) Calculated by dividing net interest income by average interest-earning assets, calculated based on the daily average of the

interest-earning assets.

(6) Calculated with the operating cost after the business tax and surcharges and divided by the operating income.

(7) Calculated pursuant to the Capital Adequacy Measures and other relevant regulations in the PRC and in accordance with PRC

GAAP. Core capital adequacy ratio = (core capital core capital deductions) / (risk-weighted assets + 12.5 x capital charge for

market risk); capital adequacy ratio = (capital capital deductions) / (risk-weighted assets + 12.5 x capital charge for market

risk). Since 2013, we have calculated and disclosed the capital adequacy ratio in accordance with the New Capital Adequacy

Measures. Core tier 1 capital adequacy rate = (core tier-1 capital corresponding capital deductions) / risk-weighted assets;

tier 1 capital adequacy rate = (tier 1 capital corresponding capital deductions) / risk-weighted assets; capital adequacy ratio =

(total capital corresponding capital deductions) / risk-weighted assets. According to the New Capital Adequacy Measures,

our core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio were 11.65%, 11.65% and

13.24%, respectively, as of 30 September 2013. According to the New Capital Adequacy Measures, our core tier 1 capital

adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio were 10.68%, 10.68% and 11.95%, respectively, as of

31 December 2013.

(8) Calculated with the total non-performing loans divided by the total loans to customers.

(9) Calculated with the allowance for impairment loss divided by the total non-performing loans.

(10) Calculated with the allowance for impairment loss on loan divided by the total loans to customers.

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SUMMARY

RISK FACTORS

Our business is subject to numerous risks as set out in the section headed Risk Factors. Since

different investors may apply different interpretations and criteria when determining the materiality of a

risk, you should read the section headed Risk Factors in this prospectus in its entirety before you

decide to invest in the Offer Shares. The risks we primarily face include the following:

If we are unable to effectively maintain the quality of our loan portfolio, our business,

financial condition and results of operations may be materially and adversely affected.

Our financial condition and results of operations may be materially and adversely affected if

we are not able to maintain the growth of our loan portfolio.

We may have to increase our allowance for impairment losses to cover future losses to our

loan portfolio, which could materially and adversely affect our business, financial condition,

results of operations and prospects.

If the collateral or guarantees securing our loans are insufficient to cover the outstanding

amounts of the loans, or if we are unable to realise the full values of the collateral or

guarantees in a timely manner, our financial condition and results of operations could bematerially and adversely affected.

Any significant or protracted downturn in, or change in national policies affecting, the real

estate market in the PRC may have a material adverse effect on our asset quality as well as our

future growth.

Any deterioration in the ability of local government financing vehicles to repay debt or any

change in national policy relating to local government financing vehicles may have an adverse

impact on our asset quality, financial condition or results of operations.

We have a concentration of loans to certain industries and customers and if the condition of

these industries or customers significantly deteriorates, our asset quality, financial condition

and results of operations may be adversely affected.

We cannot provide assurance that we will be able to satisfy the capital adequacy requirements

of the CBRC.

We are subject to risks in concentrating our business in Northeast China.

If we are unable to maintain our growth rate in customer deposits or if there is a significant

decrease in our customer deposits, our liquidity, financial condition and results of operations

may be adversely affected.

We have been increasingly focused on the development of wealth management products in

recent years, and any adverse developments or changes in regulatory policies relating to these

products could materially and adversely affect our business, financial condition, results of

operations and prospects.

We have made substantial investments in receivables, and any adverse development relating to

these types of investments could materially and adversely affect our profitability.

If our risk management and internal control policies and procedures are not able to fully

protect us from risks relating to our business operations, our reputation, business, financial

condition and results of operations may be materially and adversely affected.

We have not obtained the title certificates for some of the properties held by us, and some of

the lessors of the properties that we lease have not obtained the relevant title certificates,

which may materially and adversely affect our rights to use such properties.

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SUMMARY

Intensifying competition in the PRC banking industry and competition in the capital market of

the PRC in terms of capital could have material adverse effects on our business, financial

condition, results of operations and prospects.

Our business and operations are highly regulated, and our business, financial condition, results

of operations and prospects may be materially and adversely affected by adverse changes in

regulations or other PRC governmental policies (including their interpretation andapplication).

The liquidity risk of the PRC banking industry may materially and adversely affect our

liquidity, business, financial condition and results of operations.

INFORMATION OF OUR SUBSTANTIAL SHAREHOLDER

Harbin Economic Development is the only substantial shareholder of our Bank within the meaning

of the Hong Kong Listing Rules. As of the Latest Practicable Date, Harbin Economic Development

directly held approximately 29.48% of our equity interests. Immediately following the completion of the

Global Offering, Harbin Economic Development will directly hold approximately 19.65% of our then

total issued shares, assuming the Over-allotment Option is not exercised (or approximately 18.58% if theOver-allotment Option is exercised in full).

Established on 22 August 1992, Harbin Economic Development is wholly owned by Harbin

Municipal Finance Bureau, a functional division of Harbin Municipal Government that comprehensively

manages municipal fiscal revenue and expenditure, implements financial supervision, and participates in

adjustment and monitor of the municipal economy of Harbin. The business scope of Harbin Economic

Development is to make financial investments in areas like fixed-assets to municipally owned enterprises

and to receive dividends in return. See Our Relationships with Our Substantial Shareholder and

Connected Transactions.

USE OF PROCEEDS

We expect to use the net proceeds from the Global Offering to strengthen our capital base to

support the on-going growth of our business. We will not receive any of the proceeds from the sale of the

Sale Shares by the Selling Shareholders in the Global Offering. See Share Capital Transfer of Shares

to the NSSF.

OFFERING STATISTICS

The statistics below are based on the assumptions that (i) the Global Offering is completed and

2,748,700,000 H Shares are newly issued in the Global Offering, (ii) the Over-Allotment Option is not

exercised and (iii) 10,995,599,553 Shares are issued and outstanding following the completion of the

Global Offering:

Based on an Offer

Price of HK$2.89

Based on an Offer

Price of HK$3.33

Market capitalisation of our Shares . . . . . . . . . . . . . . . . . . . . HK$31,777.3 million HK$36,615.3 million

Price/earnings multiple on a pro forma basis(1) . . . . . . . . . . 7.49 times 8.63 times

Unaudited pro forma adjusted net tangible assets per

share(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

HK$2.86

(RMB2.26)

HK$2.97

(RMB2.35)

Notes :

(1) The calculation of price/earnings multiple is based on the earnings per share from the preliminary unaudited results for the

year ended 31 December 2013, on a pro forma basis at respective Offer Prices of HK$2.89 and HK$3.33 per H Share.

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SUMMARY

(2) The amount of unaudited pro forma adjusted net tangible assets per share is calculated in accordance with Rule 4.29 of the

Hong Kong Listing Rules after the adjustments referred to in Appendix III Unaudited Pro Forma Financial Information.

GLOBAL OFFERING

The Global Offering comprises:

(i) the Hong Kong Public Offering of 302,358,000 New Shares (subject to adjustment) in HongKong; and

(ii) the International Offering of 2,721,212,000 Offer Shares to be sold outside the United States

(including to professional and institutional investors within Hong Kong) in offshore

transactions in reliance on Regulation S and in the United States solely to qualified

institutional buyers in reliance on Rule 144A or another exemption from, or in transactions

not subject to, the registration requirements of the U.S. Securities Act.

Investors may apply for H Shares under the Hong Kong Public Offering or indicate an interest for

H Shares under the International Offering, but may not do both.

The number of H Shares to be offered under the Hong Kong Public Offering and the International

Offering, respectively, may be subject to reallocation as described in the subsection headed Structure of

the Global Offering The Hong Kong Public Offering Reallocation and clawback.

The number of the H Shares that may be over allocated will not exceed the number of the H Shares

that may be sold under the Over-allotment Option, namely, 453,530,000 H Shares, which is

approximately 15% of the number of Offer Shares initially available under the Global Offering, in the

event that the whole or part of the Over-allotment Option is exercised.

DIVIDEND POLICY AND DIVIDEND DECLARED BEFORE LISTING

We can declare and pay dividends in cash and shares. Our Board is responsible for submitting

proposals in respect of dividend payments. The determination of whether to pay a dividend and in what

amount is based on and subject to various factors, including but not limited to, our business, financial

performance, assets and regulations and general business conditions. See Financial Information

Dividend Policy.

We declared and paid bonus shares in the amount of RMB1,890.3 million in 2011, declared and

paid bonus shares in the amount of RMB392.4 million and cash dividend of RMB392.4 million in 2012,

and declared and paid bonus shares in the amount of RMB686.7 million and cash dividend of RMB171.7

million in 2013 in respect of profits for the years ended 31 December 2010, 2011 and 2012, respectively.

Dividends paid in prior periods may not be indicative of future dividend payments. We cannot guaranteewhen, if and in what form or size dividends will be paid in the future.

At the shareholders general meeting held on 10 May 2013, it was resolved that the accumulated

undistributed profits before the Global Offering would be shared among existing shareholders and new

shareholders.

According to the Articles of Association of our Bank, our Bank shall distribute dividends for any

profitable year. Profits to be distributed by our Bank in cash shall not be less than 10% of the

distributable profits realised in that year.

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SUMMARY

RECENT DEVELOPMENTS AND MATERIAL ADVERSE CHANGE

Our business has experienced growth since 30 September 2013, the date of the latest audited

financial information of our Bank as set forth in the Accountants Report in Appendix I to this

prospectus.

To diversify our business operations, we applied for a financial leasing license from the CBRC andwe received preliminary approval from the CBRC on 15 January 2014. Preparatory work for the

establishment of our financial leasing company has commenced since then and remained at the initial

stage as of the Latest Practicable Date. Our Directors have confirmed that, since 30 September 2013,

there has been no material adverse change in our financial or trading position. Based on our unaudited

preliminary financial information for the year ended 31 December 2013, our net interest income for the

year ended 31 December 2013 was RMB6,817.8 million, representing an increase of 2.4% compared to

RMB6,658.4 million for the year ended 31 December in 2012. Our net profit for the year ended

31 December 2013 was RMB3,371.1 million, representing an increase of 17.4% compared to

RMB2,871.5 million for the year ended 31 December in 2012. In addition, our total loans and advances to

customers (before subtracting allowance for impairment losses) and total due to deposits as of

31 December 2013 were RMB105,941.3 million and RMB224,178.1 million, respectively, and were

higher than the corresponding financial data as of 31 December 2012. As of 31 December 2013, our total

assets were RMB322,175.4 million, representing an increase of 19.3% from RMB270,090.2 million as of

31 December 2012.

The unaudited financial data as of and for the year ended 31 December 2013 have been reviewed by

the reporting accountants in accordance with the Practice Note 730 issued by the Hong Kong Institute of

Certified Public Accountants. You should read the discussion above in conjunction with the unaudited

preliminary financial information of our Bank for the year ended 31 December 2013 and the

accompanying notes, as well as the Managements Discussion and Analysis of Financial Condition and

Results of Operations set forth in Appendix IV to this prospectus.

LISTING EXPENSES

We will incur listing expenses in connection with the Listing, which include professional fees,

underwriting commissions and other fees. Listing expenses to be borne by our Bank are estimated to be

RMB214.5 million. Listing expenses of approximately RMB7.5 million had been incurred as of

30 September 2013. Listing expenses of approximately RMB207.0 million are expected to be incurred

after 30 September 2013, of which RMB37.5 million is expected to be charged to our statement of

comprehensive income and RMB169.5 million is expected to be accounted for as a deduction from

equity. The listing expenses above are the latest practicable estimate for reference only and the actual

amount may differ from this estimate. Our Directors do not expect such expenses to have a materialadverse impact on our results of operations for the year ending 31 December 2014.

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DEFINITIONS AND CONVENTIONS

In thi s pro spectus, unl ess the con text otherwise requir es, the fol low ing terms shall have the

meanings set out below:

12 th Five-Year Plan The Guiding Principle of Chinas 12th Five-Year Plan for

Nationa l Ec onomic a nd Soc ia l Developme nt (

)

Application Form(s) white, yellow and green application forms or, where the context

so requires, any of them, relating to the Hong Kong Public

Offering

Articles of Association or

Articles

the articles of association of our Bank, the current version of

which was passed at the shareholders general meeting on

10 May 2013 and was approved by the CBRC Heilongjiang

Bureau on 22 January 2014, which will become effective upon

Listing, as the same may be amended, supplemented or otherwise

modified from time to time

Bank, our Bank, Group, we

or us

Harbin Bank Co., Ltd. ( ), a joint stock

company incorporated in the PRC on 25 July 1997 with limited

liability in accordance with PRC laws and, unless context

indicates otherwise, all of its subsidiaries and branches

Banking Disclosure Rules the Banking (Disclosure) Rules, Chapter 155M of the Laws of

Hong Kong, as the same may be amended, supplemented or

otherwise modified from time to time

Ba nking Ordinance the Ba nking Ordinance , C ha pter 155 of the L aws of Hong Kong,

as the same may be amended, supplemented or otherwise


Basel Accords Basel I, Basel II and Basel III, collectively

Basel I the 1988 Basel Capital Accord

Basel II the Revised Basel Capital Framework promulgated in June 2004

Basel III the Revised Basel Capital Framework promulgated in December

2010

Big Four Industrial and Commercial Bank of China, China Construction

Bank, Bank of China and Agricultural Bank of China

Board the board of Directors of our Bank, as described in

Appendix VI Summary of the Articles of Association of this

prospectus

Board of Supervisors the s upervisory boa rd of our B ank e stablished pursuant to PRC

Company Law, as described in Appendix VI Summary of the

Articles of Association of this prospectus

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Building Ownership Certificates building ownership certificates in the PRC (

)

Business Day(s) any day on which banks in Hong Kong are generally open for

business to the public and which is not a Saturday, Sunday or

public holiday in Hong Kong

CASBE the China Accounting Standards for Business Enterprises

CAGR(s) compound annual growth rate(s)

Capital Adequacy Measures the Administrative Measures on the Capital Adequacy Ratio of

Commercial Banks ( ), that was

promulgated by the CBRC on 23 February 2004 and became

effective on 1 March 2004, as the same may be amended,

supplemented or otherwise modified from time to time

CBRC the China Banking Regulatory Commission (

)

CBRC Heilongjiang Bureau the China Banking Regulatory Commission Heilongjiang Bureau

( )

CCASS the Central Clearing and Settlement System established and

operated by HKSCC

CCASS Clearing Participant a person admitted to participate in CCASS as a direct clearing

participant or a general clearing participant

CCASS Custodian Participant a person admitted to participate in CCASS as a custodian

participant

CC ASS Inves tor Participa nt a person a dmitte d to participa te in C CASS a s a n inves tor

participant who may be an individual or joint individuals or a

corporation

CC ASS Participa nt a C CASS C le aring Participa nt, a CC ASS C us todian Participa nt

or a CCASS Investor Participant

CIETAC the China International Economic and Trade ArbitrationCommission ( )

CIRC the China Insurance Regulatory Commission

( )

city c omme rc ia l banks banks tha t a re a pprove d by the C BR C to be inc orpora te d under

the PRC Company Law and the PRC Commercial Banking Law

with branches set up at the municipal level or above

co mmer cial bank s all the b anki ng inst it uti ons in t he PRC other than pol icy bank s,

including: the Large Commercial Banks, the Nationwide Joint-

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stock Commercial Banks, city commercial banks, rural financial

institutions, foreign-owned banks and other banking institutions

Companies Ordinance the Companies Ordinance, Chapter 622 of the Laws of



Companies (Winding up and

Miscellaneous Provisions)

Ordinance

the Companies (Winding up and Miscellaneous Provisions)

Ordinance, Chapter 32 of the Laws of Hong Kong, as the same

may be amended, supplemented or otherwise modified from time

to time

Core Indicators (Provisional) the Core Indicators for Risk Supervision of Commercial Banks

(Provisional) ( ), as promulgated

by the CBRC on 31 December 2005 and effective on 1 January

2006, as the same may be amended, supplemented or otherwise


Cou nty Area( s) ar eas desig nated as cou nti es o r co unt y-l evel ci ti es u nder Chin as

administrative division system, which include economically

more developed county centres, towns and the vast rural areas

within their jurisdictions. As an administrative division unit, a

county or county-level city is generally directly below and under

the direct supervision of its corresponding municipal-level or

provincial-level government

CSRC the China Securities Regulatory Commission (

)

Development of New Rural Areas the plans, policies and targets underpinning the developments of

agricultural activities and building of the rural areas of China

into ne w rura l area s ( ) by the Ce ntra l Committe e of the

Communist Party of China and the State Council at the beginning

of 2006

Director(s) the director(s) of our Bank

Domestic Shares ordinary shares issued by our Bank in the PRC, with a nominal

value of RMB1.00 each, which are subscribed for or credited as

paid in Renminbi

Euro the official currency of the eurozone

GDP gross domestic product

GFA gross floor area

Gl obal Of fer ing t he Hon g Kong Pub lic Off eri ng an d th e In tern atio nal Off eri ng

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Green application form(s) the application form(s) to be completed by the White Form eIPO

Service Provider, Computershare Hong Kong Investor Services

Limited

Harbin or Harbin Municipality the Harbin Municipality located in Northeast China, in

Heilongjiang. It is the capital of Heilongjiang Province

Harbin Economic Development the Harbin Economic Development and Investment Company

( ), a limited liability company incorporated

in the PRC on 22 August 1992. It is wholly owned by Harbin

Municipal Finance Bureau and is the only substantial shareholder

(as defined under Hong Kong Listing Rules) of our Bank

Heilongjiang or Heilongjiang

Province

Heilongjiang Province of China

H S har e Registr ar Comp uter share H ong Ko ng I nvesto r S erv ices Limi ted

H Shares the ordinary shares to be issued by our Bank in Hong Kong under

the Global Offering, with a nominal value of RMB1.00 each,

which are to be subscribed for and traded in HK dollars and are

to be listed and traded on the Hong Kong Stock Exchange

HK$ or HK dollars the lawful currency of Hong Kong

HKFRS Hong Kong Financial Reporting Standards

HKIAC Hong Kong International Arbitration Centre

HKMA the Hong Kong Monetary Authority

HKSCC Hong Kong Securities Clearing Company Limited

HKSCC Nominees HKSCC Nominees Limited, a wholly owned subsidiary of

HKSCC

Hong Kong the Hong Kong Special Administrative Region of the PRC

Hong Kong Listing Rules the Rules Governing the Listing of Securities on the Hong KongStock Exchange, as the same may be amended and supplemented

or otherwise modified from time to time

Hong Kong Offer Sha re s 302,358,000 H Sha re s (subjec t to rea lloc ation) offe re d in the

Hong Kong Public Offering

Hong Kong Public Offering the offer for subscription of the Hong Kong Offer Shares in

Hong Kong at the Offer Price and on, and subject to, the terms

and conditions of this prospectus and the Application Forms, as

further described in the section headed Structure of the Global

Offering

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Hong Kong Stock Exchange The Stock Exchange of Hong Kong Limited

Hong Kong Underwriters the underwriters listed in the section headed Underwriting

Hong Kong Underwriters

Hong Kong Underwriting

Agreement

the underwriting agreement relating to the Hong Kong Public

Offering dated 18 March 2014 entered into among, inter alia, us

and the Hong Kong Underwriters, as described in the section

headed Underwriting

IFRS the International Accounting Standards, International Financial

Reporting Standards, amendments and the related interpretations

issued by the International Accounting Standards Board

International Offer Shares the 2,721,212,000 H Shares (subject to reallocation and the

Over-allotment Option) offered in the International Offering

International Offering the offer by us and the Selling Shareholders for the purchase and

sale of certain Offer Shares to investors as further described in

the section headed Structure of the Global Offering TheInternational Offering

International Underwriting

Agreement

the international underwriting agreement relating to the

International Offering, expected to be entered into on or about

25 March 2014, among, inter alia, us, the Selling Shareholders

and the International Underwriters

Inte rnationa l Underwriters the group of init ia l unde rwrite rs e xpec te d to e nter into the

International Underwriting Agreement to underwrite the

International Offering

IT Information Technology

Joi nt Bookr unn ers Ch ina In ter nati onal Capit al Cor por atio n Ho ng K ong S ecur iti es

Limited, Credit Suisse (Hong Kong) Limited, BOCI Asia

Limited, ABCI Capital Limited, Deutsche Bank AG, Hong Kong

Branch, DBS Asia Capital Limited, Haitong International

Securities Company Limited, CIMB Securities Limited, BOCOM

I nt ernat ion al S ecur iti es Li mi ted, Ch ina Merch ants

Securities (HK) Co., Limited and CCB International Capital

Limited

Joint Global Coordinators China International Capital Corporation Hong Kong Securities

Limited, Credit Suisse (Hong Kong) Limited, BOCI AsiaLimited, ABCI Capital Limited and Deutsche Bank AG, Hong

Kong Branch

Joint Le ad Ma na ge rs C hina Interna tional C apital Corporation Hong Kong Sec urit ie s

Limited, Credit Suisse (Hong Kong) Limited, BOCI Asia

Limited, ABCI Securities Company Limited, Deutsche Bank AG,

Hong Kong Branch, DBS Asia Capital Limited, Haitong

International Securities Company Limited, CIMB Securities

Limited, BOCOM International Securities Limited, China

Merchants Securities (HK) Co., Limited and CCB International

Capital Limited

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Joint Sponsors China International Capital Corporation Hong Kong Securities

Limited, BOCI Asia Limited and ABCI Capital Limited

Land use rights certificates land use rights certificates in the PRC (

)

Lar ge Comm erci al Ban ks t he fi ve l arg e C hin ese commer cial ban ks consi stin g o f

Agr icu ltu ral Bank of China, Bank of Chin a, Bank o f

Communications, China Construction Bank and Industrial and

Commercial Bank of China, and their respective predecessors,

collectively

Latest Practicable Date 10 March 2014, being the latest practicable date for ascertaining

certain information in this prospectus before its publication

List ing Commi tt ee the list ing comm itt ee of th e Hong Kong St ock Exchang e

Listing Date the date on which dealing in the H Shares commences on the

Hong Kong Stock Exchange

Macau the Macau Special Administrative Region of the PRC

Mandatory Provisions the Mandatory Provisions for Articles of Association of

Companies to be Listed Overseas ( ),

as promulgated by the State Council Securities Commission and

the State Restructuring Commission on 27 August 1994 and

became effective on the same date, as the same may be amended

and supplemented or otherwise modified from time to time

micro e nterpris es e nterpris es c la ss ifie d a s mic ro e nterpris es a cc ording to the SMEs

Classification Standards, subject to different standards based on

the nature of the industries. For example, industrial enterprises

having fewer than 20 employees or generating less than RMB3

million operating income are classified as micro enterprises,

while enterprises having fewer than five employees or generating

less than RMB10 million operating income in the wholesale

industry are also classified as micro enterprises

MOF the Ministry of Finance of the PRC ( )

NAO the National Audit Office of the PRC ( )

Nationwide Joint-stock Commercial

Banks

China CITIC Bank, China Everbright Bank, Huaxia Bank, China

Guangfa Bank, Ping An Bank (formerly named as ShenzhenDevelopment Bank), China Merchants Bank, Shanghai Pudong

Development Bank, Industrial Bank, China Minsheng Bank,

Evergrowing Bank, Zheshang Bank and Bohai Bank

NBSC the National Bureau of Statistics of China (

)

NDRC the National Development and Reform Commission of the PRC

( )

New Capital Adequacy Measures Measures for Administration on Capital of Commercial Banks

(Provisional) ( ), as promulgated by

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the CBRC on 7 June 2012 and effective on 1 January 2013, as

the same may be amended, supplemented or otherwise modified

from time to time

New Shares the 2,748,700,000 H Shares to be issued and offered for

subscription by our Bank in the Global Offering (assuming the

Over-allotment Option is not exercised); and, where relevant,

any additional H Shares which may be issued and offered by our

Bank pursuant to the exercise of the Over-allotment Option

No rt heast Chi na t he t hr ee pr ovi nces of Hei lon gji ang, Ji li n and Li aoni ng wh ich ar e

located in the northeast of China

NPC the National Peoples Congress of the PRC

( )

NSSF the National Council for Social Security Fund of the PRC

( )

Offer Price the final Hong Kong dollar offer price per H Share (exclusive of

any brokerage fee, SFC transaction levy and the Hong Kong

Stock Exchange trading fee) at which the H Shares are to be

subscribed and issued pursuant to the Global Offering, to be

determined as described in the section headed Structure of the

Global Offering

Offer Shares the H Shares offered in the Global Offering

Over-allotment Option the option to be granted by our Bank and the Selling

Shareholders to the International Underwriters to purchase up to

an aggregate of 453,530,000 additional H Shares at the Offer

Price as described in the section headed Structure of the Global

Offering

PBOC the Peoples Bank of China ( ), the central bank of the

PRC

PBOC Harbin Central Sub-branch the Peoples Bank of China Harbin Central Sub-branch

( ), established under the Head Office

of the PBOC, and which assumes the function of a central bank

in Heilongjiang Province

Personal Data (Privacy) Ordinance the Personal Data (Privacy) Ordinance, Chapter 486 of the Laws

of Hong Kong, as the same may be amended, supplemented or


PRC Banking Supervision and

Regulatory Law

the Banking Supervision and Regulatory Law of the PRC

( ), as enacted by the 6th meeting

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of the 10th Standing Committee of the NPC on 27 December

2003, effective on 1 February 2004, as the same may be

amended, supplemented or otherwise modified from time to time

PR C Commercial Ba nking La w the C ommercial B anking L aw of the PRC (

), as enacted by the 13th meeting of the 8th Standing

Committee of the NPC on 10 May 1995, effective on 1 July

1995, as the same may be amended, supplemented or otherwise


PRC Company Law the Company Law of the PRC ( ), as enacted

by the 5th meeting of the 8th Standing Committee of the NPC on

29 December 1993, effective on 1 July 1994, as the same may be

amended, supplemented or otherwise modified from time to time

PRC GAAP the generally accepted accounting principles in the PRC

PRC or China the Peoples Republic of China, but for the purposes of thisprospectus only, excluding Hong Kong, Macau and Taiwan,

unless otherwise indicated

PRC PBOC Law the Law of the Peoples Bank of China of the PRC

( ), as enacted by the 3rd meeting of

the 8th Standing Committee of the NPC on 18 March 1995,

effective on the same date, as the same may be amended,

supplemented or otherwise modified from time to time

PRC Securities Law the Securities Law of the PRC ( ), as enacted

by the 6th meeting of the 9th Standing Committee of the NPC on29 December 1998 and became effective on 1 July 1999, as the

same may be amended, supplemented or otherwise modified

from time to time

Price Determination Date the date, expected to be on or about 25 March 2014, on which the

Offer Price is to be fixed by an agreement between us and the

Joint Global Coordinators (on behalf of the Underwriters) for the

purpose of the Global Offering

Promoters the promoters that established our Bank on 25 July 1997. At the

time of our establishment, our Promoters comprised 154corporate shareholders and 4,756 individual shareholders

Regulation S Regulation S under the U.S. Securities Act

RMB or Renminbi the lawful currency of the PRC

Rub le or RUB Russi an r uble, the lawf ul cu rr ency of t he Russian Feder atio n

Rule 144A Rule 144A under the U.S. Securities Act

SAFE the State Administration of Foreign Exchange of the PRC

( )

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SAIC the State Administration for Industry and Commerce of the PRC

( )

Sale Shares the 274,870,000 H Shares converted from Domestic Shares

initially to be sold by the Selling Shareholders in the Global

Offering (assuming the Over-allotment Option is not exercised);

and, where relevant, any additional H Shares converted from

Domestic Shares which may be sold by the Selling Shareholders

pursuant to the exercise of the Over-allotment Option. For more

information, see Share Capital Transfer of Shares to the

NSSF

SASAC the State-owned Assets Supervision and Administration

Commission of the State Council

( )

SAT the State Administration of Taxation of the PRC ()

Se lling Sha re holders the s ta te -owned s ha re holders, c olle ctively, who a re require d to

reduce their shareholding pursuant to the relevant PRC

regulations relating to reduction of state-owned shares as further

listed out in the section headed Information About this

Prospectus and Global Offering The Selling Shareholders

SFC the Securities and Futures Commission of Hong Kong

SFO the Securities and Futures Ordinance, Chapter 571 of the Laws of



SHIBOR Shanghai Interbank Offered Rate, a daily reference rate

published by the National Interbank Funding Centre

small e nterpris es e nterpris es c la ss ifie d a s small e nterpris es a cc ording to the SMEs

Classification Standards, subject to different standards based on

the nature of the industries. For example, industrial enterprises

having more than 20 but fewer than 1,000 employees and

generating more than RMB3 million operating income are

classified as small enterprises, while enterprises having more

than five but fewer than 200 employees and generating more than

RMB10 million operating income in the wholesale industry are

also classified as small enterprises

SMEs small enterprises, medium enterprises and micro enterprises as

classified pursuant to the SMEs Classification Standards

SMEs Classification Standards Regulations on the Standards for Classification of SMEs

( ) jointly promulgated by the PRC Ministry

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of Industry and Information Technology, the NBSC, the NDRC

and the MOF on 18 June 2011. Enterprises in various industries

are classified based on a number of criteria, such as the number

of employees and operating income

Spec ia l R egulations the Spe cial Re gula tions on the Ove rs ea s Offering a nd L is ting of

Shares by Joint Stock Limited Companies (

), as promulgated by the State

Council on 4 August 1994

Stabilis ing Ma na ge r Haitong Interna tional Sec urit ie s Company L imited

State Council the PRC State Council ( )

Supervisor(s) the supervisor(s) of our Bank

Trac k R ec ord Period the period c omprising the yea rs e nded 31 Dec embe r 2010, 2011

and 2012 and the nine months ended 30 September 2013

Un derwr it ers t he Hon g Kong Under wr iter s and the I nt ernat ion al Un derwr it ers

Underwriting Agreements the Hong Kong Underwriting Agreement and the International

Underwriting Agreement

U.S., U.S.A. or United States the United States of America

US$ or U.S. dolla rs the lawful c urre nc y of the Unite d Sta te s

U. S. Secur iti es Act t he Uni ted S tat es Secur iti es Act of 1933

Village and Township Banks banks that are approved by the CBRC to be incorporated in rural

areas with the main business focused on serving local farmers

and supporting agricultural development

Whi te For m eI PO t he appl icat ion f or Hong Kong Of fer Sh ares to be issued in the

applicants own name by submitting applications online thro

Harbin Bank Co Ltd (6138) 19 March 2014

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Transcript of Harbin Bank Co Ltd (6138) 19 March 2014