Celebrating the Past.

Embracing the Future.

2019 Annual Financial and Sustainability Report

 About the Report
102-50, 102-51 102-52, 102-54, 102-55

This Annual Financial and Sustainability Report provides our stakeholders with a
balanced view of our ability to use our financial resources and expertise to be a
sustainable business that creates sustainable value.

Covering the period January 1 to December 31, 2019, this report contains material
information relating to our financial and non-financial performance, operating
context, prospects, risks, and governance to address the information requirements
of our current and prospective investors. We also present information relevant
to the way we create value for other key stakeholders, including our employees,
customers, regulators, and society. This follows our latest report released in 2018
covering the period January 1 to December 31, 2018.

This report has been prepared in accordance with the GRI Standards: Core option.
This has also been aligned with the disclosure requirements of the Bangko
Sentral ng Pilipinas and the ASEAN Corporate Governance Scorecard. For the
Materiality Disclosures Service, GRI Services reviewed that the GRI content index
is clearly presented and the references for Disclosures 102-40 to 102-49 align with
appropriate sections in the body of the report.

About the Cover

The hourglass represents two different

eras inextricably connected with each
other. While the glass bulb on top
Celebrating the Past. symbolizes a traditional banking method, the
Embracing the Future.
one at the bottom features a more modern
platform. While the eras are distinct, the
timeless values of past still forms part of
the fabric of the future, in a time continuum
where partnerships continues to evolve in
new, reimagined ways.

New
rdinary
FSC) which
ment of the

material
product
2019 Annual Financial and Sustainability Report
Contents

2-3 21 80
About China Bank What our Stakeholders are Saying Awards and Distinctions
Company Profile, Vision, Mission Materiality Matrix
Our Core Values Key Themes
81-107
Financial Statements
4-9 22-29 Capital Structure/Adequacy, Audit
Message to Our Stakeholders China Bank as Enabler Committee Report, Statement of
From Chairman Hans T. Sy, Enabling Customers’ Success Management Responsibility for
Vice Chairman Gilbert U. Dee, and Financial Statements, Auditors’ Report,
President William C. Whang Management Discussion, Notes to
30-33 Financial Statements
China Bank as Advocate
10-11 Advocating for our Customers
Banking in the Time of COVID-19 108-123
Branch Directory
34-57 China Bank Branches
12-13 China Bank as Steward China Bank Business Offices
Financial Highlights Being a Trusted Steward China Bank Savings Branches
China Bank Savings Business Offices

14-15 58-63
SDG Contribution - Core Areas China Bank as Employer 124-126
Engaging our people Subsidiaries and Affiliate

16-18
Sustainability at China Bank 64-69 127-135
Sustainability Journey China Bank as Partner Products and Services
Sustainability Strategy and Roadmap Partnering with and for our
communities
136-139
19-20 GRI Index
Listening to Our Stakeholders 70-79
Materiality Process Our Leaders
Stakeholder Engagement China Bank Board of Directors,
Management Committee, and
Senior Officers

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 1
 About China Bank
102-1, 102-2, 102-3, 102-4, 102-5, 102-6

China Banking Corporation (China Bank) is one of the Over the years, we have reinforced our human,
leading private universal banks in the Philippines. physical, and technological resources to meet the
We offer a full range of banking products and changing needs of our customers, shareholders,
services to institutional (corporate, middle market/ and regulators, while minimizing any negative
commercial, SMEs) and individual (retail, mass impact on communities and the environment.
affluent, high net worth) customers, as well as thrift
banking, investment banking, insurance brokerage, Our vision, mission, and the values passed on by
and bancassurance services through our subsidiaries China Bank’s founders underpin our continuing
China Bank Savings, China Bank Capital, China Bank story of sustainable growth, governance
Securities, China Bank Insurance Brokerage, and excellence, and enduring partnerships. We are
affiliate Manulife China Bank Life Assurance. committed to place sustainability at the heart of
our business and credit decisions and to uphold
China Bank, established in 1920, has an in-depth the highest standards of corporate governance to
understanding of the way entrepreneurs and remain strongly positioned for value creation.
businessmen do business. While maintaining very
close multi-generational relationships with the The China Bank stock (PSE: CHIB) is listed on
Filipino-Chinese community, we have since expanded the Philippine Stock Exchange (PSE). We are
the scope of our products and services to cover all a member of the SM Group, one of the largest
market segments as we pursue and enhance ways to conglomerates in the Philippines.
create greater value for the future.

631 9,813 P962 billion

branches employees total assets

1,002 P10.1 billion P775 billion

ATMs net income total deposits

1.7 million P96 billion P578 billion

customers capital gross loans

2 C H I N A BA N K I N G C O R P O R AT I O N
VISION MISSION
102-16
We will be a leading provider of quality services
Drawing strength from our rich history, we will be the consistently delivered to institutions, entrepreneurs, and
best, most admired, and innovative financial services individuals here and abroad, to meet their financial needs
institution, partnering with our customers, employees, and exceed their rising expectations.
and shareholders in wealth and value creation.
We will be a primary catalyst in the creation of wealth for
our customers, driven by a desire to help them succeed,
through a highly engaged team of competent and
empowered professionals, guided by in-depth knowledge
of their needs and supported by leading-edge technology.

We will maintain the highest ethical standards, sense of

responsibility, and fairness with respect to our customers,
employees, shareholders, and the communities we serve.

CORE VALUES
Integrity Customer service focus
We will always take the high road by Satisfied customers are essential
practicing the highest ethical standards to our success. We will achieve
and by honoring our commitments. We total customer satisfaction by
will take personal responsibility for our understanding what the customer
actions and treat everyone fairly and wants and deliver it efficiently.
with trust and respect.

High performance We are committed Resourcefulness/

to live by these values
standards Initiative
in conducting our
We will abide by well-established We will devise and initiate ways
business and achieving
professional methods of doing and means to achieve targets/
our vision and mission.
business that go beyond the goals and go beyond customer
typical/routine functions and expectations.
designated results.

Commitment to quality Efficiency

We will strive for continuous We will perform tasks promptly
improvement in all that we do, and accurately while maintaining
so that we will rank among the or improving the quality of results
best in the banking industry or output.
in customer, employee, and Concern for people
community satisfaction. We have a high regard for
people’s needs and welfare,
whether in and out of the office.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 3
 Message to Stakeholders
102-14, 102-15

To Our Fellow Stakeholders,

2019 was a momentous year for China Bank that marked The economy before the pandemic
the end of another remarkable decade, and ushered in
the next phase of our journey—China Bank’s 100th year Global economic growth in 2019 slowed to 2.9%
and the exciting opportunities ahead. from 3.6% in 2018, its weakest pace since the global
financial crisis a decade ago. Around the world, business
However, as we were preparing this report in early 2020, sentiment and economic activity were dampened by
the world was hit by an unprecedented global crisis and trade tensions, the global slowdown in manufacturing,
changed everything. In the wake and in the aftermath country-specific weakness in large emerging market
of the COVID-19 pandemic, our priority is to help our economies, and unrest in the Middle East.
stakeholders in these challenging times.
In the Philippines, economic growth also decelerated
We are pleased to report that our Bank is well positioned amid challenging external environment and a contraction
financially, operationally, and strategically to provide the in public investments. The country’s gross domestic
needed resources, services, and support to address the product (GDP) grew 6% in 2019 compared to 6.3% in
humanitarian needs and economic challenges caused by 2018. Nonetheless, the Philippines grew faster than the
this pandemic. As the Philippines and other countries other major economies in the region except Vietnam.
imposed lockdowns to contain the spread of the virus,
we remained committed to helping our customers and
communities while ensuring the safety and well-being of
our employees.

4 C H I N A BA N K I N G C O R P O R AT I O N
From left: China Bank Vice Chairman Gilbert U. Dee, Chairman Hans T. Sy, and President William C. Whang.

GDP growth averaged 5.6% in the first semester,

its lowest level in eight years, due mainly to public
“We intend to leverage
underspending caused by the delayed passage of the our financial strength
2019 national budget. The growth picked up in the third
quarter at 6.3% and further improved to 6.7% in the
and business expertise
fourth quarter, driven by a sharp rebound in infrastructure to extend the help and
spending which rose 46%.
support our stakeholders
Then COVID-19 struck hard and fast, overturning earlier need the most.”
growth estimates. The extraordinary public health crisis
is expected to weaken even the strongest economies Supported by your trust and confidence and driven by the
in 2020. For the Philippines, the latest estimate of the dedication and enthusiasm of our employees, we built on
Bangko Sentral ng Pillipinas (BSP) is GDP contraction of the growth momentum of the past three years and set
2.0% to 3.4%, bleaker than the 2.0% growth forecast by new record highs. We intend to leverage our financial
the World Bank and Asian Development Bank, and a far strength and business expertise to extend the help and
cry from the government’s 6.5% to 7.5% original GDP support our stakeholders need the most.
growth target for 2020. Think tank Fitch Solutions cut
its 2020 GDP growth projection for the country from China Bank’s net income rose 24% year-on-year to
4% to -2%. P10.1 billion in 2019, driven by the sustained robust
growth of our core businesses. This translated to a return
Solid performance that will see us through these on equity of 11.04% and a return on assets of 1.10%.
uncertain times Net interest margin improved to 3.39%.

Amid the slowdown in 2019, we channeled our efforts to Net interest income rose 14% to P26.1 billion, while fee-
deliver excellent customer service while taking advantage based income jumped 49% to P8.4 billion.
of growth opportunities and managing our risks well.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 5
 Message to Stakeholders

“More so in these trying Total capital stood at P96 billion, up 9%. Capital adequacy
ratios remained healthy with common equity tier (CET) 1
times, we draw strength ratio at 12.8% and total capital adequacy ratio (CAR)

from our strong governance at 13.7%.

culture and our core values With consistent profit growth driven by stable core
recurring income, we are able to provide satisfactory
that guide our actions and returns to our shareholders. In 2019, we paid a total of
decisions to always do what P2.4 billion cash dividends, 6% higher than 2018’s P2.2
billion. The cash dividends, equivalent to P0.88 per share
is right and to do right by were paid within 30 days of declaration, in line with global
our stakeholders no matter best practice governance standards. Since China Bank’s
first stock rights offer in 2014, a total of P11.7 billion in
the circumstances.” cash dividends had been paid to shareholders.

Total resources reached P962 billion in 2019,11% higher Good governance amid the good times and the bad
than in 2018, bringing us closer to the P1 trillion asset
milestone. One of the reasons for China Bank’s resilience is our
commitment to conducting our business ethically and
Gross loans expanded 13% to P578 billion, driven by responsibly. We recognize the importance of upholding
higher demand across all segments. Consumer loans, international standards and best practices that promote
in particular, grew 23% to P107 billion. Asset quality responsible business conduct. Our latest awards for
remained healthy amid the loans growth, with a gross excellence in corporate governance affirm this steadfast
non-performing loan (NPL) ratio of 1.5% and NPL cover commitment.
at 129%.
In 2019, the Institute of Corporate Directors awarded
Total deposits grew 7% to P775 billion, underpinned China Bank with a Four-Arrow Recognition for achieving
by P412 billion in checking and savings account (CASA) a score 110 to 119 points out of the 130 highest possible
deposits. Our P30 billion Peso retail bonds offer and points in the 2018 ASEAN Corporate Governance
US$150 million green bonds issue to International Scorecard (ACGS). We were the only bank among the
Finance Corporation also helped diversify our funding six publicly-listed companies (PLCs) with this score
base and enhance funding flexibility. Six times range in the ACGS, which included SM Investments
oversubscribed, our maiden issue of fixed rate bonds Corp. and SM Prime Holdings, Inc. In addition, the BSP
had the largest number of investors and was the second conferred to China Bank the Best Corporate Governance
largest issuance for the year in terms of volume. Disclosure and Transparency Award, and for the second
year in a row, the Pagtugon Award for Universal and
As we continued to upgrade and expand our systems, Commercial Banks, in recognition of the Bank’s customer
processes, infrastructure, and manpower, total operating responsiveness and strong support of the BSP’s
expenses increased 13% to P20.3 billion. Cost-to-income consumer protection advocacy.
ratio improved to 59% from 63%. We are working on
further improving cost efficiency in 2020, while also Since 2013, China Bank has been consistently among
investing in the needed improvements to provide the the top 50 PLCs in the Philippines evaluated under the
best service to our customers. ACGS. In 2018, we were ranked among the top 50 PLCs
in Southeast Asia by the ASEAN Capital Markets Forum.

6 C H I N A BA N K I N G C O R P O R AT I O N
In 2019, we continued to further strengthen our position In 2019, China Bank generated almost P35 billion in direct
as one of the best governed companies in the region. economic value and distributed 78% of it or P27 billion
Among other key changes, we amended China Bank’s for the benefit of the people and the communities where
By-Laws, increasing the number of directors from 11 we operate. Underpinning our financial activities is our
to 12. Director Angeline Ann H. Hwang, our fourth constant drive to get the best talents and to make China
independent director, was elected during the 2019 Annual Bank a great place to work. In 2019, we hired 1,602 new
Stockholders’ Meeting. With over 45 years of experience employees, bringing our total manpower to 9,813-strong.
in almost all facets of Philippine banking, especially in We further developed our leadership bench strength
credit aspects. Director Hwang brought valuable insights and welcomed Magnolia Luisa N. Palanca as Financial
and sound governance to the China Bank Board as well Markets Segment Head and Christopher Ma. Carmelo Y.
as to the Boards of our subsidiaries China Bank Savings Salazar as Treasurer and Treasury Group Head.
and China Bank Securities where she likewise served as
independent director. We are deeply saddened by the From recruitment to training, to rewards and recognition
passing of Director Hwang on April 11, 2020. Despite initiatives, to work-life integration programs (WLIPs) and
being on the Board for less than a year, she had made an bank-sponsored volunteer activities, we continued to
indelible mark in board and committee proceedings on work on having a highly engaged workforce who feel
credit matters and issues of accountability. Her passing is good about their job and take pride in working for China
a real loss to China Bank and to the community, and she Bank and what we stand for. And indeed we were
will be greatly missed. rewarded, for our employees remained resolute to fulfill
their duties and responsibilities to keep the Bank running
More so in these trying times, we draw strength from during the Luzon-wide enhanced community quarantine
our strong governance culture and our core values that (ECQ). From the ones who worked from home to those
guide our actions and decisions to always do what’s called to serve at our branches and offices as part of the
right and to do right by our stakeholders no matter the skeletal workforce, we are truly grateful for their service.
circumstances.
The next 100 years
Toward a sustainable future for all
In preparing for the future, we are preserving our legacy
We are committed to combine financial success while transforming to be a better and more responsive
with socially responsible action. We strive to create bank for the next generation of customers.
shared value and make a meaningful contribution
to the realization of the United Nations Sustainable In 2019, we began restoring the China Bank Binondo
Development Goals, while being mindful of our direct and Building, our first head office, to its original architecture
indirect impacts. and make it more resilient. Built in 1924, it is the only
bank headquarters still standing and being used for
bank operations in Binondo, Manila. Construction was
Proceeds of the US$150 million we raised from our
suspended during the ECQ, but once completed, the
maiden green bond issue, with IFC as the sole investor, restored building will be marked as a heritage site and,
were used to finance renewable energy and green we hope, will prove to be a model of true architectural
building projects in 2019. We also continued to support restoration and an important cornerstone of urban renewal
sustainable infrastructure projects that contribute to in Manila. It will also house the China Bank Museum
nation building and to help uplift lives by financing the where people can appreciate our Bank’s rich history, and for
dreams of everyday Filipinos—a car, a home, a business those who can’t visit the museum, they can tour it virtually
of their own. via a mobile-based app.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 7
 Message to Stakeholders

“As we face the challenges Our core business expansion strategy is anchored on
growing customer relationships while strengthening ties
of the ‘new normal’, we offer with existing ones. Our funds build-up strategy will be

you and all our stakeholders driven by our client acquisition and retention programs,
the launch of new products and services suited to the
what no amount of planning requirements of the retail and emerging sectors. The
synergy between branches and other sales desks will
or innovation can provide: a be strengthened to drive internal client sourcing, cross-
century of trustworthiness.” selling, and leads generation programs, while maintaining
prudent credit standards.
We recognize that digital is reshaping the banking
landscape; thus, we have been building our digital China Bank will expand in the consumer sector, with
capabilities and know how to respond effectively and the launch of new retail loan products while repackaging
efficiently. In 2019, we engaged tech giant Microsoft and improving the product features of existing ones.
for the development of strategies to future proof our This will be complemented by a suite of fee-based
operations. Our digital transformation initiatives will be products and services, such as non-life insurance, trust,
given further impetus with Manuel C. Tagaza as our Chief bancassurance, wealth management, and securities
Digital Officer. Leveraging technology and ensuring that brokering, as well as credit cards in order to achieve
all enhancements increasingly translate into seamless comprehensive product coverage.
and innovative banking services will shape the next 100
years of our progress. Our subsidiaries will likewise continue to pursue growth
goals and further harness the synergies of the China
As we mark China Bank’s centennial year this eventful Bank Group.
2020, we remain committed to providing the highest
quality of banking experience, and to becoming the China Bank Savings will further ramp up its Automatic
top choice for our multi-generational customers. Our Payroll Deduction (APD) portfolio by setting up additional
corporate objective is to be one of the best financial sales offices and customer touchpoints for easier loan
institutions in terms of profitability and shareholder value application and transaction.
over the next five years. To do so, we will focus on four
key goals: 1) growth in revenues and size of business; China Bank Insurance Brokers, Inc. and Manulife China
2) operational excellence; 3) a customer-centric approach Bank Life Assurance Corporation, will further deepen
to doing business; and 4) higher level of engagement market penetration through active leads generation in the
from the employees. various customer segments of the Bank, widen branch
network coverage, and solidify existing relationships
Depending on the economic effects of COVID-19 and the through the distinctive China Bank customer experience.
ECQ in Luzon, we will maintain a prudent stance in our
business operations.

8 C H I N A BA N K I N G C O R P O R AT I O N
China Bank Capital, together with China Bank Securities, On behalf of China Bank’s board of directors and
will sustain its momentum in the capital markets by leadership team, we thank you for your continued trust
actively participating in more underwriting deals, loan and patronage. We are also grateful for the hard work and
syndications, preferred shares issuance, project finance, dedication of China Bankers, most especially our front
advisory services, and stock brokerage. liners. It is our shared privilege and ongoing mission to
help businesses succeed and make a positive difference
A century of trust in the lives of the people and communities we serve.

2019 was a good year, and

in contrast, 2020 is shaping
out to be a very difficult one.
As we face the challenges of
the “new normal”, we offer
you and all our stakeholders HANS T. SY
Chairman of the Board
what no amount of planning & Executive Committee
or innovation can provide: a century of trustworthiness.
We have been working, with the guidance of the Board,
on crafting a strategic plan to navigate the drastically
different landscape of the post-COVID world, to remain a
sustainable bank, capable of doing more good, now and
GILBERT U. DEE
in the future. Vice Chairman

Like all the crises and hardships that humankind had to

endure in the past, this too shall pass. We march on,
with heaviness in our hearts for the lives lost but with a
sense of urgency to do what needs to be done to make
things better. WILLIAM C. WHANG
President
We would like to acknowledge the vision and business
acumen of our founders led by Dee C. Chuan and Albino
Z. SyCip for establishing China Bank’s corporate DNA,
and the succession of directors and leaders for laying a
strong foundation for our Bank’s growth and resilience.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 9
 Banking in the Time of COVID-19
The impact of the COVID-19 pandemic on our customers, employees, and
society as a whole is a great concern for China Bank. We are committed
to extend the help, support, and flexibility that our stakeholders need in
these extraordinary times. As the world navigates and adapts to the ”new
normal”, China Bank is here to serve. We stand by our stakeholders, ready to
undertake other supportive actions so that we all weather the crisis, recover,
and emerge stronger.

Safety and Business Continuity

Amid the constraints of the varying states of community quarantines in the country, we continue
to provide essential banking services while ensuring the safety of our employees and customers
and allowing some flexibility to ease consumer pain.

Whether China Bank employees are working in our branches, at critical units in the head office
and other offices, or from home, we are enabling them to do their jobs as safely as possible. And
although work environments have changed, our commitment to our customers remains the same.

During the Luzon-wide Enhanced Community Quarantine, human well-being took priority. We
paid our employees’ salaries and benefits in full, gave financial assistance to agency personnel
(security guards, drivers, janitors, and utility staff), and provided HMO coverage for COVID-related
treatment. For our customers, we waived certain fees and offered loan and credit card payment
extension, in line with the Bayanihan We Heal As One Act. At all our branches and offices, we
observed protocols on social distancing, temperature checks, wearing of masks, sanitation, and
disinfection.

10 C H I N A BA N K I N G C O R P O R AT I O N
 CHINA BANK’S COVID RESPONSE
FOR OUR EMPLOYEES FOR OUR CUSTOMERS
• Adjusted banking hours & work-from-home setup • Continued operations of selected branches
• Logistical support for frontliners (transportation, • Availability of e-banking channels: ATM, Online,
emergency allowance) Mobile App, Tellerphone
• HMO coverage for COVID-related treatment • Grace period for loans with due dates within ECQ period
• Continued to pay full salaries & benefits • Fee waivers: InstaPay, PesoNet and selected
• Financial assistance to agency personnel remittances
• HR guidelines on travel, self-quarantine, sanitation, • Increased daily ATM withdrawal limit to P50 thousand
temperature scanning • Availability of Customer Contact Center and other
customer feedback channels
• Proactive communication on social media to update,
assure, and guide customers

We took proactive measures to maintain a strong

cash position and recalibrated our strategies to adapt
Post-ECQ New Normal
to current market conditions. We temporarily paused
As we move forward in the new normal, we are
spending on non-critical projects, cut certain expenses,
committed to work prudently and pro-actively with our
and re-allocated funds to our COVID response. As of
customers, consistent with “safe and sound” practices,
this writing, we have spent approximately P140 million
to help individuals and businesses recover, to help
on the emergency allowances, transportation, and
protect jobs, and to help revitalize the economy.
accommodation for frontliners, financial assistance for
agency personnel, disinfection of buildings and common
We will continue to prioritize the safety and well-being
areas, and medical equipment/supplies.
of our employees and customers. We developed
workarounds and recalibrated our strategies and
Banking From Home contingency plans to adapt to current constraints and
market conditions, and manage loan stress and customer
expectations. In place are team rotation work schedules,
The pandemic accelerated the adoption of digital banking work from home arrangements, mandatory health and
as a way to safely and easily manage their money during safety measures, and case management protocols.
the quarantine period.
We are continuously re-evaluating our cyber resilience
In 2019, there were over 145 thousand users of China accordingly. The aim is to balance the need to support
Bank Online (retail), up 26% vs. 2018, and over 49 new ways of working and keep business processes and
thousand users of China Bank Mobile App, up 104%. As operations moving, with the need to secure data, identify
of May 31, 2020, China Bank Online has 153,000 users and protect vulnerable systems, and detect, respond and
and China Bank Mobile App has 61,500 users. Since recover from possible increased cyber attacks. We will
its launch in February 2018, the app has over 352,000 continue to be vigilant to ensure sound governance to
downloads. mitigate these.
Transactions through the Bank’s e-channels —China Bank The pandemic has upended all projections, but with the
Online, Mobile App, ATMs, TellerPhone, POS, CAM— efforts of the BSP, the banking industry in general, and
reached 23.7 million from January to May 2020, almost China Bank in particular, entered the crisis period well
42% of the 56.8 million e-banking transactions recorded capitalized and prepared for shocks. Our robust balance
for the whole of 2019. For the first five months of 2020, sheet and Business Continuity Management program
China Bank Mobile App users increased 83% and enable us to be financially and operationally resilient to
transactions surged 165% compared to the same period withstand this global health crisis. And we are prepared
last year. to do everything we can for our stakeholders until we see
this through together.
Mobile app sign-ups and usage were heaviest in April and
May. The top three mobile app transactions were balance
inquiry, fund transfer, and bills payment.

Customers will likely carry on embracing digital banking

and payments which they have been using to a greater
extent during the ECQ.
23.7 M 83% 165%
eBanking Increase in Increase in
Transactions China Bank China Bank
Mobile App Users Mobile App
transactions

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 11
 Financial Highlights
102-7

CONSOLIDATED PARENT COMPANY

2018 2019 2018 2019
For the Year (In Million Pesos)
Net Interest Income 22,926 26,051 19,577 22,658
Non-Interest Income 5,658 8,431 4,656 7,184
Operating Income 28,584 34,482 24,234 29,842
Provision for Impairment & Credit Losses 141 2,570 (2) 2,205
Operating Expenses 18,056 20,324 13,866 15,890
Net Income Attributable to Equity Holders of the Parent Bank 8, 110 10,069 8,110 10,069

At Year End (In Million Pesos)

Total Resources 866,072 962,226 778,253 870,180
Loan Portfolio (Net) 505,805 568,919 441,432 502,930
Investment Securities 190,235 212,836 178,727 206,846
Total Deposits 722,123 775,428 638,243 687,764
Stockholders’ Equity 87,857 96,176 87,852 96,163

Distribution Network and Manpower

Number of Branches 620 631 458 473
Number of ATMs 966 1,002 799 840
Number of Employees 9,652 9,813 6,829 7,141

Key Performance Indicators (In %)

Profitability
Return on Average Equity 9.54 11.04 9.54 11.04
Return on Average Assets 1.04 1.10 1.17 1.22
Net Interest Margin 3.56 3.39 3.42 3.26
Cost-to-Income Ratio 63 59 57 53
Liquidity
Liquid Assets to Total Assets 38 37 39 38
Loans (net) to Deposit Ratio 70 73 69 73
Asset Quality
Gross Non-Performing Loans (NPL) Ratio 1.2 1.5 0.6 1.0
NPL Cover 167 129 323 190
Capitalization
Common Equity Tier 1 Ratio (CET 1/Tier 1) 12.16 12.76 12.10 12.62
Capital Adequacy Ratio (Total CAR) 13.09 13.67 13.03 13.53

Shareholder Information
Market Value
Market Price Per Share (In Pesos) 27.10 25.05
Market Capitalization (In Million Pesos) 72,788 67,282
Valuation
Earnings Per Share (In Pesos) 3.02 3.75
Book Value Per Share (In Pesos) 32.71 35.80
Price to Book Ratio (x) 0.83 0.70
Price to Earnings Ratio 8.97 6.68
Dividends
Cash Dividends Paid (In Million Pesos) 2,229 2,364
Cash Dividends Per Share (In Pesos) 0.83 0.88
Cash Payout Ratio (In %) 30 29
Cash Dividend Yield (In %) 2.49 3.39

12 C H I N A BA N K I N G C O R P O R AT I O N
 NET INCOME TOTAL RESOURCES STOCKHOLDERS’ EQUITY
In Billion Pesos In Billion Pesos In Billion Pesos
962.2 96.2
10.1 87.9
866.1 83.7
8.1
751.4
7.5
6.5 633.2 63.4
59.2
526.8
5.6

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

DEPOSITS DISTRIBUTION NETWORK TOTAL CAR

In Billion Pesos Branches ATM In Percent
775.4 14.22
1,002

722.1 13.50 13.67

13.09
966

635.1 12.21
888
805

541.6
740

631
620

439.3
596
541
517

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

RETURN ON EQUITY CASH DIVIDENDS PAID MARKET CAPITALIZATION

In Percent In Billion Pesos In Billion Pesos
2.4
11.04 89.4
10.42 2.2
10.01
9.62 9.54 2.0
1.9 76.1
72.8
1.7 69.0 67.3

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 13
 SDG Contribution - Core Areas
203-2

How we contribute Performance 2018 2019

Target 1.4 Making banking Customers nationwide 1.5 M 1.7 M

Equal rights
to economic
accessible and
resources convenient through Personal loans P4.4 B P10.0 B
distribution network Direct economic value
expansion, digital distributed P23.2 B P27.0 B
innovation, and
systems and process
improvements to
Target 3.8 encourage more
Financial risk Number of insured lives 111,905 128,290
people, especially
protection
the unbanked sector, Life insurance claims
paid P110 M P77 M
to join the formal
financial system.

Target 4.6 Prudently managing Beneficiaries of financial

Literacy and our risks, capital, literacy programs 28,400 21,200
numeracy
and balance sheet
to remain profitable
and capable of
supporting the
Philippines’ economic
development.
Target 5.5 Percentage of China Bank
Equal leadership officers that are Female 63% 67%
opportunities for Promoting financial
women
education and
developing affordable
and innovative
banking, insurance,
and financial products
and services to help
Target 8.10
Access to banking, more people achieve Branches 620 631
insurance, and their dreams and
financial services secure their financial ATMs 966 1,002
for all
future. Number of no maintaining/
Target 8.5 no minimum balance
Full and productive accounts 200,351 243,549
employment and Providing equal Number of full-time
equal pay for work 9,652 9,813
of equal value opportunities for employees
gainful employment Salary and benefits paid
Target 8.8 and equitable to employees P6.1 B P6.6 B
Labor rights
and safe and
compensation while
secure working ensuring employees’ Safe man-hours recorded 20.1 M 20.3 M
environments overall wellbeing.

14 C H I N A BA N K I N G C O R P O R AT I O N
 How we contribute Performance 2018 2019

Target 7.1 Supporting key Loans for energy access P7.0 B P11.9 B
Access to energy
business sectors in Renewable energy
driving sustainable financed P7.2 B P8.6 B
industrialization.

Target 9.3 Commercial & SME loans P84 B P89 B

Access to
affordable credit
Supporting the
SME and middle
market segments to
increase their capacity
Target 11.1 P59 B P72 B
Affordable
for growth and Housing loans*
housing for all expansion.
Auto loans P22 B P23 B
Target 11.2
Access to * Includes Contract-to-Sell loans
sustainable
transport
Actively lending to
support home and
vehicle ownership and
Target 12.6 help raise the quality Annual Financial &
Sustainable Sustainability Report 2nd 3rd
practices
of life.

Investing in and
Target 13.A raising finance for Drawdown
Green Bond US$150 M of the Green
Climate change climate-smart projects Bond
mitigation
to help accelerate the
transition to a low-
carbon economy.

Target 16.5 Employees trained on

Reduction of bribery
Adopting global
anti-bribery and anti-
and corruption best practices and corruption 1,658 3,574
upholding the highest
Target 16.6 Governance awards Among the 4-Golden
Effective,
governance standards 50 best Arrow
accountable, to ensure sustainable ASEAN PLCs awardee
in corporate for corporate
and transparent value creation for all governance governance
institutions stakeholders excellence

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 15
 Sustainability at China Bank
At China Bank, we are determined to move forward in a sustainable way. We are building a stronger customer-centric
bank that is ready for a more digital future and capable of doing more good for this generation and the next. We are
committed to continue our 100-year legacy of ethical and responsible banking by faithfully fulfilling our roles to our
stakeholders, in line with our mission to be a catalyst of wealth and value creation.

Sustainability Journey

19 19 19 19
20 27 45 54
Founder Dee C. Chuan Becomes one of the first After being shut down Initiates the Liberty Wells
leads a group of top companies to list on the during the Japanese project, building over
Chinese businessmen Manila Stock Exchange occupation, China Bank 20,000 artesian wells and
and opens China Bank on reopens and developing over 2,000
August 16, 1920 in Binondo, lends heavily springs over the next 13
Manila for post-war years to provide rural
rehabilitation, villages with potable water
granting over
P182 million
by the end of
1950

20 20 20 20
10 10 09 07
Wins PSE Bell Award for Begins replacing CFLs Inaugurates China Bank Acquires Manila Bank
Corporate Governance and with LED lights, retrofitting Academy and embarks on and operates it as China
goes on to win the award for ventilation systems to be a new program to improve Bank Savings; signs
the next 6 years more energy efficient, and employee training and bancassurance joint
acquiring new A/C units development venture with Manulife
with Variable Refrigerant
Volume
Donates cash and relief

20 goods to help victims of

typhoons Pedring, Quiel,

12 and Sendong; establishes

calamity fund to raise funds
for subsequent calamities

20 20 20 20
12 14 15 17
Acquires Pampanga-based Acquires Planters Launches China Bank Gets investment grade
Unity Bank Development Bank; raises Capital and credit card credit rating of “Baa2” from
P8 B from stock rights offer business; rolls out new and Moody’s; raises P15 B from
more robust core banking stock rights offer
system, Finacle Core
Banking Solution

16 C H I N A BA N K I N G C O R P O R AT I O N
 19 19 19 19
69 70 90 91
Becomes the Donates the amount Head office officially Acquires universal banking
first bank in appropriated for the 50th transfers to Makati City license and Introduces
Southeast Asia anniversary celebration TellerPhone, the first phone
to process to various charities banking service in the country
deposits on-line

Accesses the offshore

capital markets, with
US$50 M Floating Rate 19
Certificate of Deposit
(and US$75 M in 1997)
96

20 20 20 19
06 05 00 97
Completes the first Launches China Bank Donates P1M to Tabang Becomes best capitalized
international US$53 M Online for fast and Mindanaw to help the local bank during the Asian
secondary share offering convenient Internet banking victims of armed conflict in Financial Crisis, after a 2 for
Mindanao every 3 shares stock
rights offering

20 20 20 20
18 18 18 19
Raises P10.25 B via Ranks among the Signs US$150 M Raises P30 B via fixed rate retail
LTNCD issue Top 50 best publicly Green Bond bond issue; starts restoration of
listed companies in agreement with IFC original head office in Binondo
ASEAN

Legend: Economic Environmental Social Governance

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 17
 Sustainability Strategy and Roadmap
Banking is a stakeholder business. China Bank’s sustainability is underpinned by the enduring
relationships of trust we have built with our customers, employees, investors, regulators, and society
in general. We are driven to continuously create value by delivering on our role to our stakeholders and
contributing to the achievement of the Sustainable Development Goals.

OUR SDG
METRICS
MISSION Contribution

• Number of branches and ATMs • Remittance volume • Target 1.4 • Target 13.A
• Number of customers • Loan volume • Target 3.8 • Target 7.1
AS • New products/ services launched • Deal volume • Target 8.10 • Target 11.1,
ENABLER • Transaction volume (E-banking) • Investment volume • Target 9.3 11.2
• Deposit volume • Insurance volume

• Customer Satisfaction rating • Target 16.6

• Volume of inquiries, requests, complaints received
AS • Number of reported concerns
ADVOCATE • Complaint resolution rate

• Number of employees • Attrition rate • Target 5.5

• Number of new hires • Retention rate • Target 8.5
AS • Workforce proportion in terms of • Number of engagement, team • Target 8.8
EMPLOYER gender, age, and rank effectiveness, and work-life
• Number of employees promoted integration programs
• Number of training hours

• Economic value distributed • Target 1.4

• Energy and fuel consumption Scope 2 and Scope 1 GHG emissions • Target 4.6
AS • Number and impact of Corporate Social Responsibility programs and activities
PARTNER

• Board Direction and Senior Management performance • Target 12.6

• Governance policies and ethical business practices • Target 16.5, 16.6
AS • Board and Board Committee meetings, directors’ attendance, and assessments
STEWARD • Compliance with the ASEAN Corporate Governance Scorecard
• Governance awards

Developing new shared value approaches to better serve the needs of and continue
to make a positive impact on our stakeholders

Setting ambitious targets to scale up contribution to the SDGs

18 C H I N A BA N K I N G C O R P O R AT I O N
Listening to our Stakeholders
Finding the sustainable way forward starts with finding out what matters to our stakeholders,
what they think of our performance, and how we can improve our practices and better respond
to their expectations. We use these insights to shape our activities and reporting.

Materiality Process
102-42, 102-46, 103-1

Addressing what’s important to our stakeholders and our business is an opportunity for us to strengthen
our Bank, improve the way we do businesses, and create sustainable value.

In 2019, we conducted a materiality assessment to identify and prioritize China Bank’s material
sustainability topics. We engaged an external consultant, Business for Sustainable Development,
formerly known as Philippine Business for the Environment (PBE), to provide additional rigor and analysis
to the process.

BENCHMARKING
We researched competitors, international standards of best practice and globally accepted
frameworks, and peer companies to establish a baseline understanding of trends, best practices, and
material topics in the banking industry.

1
IDENTIFICATION
We consulted our key stakeholder groups to identify an array of environmental, social, and governance
topics. To gain broader perspective on these topics of interest, we also reviewed various stakeholder
reports, investor briefing materials, results of our customer satisfaction surveys, and other sources.

2
PRIORITIZATION
We conducted working sessions, face-to-face interviews, and phone/email consultations with our senior
management and various business groups and select external stakeholders. We asked the respondents to
select issues that present significant risk, leadership opportunities, or long-term effects on our business.

3
VALIDATION
We consolidated their feedback, confirmed with the various business groups that all significant
aspects and impacts have been considered, and presented the materiality results to senior
management.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 19
 Stakeholder Engagement
102-40, 102-43, 102-44

Our ongoing engagement and dialogue with our stakeholders enable us to understand their concerns and
expectations. Analysing, assessing, and responding to their feedback are fundamental to our effort to operate as
a responsible bank and to ensure the success of our activities along the value chain.

Our
Key Engagement Channels Frequency Concerns Response
stakeholders
Customers • Commercial channels • Continuous • Service quality • Continuous service,
• Customers Satisfaction • Continuous • Reliability and security of process, and technology
survey electronic banking channels improvements
• Economic briefing • Annual • Accessibility of branches • Ongoing branch and ATM
• Wealth Management forum • Annual • Easy account opening/loan network expansion
• Complaints management • Continuous application requirements and • Ongoing capacity building:
processes hiring people with the
• Sound financial advice right qualifications,
• Capable personnel to efficiently competencies, and
address concerns attitude and further
• Fast complaints resolution developing their skills
through training

Employees • Internal Customer • Annual • Career development • Continuous

Satisfaction Survey • Equitable compensation implementation and
• Work-life Integration • Continuous • Work-life balance enhancement of
Programs • Understanding of organizational employee recruitment,
• Employee Engagement • Continuous goals development, and
Programs engagement programs
• Whistleblowing channels • Continuous • Cascade of Wildly
Important Goals (WIGs)

Shareholders • Stockholders’ Meeting • Annual • Shareholder returns • Timely and transparent

• Group Strategy Update • Annual • Financial performance updates and disclosures
• Shareholder service • Continuous • Continued growth, managed risks • Continuous fiscal
• Investor forum/road show • Continuous management and
risk management
improvement to enhance
profitability and deliver
dividends

Communities • Collaborations with • Continuous • Support for projects and initiatives • Participation in and
NGOs, public schools, and • Collaboration support of worthy causes
charitable institutions • Feedback on activities conducted • Continuous enhancement
• Active membership in and • Continuous of community relations
collaboration with industry • Constant communication
groups
• Social networks • Continuous

Regulators • Regular audits and reports • Continuous • Transparency and accountability • Prompt response to
• BSP examination • Annual • Compliance with relevant inquiries and requests
Philippine laws,rules, and for explanation on certain
regulations matters
• Responsible lending • Timely and transparent
• Ethics and compliance disclosures and regulatory
compliance reports
• Cascade of policies and
regular updates
• Annual conduct of internal
and external audits
Suppliers and • Accreditation • Continuous • Procurement policies • Cascade of policies and
contractors • Procurement process • Continuous regular updates

20 C H I N A BA N K I N G C O R P O R AT I O N
 What our Stakeholders are Saying
102-46, 102-47

Our materiality study combined internal and external perspectives and included quantitative and
qualitative analyses to draw up a table of the most relevant subject areas for China Bank in 2019.

Materiality Matrix

Ethical and fair business

Relevant products and conduct and practices
responsive services
Most relevant to stakeholders

Strong governance
Consumer protection
Customer satisfaction
Convenient access to products Regulatory compliance
and services/financial inclusion
Cybersecurity

Effective risk management

and control
Employee well-being

Financial performance
Talent acquisition
and development
Responsible lending

Talent engagement and

retention
Environmental footprint

Community support

Most relevant to China Bank

Economic Environmental Social Governance

Key Themes
For a more cohesive reporting, we arranged our 16 material topics into five themes, in line with
our sustainability strategy.

Theme Why It’s Important

Enabling customers’ Our core business is to deliver exceptional service and provide convenient access to fair and affordable
success financial solutions to help our customers achieve their financial goals.
Advocating for our Building strong customer relationships is paramount to our business. We aim to delight customers,
customers ensuring China Bank is always reliable, easy to deal with, and responsive to their concerns.
Being a good steward We earn the trust and confidence of our shareholders, customers, employees, and other stakeholders by
being a responsible business with robust governance systems that drive good decision making, ethical
business conduct, and effective risk management.
Engaging our people An engaged and productive workforce is vital to delivering on our commitments to our stakeholders and
to achieving our goals. We take care of our employees, develop their skills, and listen to them.
Partnering with and for We play an important role in nation building, in supporting our communities, and in protecting the
our communities environment. We focus our efforts on promoting financial literacy, helping marginalized groups, and
managing our carbon footprint.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 21
 Enabling Customers’ Success
When our customers succeed, so do we. We are committed to be our customers’
right banking partner and to help them achieve their financial goals at any life stage.
We offer financial products, services, and advice suited to their particular situation and
needs, and we make it easy for them to bank with us. We are continuously working on
improving every aspect of our business to ensure we deliver real outcomes that make
our customers’ lives better, the economy stronger, and China Bank more sustainable.

Target 1.4 Target 3.8 Target 7.1 Target 8.10

Equal rights Financial risk Access to Access to
to economic protection energy banking,
resources insurance,
and financial
services for all

Target 9.3 Target 11.1 Target 13.A

Access to Affordable Climate
affordable housing for all change
credit Target 11.2 mitigation
Access to
sustainable
transport

22 C H I N A BA N K I N G C O R P O R AT I O N
 CHINA BANK
AS ENABLER

Convenient Access
We are just within easy reach of our customers—through
our strategically-located branches nationwide, electronic
banking channels, and Customer Contact Center. Our
branches are still the primary customer relationship channel
where more personal service and in-depth interactions
occur, including advisory services, cross-selling and up-
selling, and overall relationship management. And with our
convenient and secure e-banking channels, customers can
choose how, when, and where they want to bank with us.

To make our services more accessible in 2019, we

expanded our distribution network by 11 branches and 36
ATMs, extended banking hours – up to 5 PM for regular Distribution Network
branches and longer operating hours for mall-based Branches 2017 2018 2019
branches, and added more branches open on Saturdays. China Bank 436 458 473
CBS 160 162 158
In line with our ongoing strategy to improve customer TOTAL 596 620 631
service, we enhanced the features of our e-banking ATM 2017 2018 2019
channels and simplified/automated certain processes. China Bank 724 799 840
Enrollment in China Bank Online and China Bank Mobile CBS 164 167 162
App surged 26% and 104%, respectively. The number TOTAL 888 966 1,002
of transactions via these channels (including China Bank
ATMs) grew 14% to 57 million.

Client Base Per Channel

2017 2018 2019
China Bank ATM 721,600 829,800 965,000
China Bank Online (Retail) 83,200 114,900 144,900
China Bank Mobile App* 24,100 49,100
* Launched in February 2018

NUMBER OF E-CHANNEL TRANSACTIONS*

In Millions
Convenience for beep™ cardholders
56.8 China Bank is the first bank to offer the beep™ card
50.0 reloading service via ATM. In October 2018, we
43.2
inked the agreement with AF Payments, operator of
the beep™ tap-and-go payment system. As of 2019,
a total of 100 China Bank and China Bank Savings
ATMs strategically located near LRT and MRT
stations and P2P bus terminals have been equipped
for beep™ card loading.

China Bank ATM cardholders can conveniently check

their beep™ card and reload from a minimum of
2017 2018 2019 P100 up to P10,000, in multiples of P100. The load
amount is debited from their China Bank account
* e-Channels: China Bank ATM, Online, Mobile App, TellerPhone, Point-of-Sale
and instantly stored in their beep™ cards.
(POS), Cash Accept Machine (CAM)

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 23
 Deposits
We actively promote savings consciousness to help build
a savings culture in the Philippines. Our continued service
and product enhancements, branch-based marketing
activities, and financial literacy programs enable us to
capture more opportunities for customer acquisition and
deposit generation despite the lack of advertising. In
2019, total deposits grew 7% to P775 billion, underpinned
by P412 billion in CASA deposits (Checking and Savings
Accounts), up 3%. Our no opening/ maintaining balance
deposits accounts, China Bank Overseas Kababayan
Savings and CBS Easi-Save Basic, supported by our year-
round financial awareness campaigns, encouraged more Recognition for CBS’ financial
people to save. The number of accounts under these wellness programs
deposit products increased 22% to over 243 thousand The Department of Education (DepEd) recognized
accounts. And as we continued to promote the China Bank Savings (CBS) for programs that promote
habit of saving even at a young age, the number of financial wellness among teachers and improve the
CBS Easi-Save Kids accounts increased 13% to 9,170. quality of public education in the country. These
include CBS’ Financial Wellness Road Show for public
Deposits school teachers and staff, CBS DepEdVenture: Alay sa
2017 2018 2019 mga Guro, and contributions to the Brigada Eskwela
CASA P343 B P401 B P412 B campus rehabilitation and Nutrition Month campaigns
High cost P292 B P321 B P363 B of the government. DepEd also commended CBS
Total P635 B P722 B P775 B for promoting savings consciousness and bank
participation among kids and teens through the
Financial WYFi (Wellness for Young Filipinos) program
Investments and for its support to help improve literacy among
the indigenous Remontado Dumagat people in Rizal
We are committed to help our customers prosper by
province through Project RED.
helping them maximize their money’s earning potential.
Whether first time investors or investment-savvy
CBS is an advocate of financial education and the
customers, we guide them through the investment
welfare of public school teachers. At DepEd’s national
process, explaining the features, benefits, and risks
celebration of World Teacher’s Day on October 5, 2019,
involved to help them choose the right investment suited
CBS donated prizes worth over P1 million for the
to their financial objectives, risk appetite, and time frame.
teachers who participated in the event.
Through our Trust and Asset Management Group, we offer
customers ten Unit Investment Trust Fund (UITF) products
the advantage of having a competent trustee to manage Money Market Fund. In 2019, our Trust assets under
their investment portfolio, estate, and retirement funds, management (AUM) grew 27% to P169 billion, the 5th
and the benefit of having a reliable escrow agent for largest out of 44 trust institutions in the Philippines.
business transactions involving large sums of money. To
make investing in UITFs more affordable, we reduced the Trust
minimum initial investment to only P5,000 for the peso- 2017 2018 2019
denominated variants and only $500 for the US dollar AUM P132 B P134 B P169 B
variants, China Bank Dollar Fund and China Bank Dollar Number of accounts 16,700 19,800 25,300

24 C H I N A BA N K I N G C O R P O R AT I O N
 CHINA BANK
AS ENABLER

Best Managed Fund of the Year

The CFA Society Philippines named China Bank
Dollar Fund as the Best Managed Fund of the
Year in the long-term (Dollar FVPL) category
for the fourth time in a row, a testament to
the Bank’s commitment to providing the
best returns to investors. The China Bank
Dollar Fund is invested in a portfolio of US
dollar-denominated securities consisting
principally of government/corporate bonds
and bank deposits of varying tenors to provide
investors with relatively higher yields than
deposit accounts. It is suitable for investors
with moderate risk appetite. The CFA Society
Philippines is the local chapter of the CFA
Institute, a global network of investment and
finance professionals and their partners in over
163 countries.

China Bank is a Government Securities Eligible Dealer As our customers accumulate wealth, we provide wealth
(GSED), a registered broker-dealer of fixed income management services to help them effectively and
securities with the Securities and Exchange Commission, efficiently manage, enhance, and preserve it. Leveraging
and a brokering participant in the Fixed Income Trading the expertise of our seasoned team of relationship
Platform of the Philippine Dealing and Exchange managers and broad access to market information, our
Corporation. Through our Treasury Group, we offer affluent clients enjoy customized solutions, superior
customers access to direct investments in government long-term returns, and highly personalized service. In the
securities issued by the Bureau of Treasury and to third quarter of 2019, our Wealth Management Division
highly-rated bonds of various maturities issued by prime embarked on a brand refresh initiative primarily aimed
Philippine corporations. In 2019, we ranked 6th out of 33 at positioning the business to be more responsive and
broker participants in fixed income trading volume, with relevant to the high net worth segment. This will ensure
P128 billion, up 57% from 2018. In terms of number of that Wealth Management will continue to be a valuable
trades, we ranked 2nd, with 17,732 deals, representing partner in wealth creation, preservation, and transfer
16% of total market trades. across generations. In 2019, Wealth Management Division
posted a 21% growth in AUM to P128 billion.
Fixed Income
2017 2018 2019 Wealth Management
Trading volume P87 B P82 B P128 B 2017 2018 2019
Number of trades 6,026 9,335 17,732 AUM P85 B P106 B P128 B

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 25
 Remittance Consumer Loans
203-2
We want to be a reliable banking partner to our modern-
day heroes, the overseas Filipino workers (OFWs), and We want to help our customers achieve their dreams,
help them make the most of their hard-earned money. We enjoy the good life, and when faced with difficulties,
ensure that sending and receiving money through China to count on us to support them. Our competitive
Bank is fast, secure, and affordable. We also make it consumer loan rates and fast processing made our
rewarding with our year-round promotions that give OFWs consumer loan products attractive and accessible.
the chance to win cash and other exciting prizes. From We continued to strengthen business relationships
abroad, remitters can choose to send money via direct with developers and dealers, and at the same time,
credit to their China Bank account or with any other bank the branches heightened their efforts to market our
in the Philippines, via cash pick up from our domestic cash consumer loans. In 2019, our consumer loans portfolio
pay-out network of close to 10,000 locations nationwide, or grew 22% to P107 billion in real estate, auto, and
via cash delivery to the beneficiaries’ doorstep. personal loans (includes credit cards and salary loans).

Beyond remittances, we also contribute to the financial Consumer Loans

well-being of OFWs and their families through the 2017 2018 2019
Overseas Kababayan Services and ongoing financial Housing* P 50 B P 59 B P 72 B
literacy campaigns, including pre-departure orientation Auto P 19 B P 22 B P 23 B
seminars (PDOS) and basic money management briefings Credit Cards P 1B P 1B P 2B
for students with OFW parents. Personal P 3B P 4B P 10 B
Total P 74 B P 87 B P 107 B
In 2019, we processed 3 million remittance transactions, Share to total loan
16% 17% 18%
with a remittance volume of US$2.2 billion. portfolio
*Includes contract to sell

Remittance
2017 2018 2019
Volume US$1.6 B US$3.2 B US$2.2 B
No. of transactions 2,880,000 4,037,000 3,078,000

26 C H I N A BA N K I N G C O R P O R AT I O N
 CHINA BANK
AS ENABLER

The free insurance and CBS’ continued engagement

programs for public school teachers like the CBS
DepEdVenture contributed to the 171% growth in loan
volume and 132% increase in borrowers in 2019.

Easi-APDS Loans
2017 2018 2019
Amount disbursed P1.7 B P3.5 B P9.5 B
No. of borrowers 13,305 28,169 65,392

To enable our customers enjoy spending flexibility,

we entered the credit card business in 2015. We
launched two new credit card variants in 2019,
bringing our credit card offerings to five. China Bank
Cash Rewards Mastercard provides up to 6% cash
rewards on purchases. On the other hand, China Bank
Freedom Mastercard offers perpetual waiver of annual
membership fees and access to exclusive rewards and
deals. We also continued to push paperless statements
for monthly billings to save on printing and delivery
costs. In 2019, 9% more cardholders were encouraged
to enroll in E-SOA, opting to receive their monthly
statements via email instead of courier delivery. As
we continued to expand our merchant partnerships to
provide our credit cardholders with more discounts and
special privileges, our cardholder base increased 13% to
54,165 while gross billings rose 17% to P6.3 billion.
Business Loans
203-2

China Bank Credit Cards From starting to expanding a business, funding can be the
2017 2018 2019 key to success. We offer a full range of loan and credit
Cardholders 44,806 47,776 54,165 facilities for businesses of all sizes, combining advisory
and cash management services with our financing
Gross billings P5.2 B P5.4 B P6.3 B
solutions to address the diverse needs of entrepreneurs to
conglomerates. In 2019, we mobilized a total of P471 billion
We are breaking down barriers for low income
in corporate and commercial loans, 11% higher than in 2018,
individuals to have access to affordable credit. Through
to help businesses achieve their short-term and long-term
CBS, we offer personal loans, handy salary loans, and
goals. Of this amount, P89 billion was lent out to our SME
for the teaching and non-teaching employees of the
and commercial customers.
Department of Education and its affiliated agencies, we
offer the Easi-Automatic Payroll Deduction Salary (Easi-
Corporate and Commercial Loans
APDS) loan. In 2018, CBS partnered with Manulife China
2017 2018 2019
Bank Life Assurance Corporation (MCBLife) to provide
Easi-APDS borrowers with free life insurance coverage. Amount P382 B P426 B P471 B
Share to total loan
84% 83% 82%
portfolio

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 27
 In 2019, our loan portfolio grew 13% to P578 billion,
consisting of loans to consumers and to businesses in
Capital and Equities Markets
various industries. Over P131 billion or 23% was lent to the We actively promote the development of the Philippines’
real estate, renting, and business services sector, while 14% capital and equities markets to help the private and
or almost P81 billion was channeled to finance projects of government sectors raise funds to finance expansion
electricity, gas, and water industries. projects and infrastructure developments, and at the same
time, provide our customers with more investment options
such as fixed income securities, equities, and IPOs. Through
China Bank Capital and China Bank Securities, we are
Breakdown of 2019 loan portfolio: establishing a strong presence in the country’s capital and
equities markets, playing various key roles in the issuances
of the Bureau of Treasury and the country’s top corporations.

Real estate, renting, and business services 22.77%

Electricity, gas, and water 13.98% Award-winning infrastructure deals
Financial intermediaries 11.00% China Bank and China Bank Capital were recognized
Wholesale and retail trade 10.27% at The Asset Triple A Asia Infrastructure Awards 2019
Transportation, storage, and communication 10.00% for our role in the P6-billion term loan facility for
Manufacturing 5.61% Atlantic Gulf and Pacific Company (AG&P), awarded
Arts, entertainment, and recreation 3.10% as the Oil and Gas Deal of the Year, and the P9-
Accommodation and food service activities 2.22% billion financing for Apo Agua Infrastructura, named
Construction 2.27% Utility Deal of the Year. China Bank Capital was lead
Mining and quarrying 1.73% arranger of the AG&P transaction, while China Bank
Agriculture 1.15% served as a lender alongside the Development Bank
Education 1.09% of the Philippines. For Apo Agua, the Bank and
Public administration and defense 0.71% China Bank Capital were lender and co-lead arranger,
Professional, scientific, and technical activities 0.13% respectively.
Others* 13.98%

*Consists of administrative and support service, health, household, and other

activities

28 C H I N A BA N K I N G C O R P O R AT I O N
 CHINA BANK
AS ENABLER

China Bank issues P30-billion bonds

China Bank successfully raised P30 billion via the maiden
issue of peso fixed rate bonds. Due January 2021, the
bonds carry an annual interest rate of 5.70%, which will be Insurance
paid monthly. They were listed on the Philippine Dealing &
Exchange on July 10, 2019. The offer was upsized to P30 We help our customers secure their financial future not
billion from the initial target of P5 billion to accommodate only through deposit and investment products, but also
strong investor demand. It was one of the largest through innovative insurance solutions. Through China
corporate bond issuances on a single issuance in 2019, a Bank Life Assurance Corp. (MCBLife) and Chinabank
testament to the Bank’s placement capabilities, solid client Insurance Brokerage Inc. (CIBI), we offer our customers
support, and strong distribution reach. security and peace of mind that they are well prepared
for life’s eventualities and unforeseen events. Our
This bond issue forms part of the Bank’s planned P75-billion customer-centric approach, roster of A-rated insurers,
fund raising program for the next three years to support robust brokering and claims infrastructure ensure that
expansion and strategic initiatives. Last year, China Bank our customers receive the right insurance policy for their
raised P10.25 billion via LTNCD. specific needs and circumstances, and enjoy hassle-free
claims procedure.

We also tapped the capital market in line with our objective In 2019, MCBLife’s total gross premiums dropped 10% to
to strengthen China Bank’s capital base and funding P7.9 billion, but the number of insured lives increased 15%
flexibility to support lending activities and strategic initiatives. to 128,290. Insurance claims payments decreased 30% to
In 2019, we participated in almost 50 deals, raising P557 P77 million. Meanwhile, CIBI recorded a 24% increase in
billion and US$890 million, including China Bank’s P30 billion premiums to P910 million and an 18% drop in insurance
fixed rate bonds. For the third year in a row, China Bank claims payments to P108 million.
Capital ranked number one in retail bond issue, with 24%
market share. MCBLife
2017 2018 2019
Capital and Equities Markets Premiums P8.4 B P8.8 B P7.9 B
Peso (in Billions) 2017 2018 2019 Claims paid P79 M P110 M P77 M
Government 255 0 259
Corporations 401 289 282 CIBI
Total 656 289 541 2017 2018 2019
Dollar (in Millions) 2017 2018 2019 Premiums P678 M P737 M P910 M
Government 0 0 0 Claims paid P96 M P132 M P108 M
Corporations 2,310 675 1,285
Total 2,310 675 1,285

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 29
 Advocating for our customers
We strive to build trust and confidence at all stages of our relationship with our
customers by serving them well, listening to what they want, and helping them
make informed financial decisions. Throughout the Bank’s history, we have
remained steadfast to our commitment to provide fair, convenient, responsive,
and secure banking services, while embracing and humanizing technology to
meet our customers’ financial needs and expectations. As we grow alongside
our customers, we are continually improving and innovating to ensure great
customer experiences with every encounter, at any banking channel.

Target 16.6
16 Effective,
accountable, and
transparent
institution

30 C H I N A BA N K I N G C O R P O R AT I O N
 CHINA BANK
AS ADVOCATE

Consumer Protection Customer Contact Center

Consumer protection is a fundamental responsibility for The Bank’s Customer Contact Center (CCC), headed
China Bank. Across our operations, in our dealings with by the Chief Consumer Assistance Officer (CCAO), has
all our customers and other stakeholders, and in the the primary responsibility of ensuring that customer
development and delivery of our products and services, inquiries, requests, and complaints are monitored and
we uphold consumer protection standards and practices. handled promptly and properly, in accordance with our
established standard handling and escalation procedures
The Board is responsible for approving and overseeing and service levels.
the implementation of our Consumer Protection Risk
Management System and Consumer Assistance Customer Assistance Channels
Mechanism (CAM), while Management is in charge Aside from China Bank branches nationwide, CCC
of its proper implementation, ensuring the effective maintains various channels through which our customers
management of day-to-day consumer protection activities, can conveniently reach us and get assistance.
and strict compliance with internal policies and applicable
laws and regulations. Customer Contact Center Hotline
Customer Contact Center Hotline
The Board is apprised on a regular basis of the terms and Metro Manila: 888-55-888
measures of consumer protection related risks, reports Domestic Toll-Free: 1-800-1888-5888 (PLDT)
on CAMs and others similar matters that will impact the International Toll-free: Visit www.chinabank.ph
Bank. for the list of countries and toll-free numbers

The Bank’s Consumer Protection Framework is composed Email

of the following pillars to ensure its effectiveness in the online@chinabank.ph
implementation process:
Viber
+639178814263
Board and Management
Responsibility Facebook
www.facebook.com/chinabankph

Twitter
Consumer Protection Risk www.twitter.com/chinabankph
Management System
Fax:
(632) 8519-0143

Mail:
Institutional Culture Customer Contact Center, China Bank Building,
8745 Paseo de Roxas corner Villar St.,
Makati City 1226 Philippines

For reports on fraudulent activities or unethical behavior,

Disclosure and customers can also use our Whistleblowing channel.
Transparency See page 46 for details.

For general information on China Bank, including

products, services, and corporate developments,
Effective and Robust customers can visit www.chinabank.ph.
Complaints Handling

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 31
 Complaint resolution The Information Security Office (ISO), headed by the
Excellent customer service means being attentive and Chief Information Security Officer (CISO), is responsible
responsive to customers’ needs. Inquiries are responded for developing, updating, and implementing China Bank’s
to immediately or on the next banking day, while Information Security Plan. The Plan covers among others,
requests and complaints are duly acknowledged within the identification and assessment of the risks to customer
the prescribed period and recorded using our centralized information in each relevant area of operation, and the
complaints management system for proper monitoring, design, implementation, and monitoring of our safeguard
resolution, and reporting. The CCC consolidates the daily program. In 2019, no significant data privacy breaches
reports of complaints received into a monthly report, with were recorded.
general descriptions of resolutions and actions taken,
submitted to the Risk Oversight Committee through the
Risk Management Group (RMG). The CCC also prepares
a quarterly report to the Supervisory Data Center of the
Bangko Sentral ng Pilipinas (BSP).

In 2019, 12,294 complaints were recorded, 10% higher

than in 2018. CCC resolved 97% of the concerns within
the turnaround time set by the BSP. For the second time
in 2019, China Bank won the BSP’s Pagtugon Award
for Universal and Commercial Banks for excellence in
addressing customer complaints.

Complaints received, processed, and resolved

Category 2017 2018 2019
Alternative channels*
Credit Cards
6,117
2,054
8,668
1,946
10,786
1,001
Cyber Security
Deposits & branch The Bank is methodical and diligent in protecting assets and
297 290 349
banking transactions from cyber threats and in managing the Bank’s
Others 180 241 158 Information Technology (IT) risk. In place are security policies,
Total 8,648 11,145 12,294 systems, and protocols to provide a safe and secure banking
*ATM, China Bank Online, China Bank Mobile App-related concerns environment for our customers, and to ensure compliance
with all applicable IT laws and regulations. The IT Team
(China Bank Properties & Computer Center, Inc.), led by
Data Privacy the Chief Technology Officer (CTO), work hand in hand with
ISO and RMG in managing and implementing the Bank’s
Protecting customers’ data and privacy is of utmost IT security strategy. As China Bank increasingly becomes
importance to China Bank and we are continually investing digital, we continue to strengthen our security foundation
to improve our security measures. In place are data with preventive, detective, and responsive layers, while
privacy policies and procedures on the use, distribution, proactively enforcing cyber security governance bank wide.
storage and eventual disposal of customer information Cyber security awareness is not only promoted internally
obtained by the Bank in the regular course of transaction, through employee trainings and refresher courses, but also
as well as employee training programs on confidentiality cascaded to customers and the banking public via security
and security standards for handling customer information. tips and reminders posted on China Bank’s website and
social media accounts. In 2019, no significant cyber attacks
were recorded.

32 C H I N A BA N K I N G C O R P O R AT I O N
 CHINA BANK
AS ADVOCATE

Branch Customer Feedback

China Bank branches are still the main service delivery
channel; thus, it is important for us to know if we are
meeting our customers’ expectations when they transact
at our branches. The Service Standards and Quality
Department (SSQD) conducts a monthly survey to
measure customer satisfaction at the branch level. The
Branch personnel proactively encourage customers to
participate in the survey by filling in feedback forms
available at our branches year-round, and SSQD
consolidates the responses and reports the results to the
head of Retail Banking Business and the entire branch
network management. In 2019, the Bank achieved an
Overall Satisfaction rating of 94%.

Branch Customer Feedback/Survey Report

Attributes 2017 2018 2019
Overall Satisfaction 93% 95% 94%
Queue Time 91% 94% 93% Customer Information and
Account Opening 96% 96% 97% Financial Education
Deposit/Withdrawal 93% 95% 95%
Branch Premises 95% 96% 96% Financial education is an integral component of our
ATM Services 96% 96% 95% ongoing interaction and relationship with our customers.
Security Guards 96% 97% 97% In advertisements, marketing materials, and customer
communications, the Bank is transparent and truthful
about products and services, fees, and charges. All
branch personnel, relationship managers, account
officers, and Phone Bankers are adequately trained
to answer questions about China Bank products and
services, explain the risks that certain products and
services carry, and advise customers on financial
matters. At the same time, we promote financial literacy
through information campaigns on social media and
programs designed to help our customers and select
stakeholders manage their finances better, secure their
financial future, or use credit wisely.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 33
 Being a Trusted Steward
102-16

Good corporate governance is fundamental in earning the trust of our

stakeholders and achieving long term success. From the Board and
across all levels of the organization, decisions and actions are guided
by the principles of fairness, accountability, integrity, and transparency.
We are committed to doing business the right way—in accordance
with the rules, best practices, and best interest of all stakeholders—to
enhance China Bank's corporate value and generate sustainable returns
for shareholders.

Target 12.6 Target 16.5

12 16
Sustainable Reduce of bribery
practices and corruption

Target 16.6
Effective, accountable,
and transparent
institutions

34 C H I N A B A N K I N G C O R P O R AT I O N
 CHINA BANK
AS STEWARD

New Developments in 2019

102-12, 102-17

In addition to our regular governance activities, we made • Updated the Related Party Transaction (RPT) Framework
the following key changes in 2019 to further strengthen to harmonize the Bank’s compliance with the rules of
our position as one of the best governed companies in the Bangko Sentral ng Pilipinas (BSP) and Securities and
region: Exchange Commission (SEC).

• Amended China Bank’s By-Laws, increasing the number • Enhanced the Board performance evaluation process
of directors from 11 to 12. through a third party validation by an external /
independent entity to ensure its objectivity.
• Added a fourth (and second female) independent
director, elected during the Annual Stockholders’ Organizational Structure
Meeting.
The Board of Directors is the highest governing authority
• Enhanced the Corporate Governance Manual to at China Bank. In the exercise of its authority, the Board
align with recent rules, regulations, and international sets the tone, leads the practice of ethical and responsible
practices. business conduct, guides the overall corporate philosophy
and direction, and champions a “beyond compliance”
• Enhanced the Self-Assessment Forms for the Board approach to corporate governance. The Board delegates to
and the Board Committees, and introduced a new Self- Management the day-to-day running of the Bank, including
Assessment Form for Independent Directors. the power to make decisions on operational matters within
the agreed strategy and framework.

Governance Principles

Transparency
Accountability We are truthful and
forthcoming, ensuring
We are accountable and
the accurate and timely
responsible for our actions
disclosure of and easy access
and performance and
to all material matters, such
commit to uphold the law,
as the financial situation,
Fairness behave ethically, and protect
performance, ownership,
the resources entrusted
and governance of the
We treat our shareholders in our care. Integrity corporation.
fairly and equitably –
whether minority or We adhere to a moral
majority, local or foreign. code of honesty and
We balance our professionalism in our
profit motive, ensuring thoughts, words, and
that the investment of all actions.
shareholders is protected.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 35
 Organizational Chart
102-18

BOARD OF DIRECTORS

BOARD COMMITTEES

CORPORATE RELATED PARTY EXECUTIVE TRUST RISK CORPORATE

SECRETARY TRANSACTIONS REMUNERATION NOMINATIONS AUDIT COMPLIANCE
COMMITTEE INVESTMENT OVERSIGHT GOVERNANCE
Corazon I. Morando

OFFICE OF THE
VICE CHAIRMAN
BOARD OF TRUSTEES Gilbert U. Dee TRUST & ASSET AUDIT RISK COMPLIANCE
OF CBC MANAGEMENT DIVISION MANAGEMENT DIVISION
GROUP Ronald Marcaida-OIC GROUP Aileen Paulette S.
RETIREMENT de Jesus
Mary Ann T. Lim Ananias S. Cornelio III
PRESIDENT
William C. Whang

CREDIT MANAGEMENT
COMMITTEE COMMITTEE

TECHNOLOGY ASSET & LIABILITY

STEERING COMMITTEE
COMMITTEE

INFORMATION SECURITY
SECURITY OFFICE
DEPARTMENT DEPARTMENT
Hanz Irvin S. Yoro Nestor Jason V. Camba Jr. - OIC

CHIEF OPERATING
OFFICER
Romeo D. Uyan Jr.

OPERATIONS INSTITUTIONAL &

COMMITTEE ADVISORY
Mani Thess Q. Peña-Lee

BUSINESS
DEVELOPMENT
SUPPORT
Angelyn Claire CC Liao

RETAIL BANKING LENDING FINANCIAL BUSINESS FINANCE CORPORATE

CHINA BANK SUBSIDIARIES BUSINESS MARKETS SEGMENT OPERATIONS SEGMENT SUPPORT
SAVINGS BUSINESS SEGMENT
Rosemarie C. Gan Magnolia Luisa N. Palanca SUPPORT SEGMENT Patrick D. Cheng SEGMENT
Joseph C.
Justiniano

Remittance Consumer Institutional Treasury Market Centralized Credit Legal & Human Investor & Digital Banking
CHINA BANK & Credit Card Banking Banking Sales Operations Management Collections Resources Corporate Business
CAPITAL Business Relations
Ryan Martin L. Renato K. de Lilibeth R. Carino Lilian Yu Christopher Angela D. Cruz Delia Marquez Melissa F. Corpus Belenette C. Tan Maria Rosanna Alexander C. Manuel C. Tagaza
Tapia Borja Jr. Carmelo Y. Salazar Catherina L. Testa Escucha

CHINA BANK
SECURITIES
Marisol M.
Teodoro

36 C H I N A B A N K I N G C O R P O R AT I O N
 CHINA BANK
AS STEWARD

Board of Directors • approves and oversees the implementation of

the various frameworks on corporate governance
The China Bank Board has the overall responsibility for China enterprise risk management, business continuity,
Bank’s long-term success and sustainability. To achieve this, and consumer protection
the Board, amongst others: • sets and oversees the environmental, social, and
governance initiatives
• defines the corporate culture and values
• approves the business objectives and strategies, The Board is composed of 12 highly qualified individual
and oversees its implementation directors. There is also an advisor to the Board. These
• appoints key members of senior management and directors have the required expertise and exposures
heads of control functions to diverse fields – banking & finance, accounting, risk
• approves the director and management succession management and banking laws, rules and regulations. Of
plan the 12, four are independent non-executive directors who
• oversees the development and implementation of are tasked to observe the objectivity and independent
internal control systems and sound policies judgment on all corporate activities and transactions,
ensuring arm’s length in material related party transactions,
and safeguard the interests of minority shareholders.

Lead Independent Director Independent Director Executive Director Non-Executive Director

• Has sufficient authority to • Holds no interests or • Has executive responsibility • Has no executive responsibility
lead the Board in cases where relationships with China Bank, of day-to-day operations of and does not perform any
management has clear conflict the controlling shareholders, a part or the whole of the work related to the operations
of interest. or the Management organization of the corporation.
• Serves as an intermediary that would influence his • Provides objective judgment
between the Chairman and decisions or interfere with independent of management.
the other directors when his exercise of independent • Challenges and monitors
necessary judgment, among others. management's delivery of
• Also a non-executive director • Also a non-executive director strategy within the risk and
• Convenes and chairs meeting • Provides objective judgment governance structure agreed
of the independent directors independent of management by the board
and/or non-executive directors • Oversees management • Has oversight responsibility
without the presence of the performance, including for the Bank's internal control
executive directors prevention of conflict of and effectiveness of the risk
interest and to balance management system
competing demands of the
corporation

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 37
 BOARD OF DIRECTORS
Year First No. of Years
Name Designation Directorship Age
Elected as Director
Hans T. Sy Chairman Non-executive 64 1986 34
Gilbert U. Dee Vice Chairman Executive 84 1969 51
William C. Whang Director & President Executive 61 2017 3
Peter S. Dee Director Non-executive 78 1977 43
Joaquin T. Dee Director Non-executive 84 1984 36
Herbert T. Sy Director Non-executive 63 1993 27
Harley T. Sy Director Non-executive 60 2001 19
Jose T. Sio Director Non-executive 80 2007 13
Alberto S. Yao Lead Independent Director Non-executive 73 2004 16
Margarita L. San Juan Independent Director Non-executive 66 2017 3
Philip S. L. Tsai Independent Director Non-executive 69 2018 2
Angeline Ann H. Hwang† Independent Director Non-executive 69 2019 1
Ricardo R. Chua Advisor N/A 68 N/A N/A
Turn to pages 71 to 75 for the director profiles
† Passed away on April 11, 2020
Nomination and Election
Separation of Roles 102-24
102-23
The Bank has a rigorous and transparent procedure for the
The Chairman and President work in close coordination, nomination and election of directors and adopts a well-
but their roles are kept separate with a clear delineation balanced approach to ensure diversity in the composition of
of duties to foster appropriate balance of power, promote the Board. Directors are selected from a pool of qualified
accountability, and better capacity for independent decision candidates with due consideration for their integrity,
making by the Board. The Chairman is responsible for the leadership capabilities, technical expertise, and banking
leadership and effective running of the Board, enabling experience. In 2019 the Bank engaged an independent
effective board discussions and creating a culture of search firm, the Institute of Corporate Directors, in searching
openness so that diversity of views can be expressed, for possible candidates for the Board. The Nominations
while the President leads Management in the day-to- Committee pre-screens candidates and prepares a final list
day operations. The President is likewise responsible for of nominees who have qualified under the “fit and proper”
accomplishing the objectives and executing the strategies test of the BSP and other applicable standards, for election
established by the Board. or re-election during the Annual Stockholders’ Meeting.

Nomination process

Shareholders on
record nominate The Nominations
candidates by Committee
submitting the reviews and
nomination form to evaluates the The shareholders
any member of the qualifications of The full Board elect the The Monetary
Nomination the candidates in confirms the directors during Board confirms
Committee, the line with the fit candidates’ the Annual the election
Corporate nomination Stockholders’ of the directors
and proper standards
Governance Meeting
as prescribed in the
Committee, or the
Corporate Secretary Manual of
within the Regulations for
prescribed date Banks (MORB)

38 C H I N A B A N K I N G C O R P O R AT I O N
 CHINA BANK
AS STEWARD

In case of an incumbent director, the results of the Board Remuneration

self-assessment, his attendance and participation in board
meetings are evaluated by the Nominations Committee prior Directors are entitled to a per diem of five hundred pesos
to his qualification for election. (P500.00) for attendance at each Board/Committee meeting
and to 4% of the Bank’s net earnings. Executive directors
Upon election, a director is given a copy of the general receive performance-related compensation based on their
and specific duties and responsibilities as prescribed by performance, banking experience, position, and rank in
the Manual of Regulations for Banks (MORB), which a the Bank, while non-executive directors do not receive any
director must acknowledge and certify to have read and performance-related compensation.
fully understood the same. Also, each director shall submit
a Sworn Certification that he possesses all the qualifications Performance Evaluation
required in the MORB. Additional certifications are executed 102-28
by Independent Directors to comply with the Securities
Regulation Code and BSP rules. The acknowledgement The Board, all Board-level Committees, individual Directors,
Receipt and Certifications are submitted to the BSP and/or and the President annually accomplish a self-evaluation to
SEC within the prescribed period. assess individual effectiveness, collective performance, and
identify areas for improvement. The Compliance Division
Induction and Continuing Education summarizes the results of the evaluation and reports it to
the Board. The annual evaluation is validated by an external
The Bank promotes continuing education to enhance the facilitator every three years.
knowledge and skills set of directors and enable them to
carry out their work efficiently and effectively. New directors A 5-point scale rating system is used for the self-assessment.
undergo an orientation program from an SEC accredited The lowest is 0, equivalent to “Poor”, and the highest is 5,
training provider and they also receive an orientation kit equivalent to “Excellent”.
containing the Specific Duties and Responsibilities of
Directors, Corporate Governance Manual, and applicable Rating Description
Board Committee Charters. All directors are also required to Poor – Leading practice or principle is not adopted
attend the mandatory annual governance training facilitated 0
in the company’s Manual of Corporate Governance
by a SEC-accredited institution to continually update and Needs Improvement – Leading practice or
expand their knowledge of governance best practices, 1 principle is adopted in the Manual but compliance
market developments, changing commercial risks, and has not yet been made
changes in the regulatory environment. Regular refresher Fair – Leading practice or principle is adopted in the
training and information sessions to address current 2-3 Manual and compliance has been made but with
business or emerging trends and issues are arranged, as major deviation(s) or incompleteness
appropriate by the Compliance Division. Good – Leading practice or principle is adopted in
4 the Manual and compliance has been made but
On August 7, 2019, directors, members of the Management with minor deviation(s) or incompleteness
Committee, and key officers of the Bank attended the Excellent – Leading practice or principle is adopted
Bank’s exclusive advanced Corporate Governance training 5 in the Manual and full compliance with the same
facilitated by the Institute of Corporate Directors, arranged has been made
by the Compliance Division. The said training focused on the
revised Corporation Code, Anti-Money Laundering (AML) in
the age of technology, and other AML updates.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 39
 The self-assessments focus on the following key aspects: The 2019 evaluation revealed the following:

A. For the Board as a whole: • The positive assessment of the Directors reflects
• Structure (size and composition; skills, their view that overall, the Board is seen as
expertise and competencies) effective in carrying out its function.
• Organization and functioning (conduct of • The Directors are generally satisfied with the
meetings, quality of reporting, training areas, progress the Board has made to enhance its
reporting by committees) effectiveness.
• Dynamics and internal culture (formal and • The size and level of independence within the
informal engagement) Board and Committees are deemed appropriate.
• The committee leadership is deemed effective and
B. For the Board Committees: operates on a high level of competency.
• Leadership, size and composition (including • There is strong commitment among the Directors
skills) and the President to fulfill their obligations
• Responsibilities • There is a high degree of confidence that the
• Quality of reporting and timelines Directors and the President are competent to serve
their roles to a high standard.
C. For the Individual Directors
• Upholding the guiding principles and best Independent Board Evaluation
practices stipulated in the Code of Ethics for
Directors In compliance with the SEC Code of Corporate Governance
• Practicing due diligence in carrying out duties in promoting a more objective Board and properly assessing
as director its performance, the Good Governance Advocates and
• Willingness to speak at the meetings Practitioners of the Philippines (GGAPP) was engaged to
• Receptiveness to other views conduct the independent evaluation. The Bank’s internal
• Constructively challenging fellow directors scoring criteria were adopted to ensure comparability of
and proposals and management of senior quantitative results.
management
• Applying a strategic mindset to board Based on the results, the Board is generally capable of
• Attendance at Board and Committee meetings providing the needed corporate direction as collective
strengths of its members and the strong leadership of the
D. For the President Chairman provide the essential pillars that give way to the
• Leadership seamless performance of the body’s responsibilities.
• Cooperation and collaboration with the Board
• Execution of strategies Retirement and Succession
• External relations
The Bank highly recognizes the wisdom that senior directors
contribute; hence, the Bank does not discriminate when
it comes to age. A director may remain on the Board for
as long he/she continues to be physically and mentally
fit for the position and able to discharge his/her duties in
accordance with the regulatory requirements for banks.

40 C H I N A B A N K I N G C O R P O R AT I O N
 CHINA BANK
AS STEWARD

The By-laws provides the rules on succession, replacement Corporate Governance Committee
or vacancy in the Board due to retirement or any other
reason, stating that vacancies in the Board may be filled up Responsible for ensuring that the Bank’s Corporate
by appointment or election of the remaining directors, if still Governance framework is regularly reviewed, updated,
constituting a quorum; otherwise, the stockholders shall fill and implemented accordingly at all times. The
such vacancy in a regular or special meeting called for this committee provides assistance to the Board in fulfilling its
purpose. responsibilities by ensuring compliance with, and proper
observance of governance laws, rules, principles, and best
Corporate Secretary practices, including the continuing education program for
the directors and conduct of the Board assessment,
All directors have access to the services of the Corporate among others.
Secretary, a senior, strategic-level corporate officer who
has the vital role of official record keeper responsible for Audit Committee
the administrative side of Board and committee meetings,
corporate governance gatekeeper responsible for overseeing Composed entirely of non-executive directors, is responsible
sound board practices, and Board liaison who works and for all matters pertaining to audit, including providing
deals fairly and objectively with the Board, Management, oversight for the Bank’s financial reporting, internal control
stockholders, and other stakeholders. Our Corporate system, internal and external audit processes, periodic and
Secretary, Atty. Corazon I. Morando, is responsible for annual review of internal audit mechanism, and compliance
ensuring that the Board procedures and applicable rules and with applicable laws and regulations. The committee has the
regulations are always observed. explicit authority to investigate any matter within its terms of
reference, in order to ensure the effectiveness and efficiency
of the Bank’s internal controls. Furthermore, the Audit
Board Committees Committee is responsible for the recommendation on the
102-19 appointment and removal of the external auditor.

The Board is supported by nine committees to effectively Compliance Committee

carry out its mandate of good corporate governance. Each
committee has a charter and operates within its specific Responsible for monitoring compliance with established
delegated authority and functions. The committee charters bank laws, rules and regulations specifically in creating
are posted in the governance section of our corporate a dynamic and responsive compliance risk management
website, www.chinabank.ph. system for identifying and mitigating risks that may
erode the franchise value of the Bank, and ensuring that
Executive Committee Management is doing business in accordance with
these laws.
Has the powers of the Board, when the latter is not in
session, in the management of the business and affairs
of the Bank to the fullest extent permitted under its By-
Laws and Philippine laws. The committee also decides on
credit applications or transactions that exceed the Credit
Committee’s credit authority, as well as on other matters
brought to their attention from time to time.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 41
 Risk Oversight Committee Related Party Transactions Committee

Responsible for the development and oversight of the Bank’s Responsible for reviewing all material related party
risk management functions, including the evaluation of the transactions (RPTs) to ensure that they are conducted
effectiveness of the enterprise risk management framework at fair terms and at arm's length for the best interest
and ensuring that corrective actions are in place to address of the Bank and stakeholders. Composed entirely of
concerns in a timely manner. The committee oversees the Independent Directors, the committee oversees the
risk taking activities of the Bank and warrants the continued proper implementation of the RPT Policy and ensures that
relevance, comprehensiveness and overall value of the corresponding transactions are duly identified, measured,
institutional risk management plan. monitored, controlled and reported.

Nominations Committee Trust Investment Committee

Responsible for reviewing and evaluating the qualifications of Oversees the trust, investment management, and fiduciary
all persons nominated to the Board and other appointments activities of the Bank, and ensures that they are conducted
that require Board approval, including promotions favorably in accordance with applicable rules and regulations, and
endorsed by the Promotions Review Committee. It is also judicious practices. The committee provides oversight
tasked to review the qualifications of the candidates, to functions, overall strategic business development,
ensure that their qualities and/or skills are appropriate for and financial policy directions to the Trust and Asset
leading and assisting the Bank in achieving its vision and Management Group, and ensures that prudent operating
corporate goals and strategic directions. The committee is standards and internal controls are in place, understood, and
composed entirely of Independent Directors. implemented.

Remuneration Committee

Provides oversight for the remuneration of senior

management and other key personnel to ensure that
compensation is consistent with the interest of all
stakeholders and the Bank’s culture, strategy, and control
environment. All members are independent directors.

42 C H I N A B A N K I N G C O R P O R AT I O N
 CHINA BANK
AS STEWARD

COMMITTEE MEMBERSHIP

Corporate Risk Trust

Executive Audit Compliance Nominations Remuneration RPT
Name Governance Oversight Investment
Committee Committee Committee Committee Committee Committee
Committee Committee Committee*

Hans T. Sy - Chairman Chairman - - Chairman Member - Member - -

Gilbert U. Dee - Vice

Member - - - - - - - -
Chairman

William C. Whang -
Member - - - - - - - Member
Director & President

Peter S. Dee - Director Member - - - - - - - Member

Joaquin T. Dee - Director Member - Member Member - - - - -

Herbert T. Sy - Director - - - - - - - - Chairman

Harley T. Sy - Director - - - - - - Member - -

Jose T. Sio - Director - - - - - - - - Member

Alberto S. Yao - Lead

- Member Chairman Member Member Member Member Member -
Independent Dir.

Margarita L. San Juan

- Member - - Chairman Member Member Member -
- Independent Director

Philip S. L. Tsai
- Chairman Member - - Member Chairman Chairman -
- Independent Director

Angeline Ann H. Hwang†

- Member - - - Chairman - Member -
- Independent Director

* Trust Officer Mary Ann T. Lim is also a member

† Passed away on April 11, 2020

Board Meetings The directors are committed to their duty by studying the
materials to prepare for the meetings. When exigencies
The Board conducts business through meetings of the prevent a director from physically attending a Board
Board and its committees. Regular Board meetings are or committee meeting, he/she could participate via
held at least once a month, set to be every first Wednesday, telephone or video conferencing. To ensure sound and
to review China Bank’s financial performance, approve objective decision making, board papers are provided to
strategies, policies, and business plans, as well as to the directors five days before the meeting. The directors
consider business and other proposals which require the also have access to senior management, external
Board’s approval. Special Board meetings may also be consultants and advisors, and the Corporate Secretary.
called to deliberate and assess corporate proposals or
business issues that also require Board approval. Board In 2019, the Board had 16 meetings, including the
and committee meetings are conducted consistent with the organizational meeting. The Board Committees also
Bank’s By-Laws. Majority of the Board constitutes quorum held separate committee meetings or jointly with other
and a majority of the quorum is generally what is required committees.
for Board decisions.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 43
 ATTENDANCE
Corporate Risk Trust
Board of Executive Audit Compliance Nominations Remuneration RPT
Name Governance Oversight Investment
Directors Committee Committee Committee Committee Committee Committee
Committee Committee Committee
Number of meetings 16 38 30 15 12 11 18 2 12 114
Incl. 1 joint Incl. 11 joint Incl. 11 joint Incl. 1 joint joint
meeting meetings w/ meetings w/ meeting w/ meetings w/
w/ Risk Compliance Corp.Gov Executive Corp.Gov
Oversight and 18 joint
meetings w/
Nominations
Hans T. Sy 15/16 35/38 - - 10/12 11/11 - 2/2 - -

Gilbert U. Dee 16/16 38/38 - - - - - - - -

William C. Whang 16/16 36/38 - - - - - - - 11/11

Peter S. Dee 16/16 35/38 - - - - - - - -

Joaquin T. Dee 16/16 36/38 - 15/15 12/12 - - - - -

Herbert T. Sy 14/16 - - - - - - - - 11/11

Harley T. Sy 16/16 - - - - - - 2/2 - -

Jose T. Sio 16/16 - - - - - - - - 11/11

Alberto S. Yao 15/16 - 29/30 14/15 11/12 11/11 17/18 2/2 10/12 -

Margarita L. San Juan 16/16 - 29/30 - - 11/11 18/18 2/2 12/12 -

Philip S. L. Tsai 16/16 - 29/30 15/15 - - 17/18 3

2/2 12/12 -

Angeline Ann H. Hwang† 9/91 - 15/191 - - - 9/182 - 7/71 -

1
Member from May 2, 2019
2
Chairman from May 2, 2019
3 Chairman up to May 1, 2019
4
Attendance of Trust Officer Mary Ann T. Lim: 11/11
† Passed away on April 11, 2020

Governance Related Policies

102-11, 102-17 and the individual directors, the compliance system and
internal control, and the guidelines on communication and
The Bank is committed to a higher standard to ensure the protection of the rights of various stakeholders, among
good stewardship of assets and resources. In place are others. The Manual is updated to keep it abreast with latest
internal policies that make that standard clear, serve as regulatory issuances and aligned with international best
the guidelines for our overall governance practices, and practices. It is easily accessible via the Bank’s intranet
demonstrate how seriously we take corporate governance. facility and corporate website, www.chinabank.ph.

Corporate Governance Manual The Chief Compliance Officer (CCO) performs a vital
function in monitoring compliance with the Manual. In 2019,
The Bank’s comprehensive Corporate Governance the Bank has fully complied with all the material provisions
Manual institutionalizes the principles of good corporate of the Corporate Governance Manual.
governance. It contains our governance policies and
structure, the duties and responsibilities of the Board

44 C H I N A B A N K I N G C O R P O R AT I O N
 CHINA BANK
AS STEWARD

Code of Ethics and responsibilities to China Bank. They are likewise barred
from engaging in work outside of the Bank unless with duly-
The Bank is committed to ethical and professional business approved permission, as well as perform activities or work in
conduct in performing its duties and responsibilities, and in direct competition with the Bank.
dealing with customers, investors, employees, creditors,
regulators, contractors, and other stakeholders. The Code of Related Party Transactions
Ethics for employees and for directors are anchored on the
Bank’s core values of integrity, high performance standards, Since Related Party Transactions (RPTs) may give rise to a
commitment to quality, customer service focus, concern for conflict of interest, the Bank exercises caution in dealing
people, efficiency and resourcefulness, and initiative. with related parties. All transactions with such parties
All directors, officers, and employees are required to adhere are thoroughly reviewed as having been conducted in
to the Code. All new directors and employees are given a the ordinary course of business, at arm’s length basis, at
copy of the Code, required to acknowledge receipt thereof, fair market prices, and upon terms not less favorable to
and undergo the New Employees’ Orientation Course the Bank, in the same terms as those offered to others.
wherein the Code is comprehensively discussed. For easy All material RPTs are reviewed and vetted by the RPT
reference, the Code is posted on our intranet facility and Committee before they are endorsed to the Board for
corporate website, www.chinabank.ph. approval and are ratified by the stockholders during the
Annual Stockholders’ Meeting.
Insider Trading
The RPT Framework serves as a guide to the China Bank
Directors, officers, and employees who have knowledge group in dealing with related parties. The Bank’s RPT
of material facts or changes in the affairs of the Bank policy is kept relevant and aligned with recent regulatory
which have not yet been publicly disclosed—including any issuances. To prevent conflict of interest, no director is
information likely to affect the share price of the Bank’s allowed to participate in the discussion, deliberation,
stock—are strictly prohibited from directly or indirectly and approval of a transaction where he is a related party.
engaging in financial transactions. The policy on insider Specific materiality thresholds on a per transaction basis
trading also applies to consultants and advisers and all other have been established.
employees who are made aware of undisclosed material
information. Any transactions by the Directors and principal The following summary shows the material related party
officers involving the Bank’s shares are required to be transactions and outstanding loan balances for the year
disclosed within three business days from the date of the 2019. Details have been disclosed through the submission of
transaction. required periodic report to the BSP and/or SEC.

Conflict of Interest Related Party Total Total Outstanding

Amount /1 Balance /2
Conflict of interest between the Bank and employees should China Bank Group P19.8 B P 9.0 M
be avoided at all times. However, should a conflict arise, $ 1.4 B
the interest of the Bank must prevail. Employees are not SM Group P134.5 B P 13.7 B
permitted to have or be involved in any financial interests $ 224.5 M $ 170 M
that are in conflict or appear to be in conflict with their duties Other Related Parties P37.7 B P11.5 B
$ 8.9 M
1/
Covers all transactions
2/
For loan transactions approved in 2019

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 45
 Anti-Bribery & Anti-Corruption 3. Formulation and implementation of internet-based
205-2 and classroom training programs to ensure that all
Bank personnel are well-informed of the current
The Bank does not tolerate any form of bribery and corruption. policies pertaining to AML.
China Bank is dedicated to upholding fair and professional
business dealings at all times. As established in the Code of A total of 255 employees completed the mandatory AML
Ethics, Directors, officers, and employees are prohibited from e-learning course while a total of 1,634 branch employees
offering, promising, or giving a financial or other advantage attended the AML learning sessions. For the same year,
to any person or party, including public officials, with the China Bank has fully complied with the AMLA provisions,
intention of inducing or rewarding improper performance by including AMLC reporting of suspected money laundering
them of their duties or to facilitate Bank transactions. They and terrorist financing activities.
are likewise prohibited from accepting any financial or other
advantage as a reward for participating in any act prejudicial Whistleblowing
to the Bank, and any of its stakeholders.
The Bank does not tolerate unethical conduct. Employees,
In 2019, a total of 3,574 employees or 51.58% of the Bank’s customers, shareholders, and third party service providers
workforce completed the annual anti-corruption online are encouraged to report questionable activity, bribery and
course or attended the classroom training. Directors also corruption issues, unethical behavior, incidents of fraud or
received training on anti-corruption as part of the annual any other malpractice within China Bank, without fear of
Corporate Governance Workshop. For the same year, reprisal or retaliation, as identity of the whistleblower is kept
no China Bank director or employee was dismissed or confidential.
disciplined for violating our anti-corruption policy. Similarly,
no contract with our suppliers and contractors was The substance and validity of the whistleblowing report or
terminated due to incidents of corruption. disclosure is determined by the CCO. If deemed sufficient
in form and substance, the disclosure is referred either to
Anti-Money Laundering the Audit Division or the Human Resources Group (HRG) for
further investigation. If the report is found baseless, or lacks
The Bank upholds the law, rules, and regulations to combating sufficient information, the whistle blower is informed of the
money laundering and terrorist financing. It cooperates with status within 24 hours from receipt, without prejudice to its
the regulators and law enforcement agencies within the resubmission. Meritorious disclosure, as may be evaluated,
bounds of confidentiality and privacy laws. will be given recognition and may be entitled to an award
as deemed necessary by the HRG or the Investigation
The Compliance Division manages the Bank’s compliance Committee.
with Anti-Money Laundering laws and regulations by
establishing the Money Laundering and Terrorism-financing Whistleblowing disclosures may be reported to the
Prevention Program (MTPP) containing policies to prevent Compliance, Audit, HRG or Risk. Below are details of the
the Bank from being used as channel for money laundering Chief Compliance Officer.
and terrorism financial activities. The Division sees to it that
the MTPP is updated to keep abreast on the results of the CHIEF COMPLIANCE OFFICER
institution-wide risk assessment. Other major functions of Tel. No. 8885-5731
the Division include: Mobile No. 0947-9960573
Fax No. 8864-5007
1. Conduct of testing and monitoring to ensure Email: apsdejesus@chinabank.ph
institution-wide compliance with the MTPP whistle_chib@yahoo.com.ph
2. Manage the Bank’s AML System to ensure
A Whistleblower disclosure form is also available
effective monitoring of transactions and timely
at www.chinabank.ph
reporting of covered and suspicious transactions.

46 C H I N A B A N K I N G C O R P O R AT I O N
 CHINA BANK
AS STEWARD

Creditors investors, and other stakeholders. Policies and procedures

are in place for building the talent pipeline, for ensuring
As a financial institution and an active participant in the that key positions are filled up through internal promotion
capital markets, the Bank honors all the agreements, be (Succession Management Program) or external sourcing,
it debt or equity issuances and respect the rights of our and for implementing development plans and priorities for
creditors—stockholders and bondholders. The Bank likewise officers. The Human Resources Group Head is responsible
complies with all the post-issuance regulatory requirements, for ensuring the adherence to these policies and procedures
including continuing disclosures and tax compliance. and that the appropriate level of administrative support is
provided throughout the selection and appointment process.
Suppliers and Contractors The Nominations Committee reviews the candidates’
102-9 qualifications and information, and the Board approves the
appointments.
The Bank commits to fair market practices and engages
suppliers and contractors that are reputable, comply with Executive Compensation
national laws and international standards, and have good
track records and sustainable business practices. Qualified The Bank’s remuneration policy is anchored on the principle
suppliers and contractors are given equal opportunity to of fair, transparent, and performance-based reward to
bid for projects through established processes for vendor encourage employees’ long-term commitment, to support
accreditation, selection, and audit. Vendor bids are evaluated the Bank’s long-term outlook and plans, and to address
based on thorough criteria such as quality, price, service, and the challenge of attracting and retaining the best talents.
overall value to the business, ensuring the prevention of any Remuneration for senior officers varies according rank,
favoritism or conflicts of interest. function, and performance. Regular salary reviews are
conducted to ensure market competitiveness of total
The Bank also has an outsourcing policy that is aligned remuneration.
with the outsourcing regulations of the BSP to ensure that
all outsourced activities are conducted in compliance with In 2019, the Bank paid a total of P97.7 million to the five
applicable laws, and that risks arising from outsourced most senior executives*: Vice Chairman Gilbert U. Dee,
activities are identified, monitored, and mitigated. President William C. Whang, Chief Operating Officer Romeo
D. Uyan Jr., Chief Finance Officer Patrick D. Cheng, and RBB
Senior Management Appointment and Succession Segment Head Rosemarie C. Gan.

Ensuring that we have the right people is crucial to the Bonuses & Other
Year Salary TOTAL
Bank’s success and sustainability. The Board is primarily Compensation
responsible for approving the selection of the Senior 2019 P54,416,702 P43,245,548 P97,662,250
Management Team led by the President and approving an
2018 P46,747,440 P40,084,898 P86,832,338
effective succession plan to preserve the continuity of
* Due to the competitiveness and high demand for talent in the banking
the Bank. Senior officer appointments (VPs up) are made industry, individually disclosing the remuneration of the top five officers, as per
corporate governance best practices, would be disadvantageous to the Bank.
on merit and in accordance with the “fit and proper” rule,
giving consideration on integrity, expertise and experience
in finance or banking, and aligned with the Bank’s strategic
objective of having the highest-caliber leaders who inspire
the trust and confidence of our employees, customers,

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 47
 Dividends disclosed, and a Corporate Governance microsite containing
focused disclosures on our governance policies and
Shareholders have the right to receive an equitable share practices. Prompt disclosure is observed with respect to
of profits. Cash dividends are declared at a payout ratio of major and market-sensitive information such as dividend
approximately thirty percent (30%) of the net income of the declarations, joint ventures and acquisitions, sale and
prior year, subject to the conditions and limitations set forth disposition of significant assets, as well as financial and
in more detail in the dividend policy statement contained in non-financial information that may affect or influence the
the Corporate Governance Manual. decision of our shareholders and other stakeholders, in
the form of disclosures through EDGE for posting on the
Dividend payouts, as part of our capital management policy PSE website, media releases, and news updates on our
and process, are reviewed and calibrated annually, taking corporate website. In addition, the Investor and Corporate
into account the economic and business environment, Relations Group conducts/participates in investor fora and
the Bank’s risk profile and appetite, and trends in capital briefings with analysts and members of the media.
markets and regulatory environment to achieve the following
objectives:
Internal Controls
1. Delivering to stockholders satisfactory returns and
enhanced shareholder value Internal controls are vital to safe and sound banking
operations. China Bank’s strong internal control system
2. Healthy capital adequacy ratios to comply with
helps to ensure compliance with laws and regulations
regulatory capital requirements and maintain strong
as well as internal policies and procedures, the effective
credit rating
management and mitigation of risks, the reliability and
3. Capital buffer to support business growth and accuracy of financial reports, and the achievement of
pursue business opportunities strategic objectives and long-term profitability targets.

Dividend History The Board and Senior Management lead the establishment
of a culture that emphasises and demonstrates to all levels
2015 2016 2017 2018 2019 of the organization the importance of internal controls.
Stock Dividend 8% 8% 8% -- -- The Board is responsible for the development and review
Cash Dividend 10% 10% 8% 8.3% 8.8% of the Bank’s internal control system, while the day-to-day
responsibility for internal control rests with Management.
Disclosure and Transparency In varying degrees, internal control is the responsibility of
everyone in the Bank. All personnel understand their role in
Stakeholders are provided with timely and accurate the internal controls process.
information to facilitate understanding of the Bank’s true
financial condition and quality of corporate governance. Based on the Audit Committee’s continuing review and
The Bank complies with the disclosure and reportorial monitoring of the Bank’s internal control system, in 2019,
requirements of regulators—BSP, PSE, and SEC, material controls, risk management systems and framework
and maintains an up-to-date corporate website, remain adequate and effective relative to the Bank’s size and
www.chinabank.ph, where relevant information is complexity of transactions.

48 C H I N A B A N K I N G C O R P O R AT I O N
 CHINA BANK
AS STEWARD

Compliance Risk Management

In China Bank, compliance starts at the top and is embraced Risks are part of doing business. Effective risk management
at all levels of the organization as an integral part of its rather than outright risk avoidance has been a guiding
business activities. The Board is responsible for ensuring principle at China Bank, enabling us to maintain highly
that appropriate policies are in place to manage compliance profitable and stable operations while undertaking only well-
risk and to oversee Management’s implementation of these calculated risks for commensurate returns. Risk oversight is
policies and the appropriate actions when compliance issues a primary Board responsibility, setting the tone for a sound
are identified. risk culture. Management handles the implementation
of the Enterprise Risk Management Framework and day-
Compliance System to-day risk management, ensuring the Bank operates
within the established risk appetite and limits. Effective
The Compliance Division plays a crucial role in fostering a risk management is reinforced as a discipline group-wide
culture of compliance within China Bank and across the through trainings and communication.
Group. It also assists the Board in the discharge of its
governance function to protect the Bank‘s reputation and Risk Governance System
its stakeholders‘ interests. A compliance risk management
system has been designed to identify and mitigate risks, and At China Bank, managing risks is everyone’s business. Our
ensure the Bank‘s safety and soundness. framework ensures that the Board direction on strategy and
risks are well articulated in the risk policies and that risk
The Compliance Division is led by the Chief Compliance appetites, limits, and measures are identified and monitored.
Officer (CCO), who also takes on the role of Group
Compliance Officer for the China Bank Group. She also We subscribe to a Three Lines of Defense system to
oversees the compliance function of the entire China Bank effectively manage group-wide risks. The first line of defense
Group. The CCO functionally reports to the Compliance is risk management by the business lines, wherein business
and the Corporate Governance committees of the Board, unit engages in risk-taking within the established range of
and administratively to the Bank’s President. As the Bank’s risk appetite, and promptly implements risk control at the
second line of defense, Compliance is independent from on-site level when a risk arises. The second line of defense
business operations and is made up of six (6) departments: is Compliance and Risk Management. Compliance Division
regulatory compliance, anti-money laundering, IT is in charge of the compliance risk management system to
compliance, corporate governance, subsidiaries oversight, identify and mitigate risk that may erode the franchise value
and associated person. of the Bank, while the Risk Management Group (RMG) acts
as a restraint function for the risk taking of the first line of
The mandate of fostering a strong compliance culture within defense, and supervises and provides guidance regarding
the Group is made possible through a robust compliance the risk governance system. RMG reports on the status
program covering preparation and enhancement of policies of risk management to the Board of Directors through the
and procedures, risk assessment, independent testing and Risk Oversight Committee. The third line of defense is
compliance awareness. Regular trainings are in place to The Audit Division which validates the effectiveness and
ensure employees are kept abreast of changes in the laws appropriateness of the group-wide risk governance system
and regulations. The compliance function and program are and processes from an independent standpoint.
subject to independent review by the Audit Division.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 49
 Risk Management Group The Bank also has a rating system for Philippine universal,
commercial, thrift, rural, and cooperative banks. In addition,
The Risk Management Group (RMG), headed by the Chief the Bank has a Sovereign Risk Rating Model used to assess
Risk Officer (CRO), performs overall risk management, the strength of the country rated with reference to its
identifies and evaluates group-wide risks, creates a risk economic fundamentals, fiscal policy, institutional strength,
management process, formulates recovery strategies, and and vulnerability to extreme events.
sets risk limits in accordance with the Board-approved risk
management policies. RMG applies the principles of sound Moody’s Analytics performed a quantitative and qualitative
governance to the identification, assessment, monitoring, validation of the ICRRS in 2014, followed by the model
and mitigation of risks. Risk identification and assessment recalibration in 2015. In 2016, with the assistance of Teradata
are embedded in our work processes and critical business as its technology provider, the Bank completed the statistical
systems to ensure that decision-making is based on valid validation of the BCS using the same methodology applied
data. RMG distinguishes the different types of risk and takes to the validation of its corporate risk rating model. In 2017
an integrated approach, guided by supporting frameworks and 2018, the Bank conducted the validation of the two
and policies which are regularly reviewed and enhanced, to proposed recalibrated ICRRS models and the results were
effectively manage the Bank’s financial, nonfinancial, and used as basis for the selection of the new ICRRS model that
emerging risks. was approved by the Board in 2019. The Bank also continued
to perform statistical review of the BCS, and the auto and
Credit Risk housing loans scorecards in 2019.

During the normal course of lending and credit underwriting, Market and Liquidity Risk
the Bank is exposed to credit risk which is the risk of
financial loss where a customer or counterparty fails to meet Operating in a market that is dynamic and often
their financial obligations to China Bank. The policies for unpredictable, China Bank is exposed to market risk—the
managing credit risk are determined at the business level risk of changes in market factors, such as foreign exchange,
with specific procedures for different risk environments interest rates and equity prices negatively impacting
and business goals. Risk limits and thresholds have earnings. This includes interest rate risk in the banking
been established to monitor and manage credit risk from book which is the risk to interest income from a mismatch
individual counterparties and/or group of counterparties, between the duration of assets and liabilities. The Bank
countries, and industry sectors. Periodic assessments is also exposed to Liquidity risk, which is the current and
are also conducted to review the creditworthiness of our future risk arising from a compay’s inability to meet its
counterparties. financial obligations when they come due. The objective of
our market risk policies is to obtain the best balance of risk
Credit risk for large corporates and medium-sized entities and return while meeting our stakeholders’ requirements.
is measured through the Internal Credit Risk Rating System On the other hand, our liquidity risk policies center on
(ICRRS). For smaller businesses, retail and individual loan maintaining adequate liquidity at all times to be in a position
accounts, the credit scoring system used is the Borrower to meet all obligations as they fall due. Market risk, interest
Credit Score (BCS). There is a separate application scorecard rate risk, and liquidity risk exposures are managed through a
for auto loans and housing loans, while Transunion score risk management framework comprising of limits, triggers,
is used for credit cards in conjunction with other credit monitoring, and reporting process that are in accordance
acceptance criteria. with the risk appetite of the Board.

50 C H I N A B A N K I N G C O R P O R AT I O N
 CHINA BANK
AS STEWARD

Market risk exposures are measured and monitored through Information Technology (IT) Risk
reports from our Market Risk Management System. We use
Historical Simulation Value-at-Risk (VaR) approach for all For a business that relies on technology, China Bank is
treasury traded instruments, including fixed income bonds, diligent in managing Information Technology (IT) risks—
foreign exchange swaps and forwards, interest rate swaps, the risk associated with the use, ownership, operation,
and equity securities. Meanwhile, liquidity and interest rate involvement, influence, and adoption of IT within an
risk exposures are measured and monitored through the organization. The Bank’s IT risk management practices
Maximum Cumulative Outflow (MCO) and Earnings-at-Risk are aligned with the standards and operating principles of
(EaR) reports from our Asset and Liability Management the Guidelines on IT Risk Management (BSP Circular No.
(ALM) system. Based on the latest annual validation of 808) and Enhanced Guidelines on Information Security
Internal Audit, our internal risk measurement models –VaR, Management (BSP Circular No. 982). Also in place is an
EaR, and MCO – remain appropriate and adequate. IT risk assessment process for identifying vulnerabilities
and determining the effectiveness of IT controls. With
Operational Risk the evolving cyber-threat landscape, a Cyber Resilience
Framework was developed as a supplement to our
Operational risk could arise in the normal course of business Information Security Management System and BCM
activities. Operational risk is the risk of loss resulting program. The framework provides the details related to the
from inadequate or failed processes, people, systems preparations and measures for protecting the Bank’s disaster
and external events. The Bank complies with the Basel II recovery infrastructure against cyber-attacks.
requirement of holding capital against the risk of losses
that could arise from operational risks. Our Operational Risk Trust Risk
Management Framework outlines the policies, processes,
procedures, and tools —including Risk Control Self- With the extensive development of the financial market,
Assessment, Loss Incident Reporting System and Key Risk the Bank continues to place great importance on managing
Indicators—for managing the Group-wide operational risks. all the risks specific to our Trust business, including legal,
strategic, and reputational risks. Trust risk is managed in
Business Continuity Management (BCM) accordance with the Guidelines in Strengthening Corporate
Governance and Risk Management Practices on Trust, Other
China Bank is committed to ensuring the continuity of critical Fiduciary Business, and Investment Management Activities
business operations in the event of significant business (BSP Circular 766), as well as the Bank’s internal Trust Risk
disruptions, including natural calamities, pandemics, and Management Guidelines.
disasters. Our Business Continuity Management (BCM)
program establishes the resiliency strategies, alternate Integrated Stress Test
sites, recovery procedures, communication channels and
crisis management plans primarily to mitigate the impact of RMG has an Integrated Stress Testing (IST) framework to
business-disrupting events, maintain operability and secure evaluate the Bank’s overall vulnerabilities on specific events
information. The BCM essentially provides the masterplan or crisis and gauge the ability to withstand stress events,
for contingency operations with the overall objective of in addition to the silo stress tests. The IST covers all the
providing our customers uninterrupted banking services major risk areas of the Bank and complements the Pillar
to the extent possible while looking after the safety and I Plus Approach which is the basis for the Internal Capital
welfare of our employees. The BCM program includes tests Adequacy Assessment Process (ICAAP) capital charge under
and simulation exercises which are regularly performed in normal condition.
varying degrees.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 51
 A comprehensive report is then presented to the Audit
Internal Audit Committee and submitted to the Board with the results
and recommendations, as well as the challenges that may
Internal audit is a cornerstone of good corporate governance
require Board intervention. The audit plan also includes the
at China Bank. It provides risk-based and objective
conduct of certain activities on an annual and/or periodic
assurance, advice and insight to senior management and
basis as required by law and auditing standards, such as
the Board, to enhance and protect organizational value. An
an internal quality assessment, validation of models and
effective and thorough internal auditing helps protect the
surveys, among others.
Bank’s assets, reputation, and sustainability. The Board
through the Audit Committee has oversight responsibility
Developments in 2019
for the Bank’s internal controls, including oversight of the
performance, independence, and objectivity of the auditors
To align with the digital transformation of the Bank and its
and the quality of the audit.
paperless advocacy, Audit Division in 2019, launched another
monumental project - the Audit Management System, a
Audit Division
software which simplifies the execution of audit processes,
from planning to monitoring of results. It automates existing
The internal audit function is exercised by our Audit Division,
manual tasks and operates in a paperless environment, thus,
headed by the Chief Audit Executive (CAE) who reports
improving efficiency and reducing cost. Continuous training
functionally to the Audit Committee and administratively
for internal auditors on auditing techniques, new regulations
to the President. The Audit Division provides independent,
and standards, and banking products and services ensures
objective assurance and consulting services designed to add
that the Audit Division has the ability to take a proactive,
value, improve operations, and achieve business objectives
enterprise wide, risk-based view of issues of utmost
by bringing a systematic and disciplined approach to evaluate
importance to the Board and the business. Other significant
and improve the effectiveness of risk management, control,
projects in relation to continuous professional development
and governance processes. The Internal Audit Charter,
of auditors involve the conduct of in-house training facilitated
approved by the Board thru the Audit Committee, defines
by an external service provider with subject matter expertise
the purpose, authority, and responsibility of the Audit
on audit-related topics. In this set-up, a large number of
Division. The Charter empowers and provides blueprint on
auditors were able to attend the training and acquire the
how Internal Audit will operate and perform its mandate to
necessary knowledge and techniques in the conduct of their
the organization.
work. In addition, the Sponsorship Program for Professional
Certification was approved by the Audit Committee and the
Annual Audit Plan
Board to provide financial assistance to qualified auditors
in securing international certification relevant to their
The CAE is responsible for developing a risk-based audit
profession, thus, enhancing their competency and credibility.
plan, which covers activities to assess the Bank’s overall
effectiveness of the governance, risk and control processes,
including an analysis of trends emerging from internal
audit work and their impact on the Bank’s risk profile.

52 C H I N A B A N K I N G C O R P O R AT I O N
 CHINA BANK
AS STEWARD

External Audit
The Board/Audit Committee likewise discussed, approved,
External audit plays an important role in validating China and authorized to engage the services of SGV & Co in non-
Bank’s financial position and results of operation. It lends audit work for the independent Third Party Vulnerability
credibility to financial reports and reduces information risk Assessment and Penetration Testing in 2019, independent
that these are biased, incomplete, and contain material review of PFRS 9 Expected Credit Loss Models in 2018, and
misstatements. Our external auditor, Sycip Gorres Velayo independent validation of votes in the annual stockholders‘
& Company (SGV&Co.), is responsible for providing meeting. Payment for these services are included under All
reasonable assurance that the Bank’s financial statements Other Fees.
are presented accurately and in conformity with the
Philippine Financial Reporting Standards (PFRS). SGV&Co Audit and
has been China Bank’s independent auditor for over 20 Fiscal Year Audit-Related All Other Fees
Fees
years and is again recommended for appointment at the
scheduled annual stockholders' meeting. In compliance 2019 P8,377,600 P855,520
with regulations, the signing partners are rotated every five 2018 P7,766,528 P6,312,320
years. None of the Bank's external auditors have resigned 2017 P8,192,800 P254,240
during the two most recent fiscal years (2019 and 2018) or
any interim period.

Audit Fees

Audit and Audit-Related Fees cover services rendered

for the performance of the audit or review of the Bank's
financial statements, including the combined financial
statements of Trust Group and the issuance of comfort
letters relative to the Bank’s P30 billion bond issuance in
2019 and Long Term Negotiable Certificates of Deposits
offering in 2018. The 2019 and 2018 audit fees were taken
up and approved by the Audit Committee at its regular
meetings on March 25, 2020 and February 27, 2019,
respectively.

Tax fees related to the audit of tax accounting and

compliance are already incorporated in the year-end audit
fees under Audit and Audit-Related Fees category as this is
part of the audit process conducted by the external auditors.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 53
 Stock Information
China Bank common shares are listed and traded on the Philippine Stock Exchange under the symbol “CHIB”. The Bank‘s
common shares were valued at P25.05 per share as of December 27, 2019 (last trading day), and at P20.80 per share as of
April 7, 2020 (latest practicable trading date).

The Bank has an authorized capital stock of P33 billion divided into 3.3 billion shares with a par value of P10.00 per share. As
of 29 February 2020, there are approximately 1,894 holders of 2,685,899,812 common shares.

Top 20 Holders of China Bank Common Shares

Name of Stockholder Number of Shares Percentage

1. PCD Nominee Corporation (Non-Filipino) 716,587,345 26.680%
2. PCD Nominee Corporation (Filipino) 565,577,627 21.057%
3. SM Investments Corporation 461,975,661 17.200%
4. Sysmart Corporation 415,995,323 15.488%
5. JJACCIS Development Corporation 56,949,897 2.120%
6. CBC Employees Retirement Plan 53,278,951 1.984%
7. Joaquin T. Dee &/or Family 45,705,005 1.702%
8. GDSK Development Corporation 31,458,583 1.171%
9. Syntrix Holdings, Inc. 21,552,649 0.802%
10. Suntree Holdings Corporation 20,138,332 0.750%
11. Hydee Management & Resource Corporation 14,334,603 0.534%
12. The First Resources Mgt. and Sec. Corp. 5,964,229 0.222%
13. Kuan Yan Tan‘s Charity (Phil.), Inc. 5,941,277 0.221%
14. Reliance Commodities, Inc. 5,662,648 0.211%
15. Robert Y. Dee, Jr. 5,569,499 0.207%
16. Ansaldo, Godinez & Co., Inc. 5,037,498 0.188%
17. Michael John G. Dee 3,963,468 0.148%
18. Cheng Siok Tuan 3,864,332 0.144%
19. Rosario Chua Siu Choe 3,631,816 0.135%
20. Kristin Dee Belamide 3,520,559 0.131%
TOTAL 2,446,709,302 91.095%

Equity Ownership by Nationality

Nationality Number of Stockholders Number of Shares Percentage

Filipino 1,845 1,957,851,737 72.894%
Non-Filipino (PCD) 1 720,955,761 26.842%
Chinese 48 3,289,744 0.122%
American 19 2,459,997 0.092%
Australian 1 2,114 0.000%
British 2 97,631 0.004%
Canadian 2 450,163 0.017%
Dutch 1 62,198 0.002%
Spanish 1 107 0.000%
Taiwanese 4 730,360 0.027%
TOTAL 1,924 2,685,899,812 100.0%

54 C H I N A B A N K I N G C O R P O R AT I O N
 CHINA BANK
AS STEWARD

Record and Beneficial Owners Holding 5% or More Voting Securities

102-5

Name of Beneficial
Name, Address of Record Owner & No. of
Title of Owner & Relationship Citizenship Percentage
Relationship with Issuer Shares Held
Class with Record Owner
PCD Nominee Corporation *
37th Floor Tower I, The Enterprise Center, Various
Common Non-Filipino 716,587,345 26.68%
6766 Ayala Ave. corner Paseo de Roxas, Makati City stockholders/clients
Stockholder
PCD Nominee Corporation *
37th Floor Tower I, The Enterprise Center, Various
Common Filipino 565,577,627 21.06%
6766 Ayala Ave. corner Paseo de Roxas, Makati City stockholders/clients
Stockholder
SM Investments Corporation Sy Family
10 Floor L.V. Locsin Bldg.,
th
PCD Nominee
Common Filipino 461,975,661 17.20%
6752 Ayala Avenue, Makati City Corporation
Stockholder Stockholders
Sysmart Corporation Henry Sy, Sr. and Family
10 Floor L.V. Locsin Bldg.,
th
Sycamore Pacific
Common Filipino 415,995,323 15.49%
6752 Ayala Avenue, Makati City Corporation
Stockholder Stockholders
*Based on the list provided by the Philippine Depository & Trust Corporation to the Bank’s transfer agent, Stock Transfer Service, Inc., as of February 29, 2020, The
Hong Kong and Shanghai Banking Corporation Limited (396,732,386 shares or 14.770%) holds 5% or more of the Bank’s securities. The beneficial owners, such
as the clients of PCD Nominee Corporation, have the power to decide how their shares are to be voted.

Trading in Company Shares By Bank Directors

Shareholdings
Shareholdings as of Number of Shares Number of Shares
Name as of
January 1, 2019 Disposed Acquired
December 31, 2019
Hans T. Sy 3,741,419 - 485,342 4,226,761
Gilbert U. Dee 12,832,906 - - 12,832,906
William C. Whang 17,518 - - 17,518
Peter S. Dee 301,305 - - 301,305
Joaquin T. Dee 51,686,912 - - 51,686,912
Herbert T. Sy 510,592 342,670 410,808 578,730
Harley T. Sy 261,211 - 479,342 740,553
Alberto S. Yao 548,876 - - 548,876
Jose T. Sio 3,517 - - 3,517
Margarita L. San Juan 95,238 - - 95,238
Philip S. L. Tsai 2,000 - - 2,000
Angeline Ann H. Hwang*† - - 100 100
*Elected as Independent Director on May 2, 2019
† Passed away on April 11, 2020

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 55
 Trading in Company Shares By Principal Officers

Shareholdings as of Number of Shares Number of Shares Shareholdings as of

Name
January 1, 2019 Disposed Acquired December 31, 2019
Rosemarie C. Gan 130,032 - - 130,032
Patrick D. Cheng 617,756 - - 617,756
Alexander C. Escucha 83,886 - - 83,886
Gerard T. Dee 277,864 - - 277,864
Angela D. Cruz 1,639,876 - - 1,639,876
Delia Marquez 23,560 - - 23,560
Lilibeth R. Cariño 4,167 - - 4,167
Renato K. De Borja, Jr. 669 - 19,500 20,169
Shirley G.K.T. Tan 12,863 - - 12,863
Elizabeth C. Say 3,433 - - 3,433
Benedict L. Chan 15,678 - - 15,678
Maria Rosanna Catherina L. Testa 6,340 - - 6,340
Stephen Y. Tan 2,746 - - 2,746
Marisol M. Teodoro 21,323 - 21,323
Layne Y. Arpon 10,732 - 10,732
Belenette C. Tan - - 5,008 5,008
Manuel M. Te - - 3,199 3,199
Clara C. Sy - 1,532,304 1,532,304

56 C H I N A B A N K I N G C O R P O R AT I O N
 CHINA BANK
AS STEWARD

Conglomerate Map

Mountain Manila Multi-Realty Neo Property

Management Prime Central Primebridge
Bliss Resort & Southcoast Development Incorporated (formerly Limited Holdings, Inc.
Development Dev’t Corp. Corporation Sto. Roberto Marketing
(100%) (100%) (100%)
Corp. (100%) (91%) Corp.) (100%)

NON- PORTFOLIO

Asia-Pacific Sodexo Benefits and

Intercontinental Nagtahan Henfels
Computer Rewards Bellevue
Development Property Services Philippines, Investments
Technology Properties, Inc.
Corporation Holdings, Inc. Inc. (formerly Sodexo Corporation
Center, Inc. Motivation Solutions (62%)
(100%) (100%) (99%)
(42%) Philippines, Inc.) (40%)

Goldilocks Philippines
GPAY Network Urban Living
Bakeshop, Inc. Neo Group Solutions Inc.
PH, Inc. (35%)
(34%) (63%)
SM
INVESTMENTS
INVESTMENT
CORPORATION PORTFOLIO
Atlas
Consolidated Premium CityMall
2Go Group, Inc. Belleshares Belle Commercial
Mining and Leisure
Holdings, Inc. Corporation
(30%) Development Corporation Centers, Inc.
(99%) (26%)
Corporation (26%) (34%)
(34%)
21% 5%

BDO Unibank, SM Prime

SM Retail Inc.
Inc. Holdings, Inc.
45% 77%
50%
CHINA BANKING
CORE CORPORATION
(23%)

CBC Properties Manulife-China China Bank

China Bank CBC Insurance
and Computer Bank Life Capital
Savings, Inc. Brokers, Inc.
Center, Inc. Assurance Corp. Corporation
(98.3%) (100%)
(100%) (40%) (100%)

CBC Assets
China Bank
One
Securities Corp.
(SPC), Inc.
(100%)
(100%)

Legend:
% Refers to the Effective Ownership Interest, except for the CBC group (subsidiaries and affiliates), where % refers to the direct shareholding of the parent company.

Subsidiaries of Associate of SMIC

SMIC Subsidiary Associates
SMIC Subsidiary Subsidiary

Financial Allied Subsidiaries Non- Financial Allied Subsidiary Financial Allied Affiliate Special Purpose Corporation

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 57
 Engaging our people
Our employees are the ones driving China Bank forward and enable us to
meet the ever-changing demands and expectations of our customers and other
stakeholders. We are continuously building a talented and diverse workforce
and creating a collaborative, engaging, and inclusive environment where people
can thrive, share ideas, perform at their best, and grow with the Bank.

Target 5.5 Target 8.5

Equal leadership Full and protective
opportunities for employment and
women equal pay for work of
equal value
Target 8.8
Labor rights and safe
and secure working
environments

58 C H I N A BA N K I N G C O R P O R AT I O N
 CHINA BANK
AS EMPLOYER

Our people, our strength Manpower Breakdown

By Rank and Age 2017 2018 2019
102-7, 102-8, 401-1, 405-1
Senior Management
Under 30 – – –
A diverse workforce with a broad range of skills,
30-50 years old 140 153 160
experience, and background is vital to ensuring a
Over 50 years old 167 178 191
sustainable business now and in the future. In 2019, Middle Management
the China Bank Group’s total manpower reached 9,813 Under 30 451 426 449
nationwide. All our employees are local hires working on 30-50 years old 2,082 2,388 2,465
a full-time basis at branches or offices within or close to Over 50 years old 302 319 367
their hometowns. Female employees comprise 67% of Rank & File
our workforce. The healthy balance of young and mature Under 30 4,649 4,690 4,692
employees brings generational perspective and supports 30-50 years old 1.259 1,421 1,411
Over 50 years old 74 77 78
continuous skills and knowledge transfer. Out of the total
headcount, 52% are under the age of 30 and are mostly
rank & file and middle management.

Total Manpower
Recruitment
2017 2018 2019
Organizational strength comes from having the right
China Bank 6,506 6,829 7,141
people. In 2019, we strengthened our ranks with banking
China Bank Savings 2,324 2,518 2,342
ChinaBank Insurance
professionals and fresh graduates who possess not only
85 88 103 the required qualifications, but also the right mindset
Brokers
CBC Properties and and attitude to take the China Bank Group forward. We
172 180 189
Computer Center continued to engage potential employees via digital
China Bank Capital 26 22 22 channels, social media, traditional media, and recruitment
China Bank Securities 11 15 16 drives like employee referrals, resume drop box, and
TOTAL 9,124 9,652 9,813 campus recruitment. We welcomed a total of 1,602 new
employees in 2019, equivalent to a hiring rate of 16%*.
Manpower Breakdown Of the new hires, 68% are women, 84% are under the
By Location 2017 2018 2019 age of 30, and 45% are from Luzon.
NCR 3,870 4,008 4,036
Luzon 3,854 4,140 4,239
Breakdown of Total Hires
Visayas 875 936 968
By Gender 2017 2018 2019
Mindanao 525 568 570
By Rank and Gender 2017 2018 2019 Male 715 656 519
Senior Management Female 1,419 1,287 1,083
Male 143 149 205 TOTAL 2,134 1,943 1,602
Female 164 182 146 By Age 2017 2018 2019
Middle Management Under 30 1,710 1,578 1,343
Male 1,034 1,139 1,190 30-50 years old 395 341 222
Female 1,801 1,994 2,091 Over 50 years old 29 24 37
Rank & File By Region 2017 2018 2019
Male 1,740 1,854 1,827 NCR 1,011 815 624
Female 4,242 4,334 4,354 Luzon 830 815 714
• Senior Management- refers to Company executives; employees with a “President” title
attached to their rank i.e. Assistant Vice President up to the level of President Visayas 163 194 156
• Middle Management- all employees with “Manager” attached to their rank i.e. Assistant Mindanao 130 119 108
Manager to Senior Manager level
• Rank-and-File- all entry-level employees to Supervisor/Officer level. * Hiring rate = Total new hires / total employee headcount x 100

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 59
 Career Mobility Remuneration Package
Competitive salary
We support employees’ career journeys through internal
mobility. Whenever possible, vacant positions are filled
Basic salary and bonuses
through internal transfers and promotions to help high-
potential employees to move into open roles when
feasible, and at the same time, help mitigate succession Overtime pay (for rank & file)
risk. We conduct periodic reviews of the talent pipeline
to identify current gaps and manage our future workforce
Profit sharing (for officers)
requirement, guided by our Performance Management
System and Succession Management Program. In 2019,
there were almost 1,500 internal transfers and nearly Pay raise (based on performance)
1,600 promotions.

Remuneration Fringe benefits

401-2
HMO and group insurance coverage
Our employee remuneration policy is anchored on the
principle of fair, transparent, and performance-based
Paid leaves
reward. Group wide, we provide fair and competitive
salary and benefits to employees commensurate with
their experience, responsibilities, job grade/corporate rank Allowances
and position title. For senior positions, we also benchmark
against the executive compensation for the same positions
in comparable organizations (similar size, organizational Employee loans
structure, business risk, and management complexity).
Car plan (officers)
Collective Bargaining Agreement
102-41
Retirement benefits
We recognize that labor unions provide a necessary
complement to legislated employee benefits and
protections. China Bank and CBS each have a union. Number of Employees Covered By CBA*
We entered into collective bargaining agreements 2017 2018 2019
(“CBA”) with the employees of China Bank in 2017 and China Bank 3,994 4,055 4,153
CBS in 2019. China Bank’s CBA is set to expire on July CBS 1,036 1,184 1,093
31, 2020, while CBS’ CBA is set to expire on October TOTAL 5,030 5,239 5,246
31, 2024. CBA coverage is 53% of our total headcount Total Manpower 9,124 9,652 9,813
in 2019. Our Board and Management are committed % covered over total
55% 54% 53%
headcount
to maintain a good relationship with employees. As
such, neither China Bank nor CBS have been involved
in any material disputes or major labor cases that may
adversely affect our reputation and operations.

60 C H I N A BA N K I N G C O R P O R AT I O N
 CHINA BANK
AS EMPLOYER

Performance Appraisal Health and Safety

403-2
Ensuring high performance standards starts with clearly
setting and disseminating the business objectives, the key We are committed to keep our employees healthy and
result areas, and the expectations for each employee in safe. The various health and safety policies, standards,
the organization. Continuous employment, promotions, and practices in place—which are reviewed periodically
and merit increases are determined by annual performance and aligned with industry best practices and occupational
appraisals to motivate our employees group-wide to meet safety and health standards and regulations—attest to
or exceed expectations, or to improve to be up to par. In how we take our employees’ well-being seriously. In
2019, 9,282 permanent China Bank Group employees were addition, we have emergency procedures and evacuation
appraised, 95% of the total number of employees eligible plans in case of disasters and calamities; health and
for appraisal. wellness programs aimed at preventing accidents,
managing stress, and minimizing cases of work-related
Training ill health. In 2019, we recorded over 20 million in safe man-
hours. There were no work-related fatalities reported.
404-1

We are committed to develop and up-skill our employees

to their full potential. In place are role-specific and general
Employee Relations
training and development programs to continuously
We endeavor to achieve and maintain good employee
enhance our people’s hard and soft skills. We also offer
relations and harmonious working conditions. In line with
various flagship training programs for new hires, rank &
this, the Bank is committed to promptly address and
file staff transitioning to supervisory roles, junior officers,
resolve employee grievances. China Bank’s grievance
senior officers, branch heads, and technical personnel. In-
process provides the mechanism for handling employee
house training programs at the China Bank Academy are
complaints and arbitration regarding work conditions,
complemented by online courses via our e-learning platform
interpretation of policies and procedures, disciplinary
and external trainings. In 2019, the total amount spent on
actions, or any other personnel matter related to their
employee training and development reached P54 million.
employment.
Average training hours decreased 10% to 59 hours.

Training Hours and Employees Trained Engagement and Retention

2017 2018 2019 401-1, 404-2
Total No. of Training Hours
221,487 636,111 761,644
Recorded Across the China Bank Group, all our human resources
No. of Employees Trained 9,124 9,652 12,852 policies, strategies, and programs are aimed at attracting,
AVE. TRAINING HOURS 24 66 59 motivating, developing, and retaining the best people. We
Breakdown of Training Hours and Employees Trained in 2019 endeavor to keep our valued employees and keep them
engaged by making working in our organization a financially
By Gender Male Female Total rewarding, intellectually challenging, and emotionally
Total No. of Training Hours satisfying experience. We equip our line supervisors and
231,576 530,088 761,664
Recorded managers with stronger people management skills to build
No. of Employees Trained 4,179 8,673 12,852 healthy and collaborative employee-manager relationships.
AVE. TRAINING HOURS 55 61 59 We promote excellence and raise employee morale
By Employee Category/ Rank- Middle Senior through our various rewards and recognition programs to
Rank and-File Mgt. Mgt. Total make our people proud and happy to be working with us.
Total No. of Training Hours We encourage open communication and proactively listen
489,376 257,192 15,096 761,664
Recorded to understand what matters to employees. We support
No. of Employees Trained 8,572 3,849 431 12,852 work-life integration to help our employees lead happy and
AVE. TRAINING HOURS 57 67 35 59 productive lives at work and at home.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 61
 In 2019, average employee tenure improved to 6 years.
Total separations was flat at 1,419, of which 1,352 were
Work-life Integration programs
voluntary separations. The Bank registered an attrition We recognize that there are many aspects to our
rate of 15%. employees’ life: work, home/family, personal well-being,
and community. We facilitate the melding of professional
Engagement programs development and personal growth through our Work-life
Integration Programs (WLIP). Conducted year-round, our
SharePoint Café WLIPs are aimed at helping China Bankers manage their
Officers, regardless of their rank and tenure in finances, manage stress, learn a new skill, and adopt an
the Bank, are randomly selected to contribute active and healthy lifestyle to enhance their personal life.
their thoughts on overall employee experience.
Using the World Café method, the participants
Basic Painting
are encouraged to speak with their mind and
A creative workshop at the Sip & Gogh studio. Following
heart and to play, draw, and doodle to express
a step-by-step guide, participants got to recreate a
their level of satisfaction or dissatisfaction with
famous painting to bring home and display in their homes.
China Bank.
Watercolor Painting
Voice Avenue
Another creative workshop, this time at the China
The program is for assessing current
Bank Academy in partnership with Art Nebula PH. The
employees’ disposition and perception about
participants learned the basic techniques in creating
their job and the Bank. It is an avenue for rank
beautiful artworks using watercolor paint.
and file employees to voice their thoughts and
opinions on what would keep them engaged
Meat Processing
and make them stay.
This workshop provided the participants with knowledge
in meat processing. They learned how to make longganisa
Third Phase Questionnaire
and other processed meats for their families to enjoy or
This is part of the on-boarding program to
as a source of extra income.
familiarize new employees and help them adjust
to their new working environment. A follow-up
Baking Workshop
mechanism given on the third month from hiring
The most sought-after workshop every year, the Basic
date, the Third Phase Questionnaire provides
Baking Workshop, in partnership with The Maya Kitchen,
valuable insights on how well new employees
is a hands-on program that provided participants with
have adjusted with regard to their work,
knowledge and skills in baking for the holidays.
training, relationships with peers and superiors,
etc., and to know their level of satisfaction or
dissatisfaction with the Bank’s on-boarding
program.

Exit Interview
All employees who resign are interviewed to
get feedback on their overall experience and to
gauge the likelihood of them recommending
China Bank to their friends and acquaintances
as a good place to work.

62 C H I N A BA N K I N G C O R P O R AT I O N
 CHINA BANK
AS EMPLOYER

Ube-Making Workshop Basic Yoga

A dessert made of ube or purple yam is a Filipino favorite. A Yoga class for beginners at the Rebel Yoga studio that
In this workshop, participants learned how to make two helped melt away stress and improve flexibility.
varieties of Ube Halaya Jam.
Basic Flower Arrangement
Food Cart Business / Franchising Making beautiful flower arrangements for any occasion
Food carts could be a good source of additional income. is a skill worth learning and could come in handy. The
The workshop provided an overview of the food cart participants got to learn how to make topiary and
business in the Philippines, key information on the centrepiece arrangements for their own personal use or
requirements and pricing, and tips in managing the as a side business.
business.
Air plant Aerium
Basic Self-Defense This program equipped the participants with knowledge
Knowing some simple but effective self-defense moves on air plant selection, aerium construction and design,
using ordinary items could be a lifesaver. Participants and proper maintenance of air plants for personal or
were taught the importance of being aware of their business purposes.
surroundings and how to defend themselves from would
be attackers.

Urban Gardening
This workshop taught the participants of the concept,
Mindfulness & Meditation uses, and benefits of Urban Gardening. In the concrete
This program, in partnership with Rebel Yoga, provided jungle of the metro, the answer to adding some green in
the participants a relaxing break from the hustle and our environment is potted plants.
bustle of daily life, using basic meditative techniques to
clear the mind and recharge the body.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 63
 Partnering with and for our
communities
China Bank is a responsible corporate citizen that stands for values and
strives to create value. We conduct our business responsibly and efficiently,
working with our employees and partner organizations to generate a positive
economic, environmental, and social impact. We recognize our systemic
importance as a financial institution to sustainable development; thus,
we consider it our obligation to leverage our resources to help shape a
sustainable future for all.

Target 1.4 Target 4.6

Equal rights Literacy and
to economic numeracy
resources

Target 13A
Climate change
mitigation

64 C H I N A BA N K I N G C O R P O R AT I O N
 CHINA BANK
AS PARTNER

Economic Value Created and Distributed

201-1

Creating shared value is an essential part of our business strategy. We aim to enhance business
competitiveness while simultaneously advancing economic, environmental, and social outcomes.
In 2019, we generated P35 billion in direct economic value, distributing 78% or P27 billion for the
benefit of the people and the communities where we operate, and retaining only 22% or P8 billion to
fund the Bank’s continued operations and growth.

Direct Economic Value Generated

P34.7 billion

Economic Value Distributed

P27.0 billion

P8.9 billion Operating costs

P6.6 billion Employee wages and benefits

P5.2 billion Payments to providers of capital

P6.3 billion Payments to government

Economic Value Retained

P7.7 billion

GRI Economic Table (In Million Pesos) 2017 2018 2019

Direct economic value generated (Interest income +
other income) 25,364.9 29,108.7 34,714.0
Direct economic value distributed 21,819.5 23,221.9 27,002.6
Other operating costs 7,835.6 9,242.5 8,967.3
Total wages and benefits (Compensation less training
costs) 5,695.6 6,133.8 6,601.9
Total payments to providers of capital (Interest expense
+ Dividends) 4,368.5 2,894.6 5,165.7
Payment to government (taxes and licences + provision
for income tax - deferred income tax) 3,919.4 4,950.9 6,267.5
Community investments 0.4 0.1 0.2
Economic value retained 3,545.5 5,886.8 7,711.4

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 65
 Environmental Impact Scope 2 GHG emissions
102-11
Energy Intensity
Climate change is an important environmental issue that kWh/sqm/year
has an impact on communities, businesses, and
economies all over the world. As such, we are committed
2019 123
to protecting the environment by responsibly
managing our environmental footprint. As a financial
institution, China Bank generates relatively low 2018 123
greenhouse gas (GHG) emissions. In the last two
decades, we have been implementing policies, projects,
and practices to progressively lessen our operation’s direct Electricity Consumption
impact on the environment. These include switching to kWh
energy-efficient technology for lighting, air conditioning,
and computer systems; putting in place energy and
2019 19,359,750
water conservation measures and monitoring the use
of these resources; and embracing modern technology
to communicate and collaborate without the need for 2018 19,365,871
travel. We also adopted e-statements and enhanced China
Bank’s electronic banking channels to enjoin customers in
our drive to go green, and launched various programs to CO2 Emissions
encourage employees to reduce, reuse and recycle. metric tons

Energy consumption
2019 13,688
302-1, 302-2, 302-3, 305-2, 305-3

China Bank’s electricity usage is well within the energy 2018 13,693
efficiency index based on occupied air-conditioned areas
set by the ASEAN Energy Awards. Currently, the standard
is 200 kWh/sqm/year, for offices. The Bank recorded
123.2 kWh/sqm/year in 2019. The Bank’s total electricity Scope 1 GHG Emissions**
consumption reached 19,359,750 kWh in 2019, no increase Fuel Used
from 2018, equivalent to 13,688 metric tons of CO2 liters
emissions.
180,732
Diesel
In the previous years, we reported on the fuel consumption
of outsourced vehicles. For this report, we focused on 40,765
Bank-owned vehicles which used a total of 221,497 liters. Gasoline
This is equivalent to 520 metric tons of CO2 emissions.
CO2 Emissions
metric tons

424
Diesel

96
Gasoline

*Based on data gathered from 377 branches including the head office,
comprising 80% of the China Bank branch network, with an aggregate floor
area of 157,176.95 square meters.
**Based on 2019 data gathered from 98 bank-owned vehicles, which includes
service cars, delivery vans, and armoured trucks.

66 C H I N A BA N K I N G C O R P O R AT I O N
 CHINA BANK
AS PARTNER

Water Consumption In October 2018, we raised US$150 million from China

303-5 Bank’s maiden green bond offer, with World Bank
Group-member IFC as its sole investor. Green bonds
The Bank’s water usage is also within the water efficiency are fixed income securities wherein the proceeds are
index (WEI) for offices set at 1.1 m3/sqm/year. In 2019, used to finance new or existing eligible green projects.
the Bank recorded a WEI of 1.09 m3/sqm/year. Water China Bank’s Green Bond supports the continuing
consumption increased 3% to 156,636 cubic meters. development of the nascent green bond market in the
Philippines and the government’s target of reducing
carbon emissions by 70% by 2030.
Water Intensity*
m3/sqm/year Environmental and Social Management System
The assessment of environmental and related social
risks and liabilities is critical to identifying eligible
2019 1.09 loans for the green bond. We are guided by our own
Environmental and Social Management System (ESMS)
2018 1.05 and the IFC Performance Standards in evaluating which
projects to support. Reflective of our commitment to
a balanced, responsible approach to lending, the ESMS
Water Consumption* ensures we apply a suitable level of environmental
m3 and related social due diligence depending on the
level of identified risk. The due diligence process
involves performing our analysis using a range of tools,
2019 156,636 including site visit checklists, client questionnaires, and
environmental assessments by third-party environmental
2018 150,236 specialists. Based on the outcome, clients may be
required to manage or mitigate their environmental and
social issues before we proceed with financing. The
*Based on data gathered from 328 branches including the head office,
ESMS is reviewed and updated periodically to align with
comprising 69% of the China Bank branch network, with an aggregate floor international best practices and to address regulatory
area of 143,282.35 square meters. changes and emerging issues.

In 2019, proceeds of the US$150 million green bond

Green Finance were allocated to wind farm and green building projects.
As a lender, China Bank plays an important role in
ensuring society’s energy needs are met while helping
to limit the threat posed by climate change. China
Bank has been supportive of environmentally sound
initiatives, actively financing projects that facilitate
economic growth and provide environmental benefits.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 67
 Corporate Social Brigada Eskwela
China Bank and CBS are avid supporters of Brigada
Responsibility Eskwela, the annual campaign of the Department of
413-1 Education (DepEd) to mobilize parents, students, faculty,
and the private sector to help clean, refurbish, and
Running a responsible business means being a rehabilitate pubic elementary and high school campuses
socially responsible corporate citizen. We support our and facilities before the start of each school year. In 2019,
communities by hiring and buying locally, making ethically China Bank donated cleaning materials and distributed
and environmentally sustainable business decisions, school supplies, bags, lunch kits, and meal packs to 100
embracing diversity and inclusion, and encouraging a pre-schoolers of Lagro Elementary School in Quezon City.
strong spirit of volunteerism and charitable giving among Meanwhile, CBS mobilized 250 employees to provide
our employees. In 2019, the focus of China Bank and volunteer labor, deliver construction materials and cleaning
China Bank Savings’ (CBS) Corporate Social Responsibility supplies, and distribute snacks and refreshments in 80
efforts continued to be education and social development. campuses across 24 towns and cities, from Tuguegarao to
Davao City.
2019 Southeast Asian Games
In support of national athletes and the development of
sports in the Philippines, China Bank sponsored the 2019
Southeast Asian Games (SEA Games) as the official
bank partner. Aside from the sponsorship amount for
the successful staging of the SEA Games, China Bank
deployed nine ATM units in the various sports venues and
a Foreign Exchange service kiosk at the Athletes’ Village
in New Clark City for the convenience of the thousands
of athletes, sports officials, spectators, and volunteers.
The 2019 SEA Games was held from November 30 to
December 11. The Philippines emerged as the overall
champion, amassing an all-time high of 149 gold medals.
CBS Financial Wellness Road Show
In response to the call by the Bangko Sentral ng Pilipinas
(BSP) for private sector stakeholders to promote financial
inclusion, raise financial literacy, and increase the number
of Filipinos in the formal banking system, CBS launched its
Financial Wellness Road Show in March 2019. CBS hosted
seminar-workshops in 19 cities, including 10 locations in
Visayas and Mindanao, benefitting close to 1,000 public
school administrators, faculty and non-teaching staff. The
seminar-workshops covered important topics such as
financial goal-setting, cash flow analysis, expense and debt
management, and retirement planning.

68 C H I N A BA N K I N G C O R P O R AT I O N
 CHINA BANK
AS PARTNER

CBS Financial Wellness for Young Filipino Christmas joy for the less fortunate
CBS believes that the habit of saving should be cultivated Spreading good cheer on Christmas has always been a
at an early age. In 2018, CBS launched its Financial China Bank and CBS tradition. For China Bank’s Christmas
Wellness for Young Filipino (WYFi) in support of the Outreach Program in 2019, employees visited the White
BSP’s Banking on Your Future (BOYF) advocacy. In 2019, Cross Orphanage in San Juan City to host a Christmas
WYFi visited 30 elementary schools, high schools and Party and distribute gifts and toys for the orphans.
universities in nationwide to spread basic financial literacy Meanwhile, CBS employees went to Mama’s Hope Haven
and savings consciousness, as well as to promote bank of Norway, a charitable institution which shelters and cares
usage among elementary school pupils and teenagers. for orphans, street children, distressed girls and women,
and abandoned elderly in Gen. Trias City, Cavite. They
distributed Christmas packages containing food and drinks,
toiletries, educational toys, clothes, and bedding and
laundry supplies for the residents of the haven. In a joint
effort to bring Christmas joy to the elderly, China Bank and
CBS employees visited Kkottongnae Philippines, Inc. (KPI)
in Parañaque City, a charitable institution and residential
facility for poor elderly established by Korean nationals
working in the Philippines. The volunteers distributed gifts
and shared a day of fun games and good food with the
senior citizens under KPI’s care.

World Teachers Day

CBS is grateful to teachers for their tireless work in
molding young minds to be upright citizens. As a big thank
you to teachers, CBS was the major partner of DepEd in
hosting the World Teachers Day celebration in Cagayan de
Oro City on October 5, 2019 attended by 5,000 elementary
and high school principals and teachers from all over the
country. CBS donated a Toyota WIGO, three Honda motor
scooters, and several laptops for the raffle draws as well as
bags of corporate items for the participants.

Bazaar for a good cause

China Bank’s outreach activities are mostly funded by the
Personal Social Responsibility Program (PRSP) established
by the Human Resources Group (HRG) to provide
volunteering opportunities for employees to contribute to the
betterment of society. In 2019, HRG organized “Bazket”, a
2-day bazaar for a good cause, to help raise funds for PRSP.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 69
 Board of Directors

From left: Gilbert U. Dee, Hans T. Sy, and William C. Whang

70 C H I N A BA N K I N G C O R P O R AT I O N
HANS T. SY WILLIAM C. WHANG
Chairman President

Hans T. Sy, 64, Filipino, is the Chairman of the Board William C. Whang, 61, Filipino, is Director and President
since May 5, 2011. He became a member of the China of the Bank since November 1, 2017. Aside from China
Bank Board on May 21,1986, and was elected Vice Bank, he does not hold any directorship position in any
Chairman in 1989. Chairman Sy also serves as Director other PSE-listed company. He also sits on the boards
and Chairman of the Executive Committee of SM Prime of Bank subsidiaries China Bank Savings, Inc. (CBS),
Holdings, Inc. (SMPH) and Adviser to the Board of SM China Bank Insurance Brokers, Inc. (CBC-IBI), CBC-PCCI,
Investments Corporation (SMIC); SMPH and SMIC are China Bank Capital Corporation (CBCC), and China Bank
both listed on the Philippine Stock Exchange (PSE). He Securities Corporation (CBSC), and is actively involved
is also the Chairman of the Board of Trustees of National in the boards of BancNet, Inc., Bankers Association of
University. He holds other key positions in several the Philippines, Philippine Payments Management Inc.,
companies within the SM Group. He graduated from De and Manulife China Bank Life Assurance Corporation
la Salle University with a Bachelor of Science degree in (MCBLife). He has almost 40 years of banking experience,
Mechanical Engineering. He attends and participates in previously holding key positions in local and international
various trainings and seminars, the latest of which is on financial institutions, including Metrobank, Republic
Anti-Money Laundering (AML) and corporate governance National Bank of New York, International Exchange Bank,
conducted by the Institute of Corporate Directors (ICD) in Security Bank, and Sterling Bank of Asia. Director and
August 2019. President Whang earned his Bachelor of Science degree
in Commerce, Major in Business Management, from the
De La Salle University. He underwent various trainings
in banking and other related fields such as corporate
governance, AML, branch based marketing, quality
GILBERT U. DEE service management, sales management, principle
Vice Chairman centered leadership, and corporate strategy.

Gilbert U. Dee, 84, Filipino, is the Vice Chairman of the

Board since May 5, 2011. He has been a member of
the China Bank Board since March 6, 1969, serving as
Board Chairman from 1989 to 2011. He currently sits on
the boards of other companies not listed in the PSE,
namely, as Chairman of Union Motor Corporation and
China Bank subsidiary CBC Properties and Computer
Center, Inc. (CBC-PCCI). In the past, he was a director
in Philippine Pacific Capital Corporation, Philex Mining
Corporation, CBC Finance Corporation, and Super
Industrial Corporation. Vice Chairman Dee holds a
Bachelor of Science degree in Banking from the De La
Salle University and a Master’s in Business Administration
(MBA) degree in Finance from the University of Southern
California. Among the numerous trainings in banking
he has attended over the years are ICD’s Advanced
Corporate Governance Training and AML Modules in 2019.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 71
 Board of Directors

From left: Herbert T. Sy, Jose T. Sio, Joaquin T. Dee, Peter S. Dee, and Harley T. Sy

72 C H I N A BA N K I N G C O R P O R AT I O N
PETER S. DEE JOAQUIN T. DEE
Director Director

Peter S. Dee, 78, Filipino, has been on the China Bank Joaquin T. Dee, 84, Filipino, is a member of the China
Board since April 14, 1977, serving as President and Chief Bank Board since May 10, 1984. He does not hold
Executive Officer from 1985 to 2014. He is an independent directorship position in any PSE-listed company
director in PSE-listed companies City & Land Developers, other than China Bank. He is presently the Director/
Inc. and Cityland Development Corporation. He is also Chairman of JJACCIS Development Corporation,
a member of the boards of other non-listed companies Director/President of Enterprise Realty Corporation,
including China Bank subsidiary CBC-PCCI, Hydee and Director/Treasurer of Suntree Holdings
Management & Resources Corporation, Commonwealth Corporation. He was Vice President for Sales and
Foods, Inc., and GDSK Development Corporation. He was Administration of Wellington Flour Mills from 1964 to
previously a director of Sinclair (Phils.) Inc., Can Lacquer, 1994. Director Dee is a graduate of the Letran College
Inc., CBC Forex Corporation, and CBC-IBI. Director with a Bachelor of Science degree in Commerce.
Dee obtained a Bachelor of Science degree, Major in He attended trainings and seminars related to
Commerce, from the De La Salle University/University of banking, the most recent of which are the Corporate
the East, and attended a Special Banking Course at the Governance and AML Trainings conducted by the ICD
American Institute of Banking. He attended extensive in August 2019.
trainings in AML in December 2017 and August 2019, and
corporate governance in November 2018 and August 2019,
among others. HERBERT T. SY
Director

JOSE T. SIO Herbert T. Sy (non-executive director), 63, Filipino, is

Director the Chairman of the Trust Investment Committee. He
was first elected on January 7, 1993 and has been on
Jose T. Sio, 80, Filipino, was first elected to the China Bank the China Bank Board for 26 years. He is currently
Board on November 7, 2007. He is presently on the boards Chairman of Supervalue, Inc., Super Shopping Market,
of the following PSE-listed companies: (1) SM Investments Inc., Sondrik, Inc., and Sanford Marketing Corp., and
Corporation, as Chairman of the Board; (2) Atlas Consolidated director of SM Prime Holdings, Inc.* and National
Mining and Development Corporation, as Director; (3) Belle University. He has been involved in companies
Corporation, as Director; and (4) Far Eastern University, engaged in food retailing, investment, real estate
Incorporated, as Independent Director. He also serves in other development and mall operations. He graduated from
capacities in the following PSE-listed companies: SM Prime De La Salle University with a Bachelor’s degree in
Holdings, Inc., as Adviser of Audit Committee/Risk Oversight Management.
Committee; BDO Unibank, Inc., as Adviser to the Board; and *Listed on the Philippine Stock Exchange
Premium Leisure Corporation, as Adviser to the Board. In
addition, Mr. Sio is on the boards of non-listed companies,
including NLEX Corporation, First Asia Realty Development HARLEY T. SY
Corporation, and Ortigas Land Corporation. He is the Chairman Director
and President of SM Foundation, Inc. He previously worked
as Senior Partner of SyCip Gorres Velayo & Co. (SGV). He was Harley T. Sy, 60, Filipino, has been a member of
voted as CFO of the Year in 2009 by the Financial Executives the China Bank Board since May 24, 2001. He also
of the Philippines (FINEX); and in various years, he was serves as the Executive Director of SM Investments
awarded as Best CFO (Philippines) by Hong Kong-based Corporation, one of the largest publicly listed
business publications such as Alpha Southeast Asia, Corporate companies in the Philippines, and holds various
Governance Asia, Finance Asia and The Asset. Director Sio is positions in other non-listed companies in the SM
a Certified Public Accountant, graduating with a Bachelor of Group. Director Sy graduated with a Bachelor of
Science degree in Commerce, Major in Accounting, from the Science degree in Commerce, Major in Finance,
University of San Agustin. He obtained his Master’s degree from the De La Salle University. He participated in
in Business Administration from the New York University, extensive trainings on enhancing his banking skills,
U.S.A. He is actively engaged in continuous trainings, having including programs on enterprise risk management,
attended seminars/trainings on investments, loans and financial AML, corporate governance and data privacy.
instruments, debt and equity financing during the Euromoney
Conference in China in 2005, AML and Advanced Corporate
Governance in 2019.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 73
 Board of Directors

From left: Angeline Ann H. Hwang†, Alberto S. Yao, Philip S.L. Tsai, Margarita L. San Juan, and Ricardo R. Chua

74 C H I N A BA N K I N G C O R P O R AT I O N
ALBERTO S. YAO Can Corp., Plastic Container Packaging, and in the Bank’s
Retail Banking Business until his retirement in 2015. Director
Lead Independent Director
Tsai obtained his Bachelor of Science degree in Business
Administration from the University of the Philippines, and
Alberto S. Yao, 73, Filipino, is the Lead Independent Director
pursued his Master’s degree in Business Administration
of the Bank. He was elected to the China Bank Board on
from the Roosevelt University in Chicago, Illinois. He has had
July 7, 2004. He does not serve in any listed PSE-listed
several trainings on corporate governance, bank protection,
company other than China Bank. He is the President &
AML, and branch-based marketing, among others.
CEO of Richwell Philippines, Inc. and Internationale Globale
Marques, Inc.; President of Richphil House Incorporated;
and a Member of` the Philippine Constitution Association.
He is also an Independent Director in the following Bank ANGELINE ANN H. HWANG†
subsidiaries: CBS, CBCC, and CBSC. He was previously a Independent Director
Director of Planters Development Bank, President and CEO
of Richwell Trading Corporation and Europlay Distributor Co., Angeline Ann H. Hwang†, 69, Filipino, was elected as
Inc., President of Megarich Property Ventures Corporation, independent director of the Bank in 2019. She does not
and Vice President for Merchandising of Zenco Sales, hold directorship position in any other PSE-listed company.
Inc. He holds a Bachelor of Science degree in Business She is currently the President of Wingsan Properties
Administration, Minor in Accounting, from the Mapua Corporation and Oxleyrise Properties Inc., which are both
Institute of Technology. Director Yao’s seminars include ICD’s private family-owned corporations. She is also independent
Corporate Governance and AML Training Programs in 2019. director of Bank subsidiaries CBSI and CBSC. She has more
than 45 years of experience in Philippine banking, ranging
from international trade finance to account management/
relationship management for SME and middle market
MARGARITA L. SAN JUAN segments as well as branch banking, branch administration
Independent Director and branch expansion. In the past, she held various positions
in Philippine Business Bank, Solidbank Corporation, Far
Margarita L. San Juan, 66, Filipino, is an Independent East Bank & Trust Company and Bank of the Philippine
Director of the Bank. She was first elected to the China Islands. Director Hwang earned her Bachelor of Science
Bank Board on May 4, 2017. She is likewise an Independent degree in Business Administration, Major in Banking and
Director in Bank subsidiaries CBS, CBCC, and CBC-IBI. She Finance, from the University of the Philippines. She has
does not hold directorship position in any other PSE-listed had various trainings on International Financing Reporting
company. In the past, she worked with Ayala Investment and Standards (IFRS), financing, related party transactions, data
Development Corporation, Commercial Bank and Trust Co., privacy, SME, credit risk management, AML and corporate
and in the Bank’s Account Management Group as Senior governance.
Vice President and Group Head until her retirement in 2012.
Director San Juan earned her Bachelor of Science degree in + Passed away on April 11, 2020
Business Administration, Major in Financial Management,
from the University of the Philippines, and completed the
Advance Bank Management Program of the Asian Institute
of Management (AIM). She participated in various trainings RICARDO R. CHUA
including development financing, international banking Advisor to the Board
operations, marketing, financial analysis and control, credit
and risk management, and the latest on AML and corporate Ricardo R. Chua, 68, Filipino, is Advisor to the Board since
governance in 2019. November 1, 2017. He previously held several key positions
in the Bank: as Director from 2008 up to October 2017,
President and Chief Executive Officer from September 2014
up to October 2017, and Chief Operating Officer from 2012
PHILIP S.L. TSAI to 2014. He is the Advisor of the Bank’s Technology Steering
Independent Director Committee, and sits on the boards of the following Bank
subsidiaries: Chairman of CBSI and CBCC and Director
Philip S.L. Tsai, 69, Filipino, was first elected as Independent of CBC-PCCI. A Certified Public Accountant, Mr. Chua
Director on November 7, 2018. Aside from the Bank, he does graduated with a Bachelor of Science degree in Business
not hold any position in other PSE-listed companies. He also Administration, Major in Accounting, cum laude, from
serves as Independent Director in the Bank subsidiaries the University of the East, and completed his Master’s in
CBS, CBCC, CBC-IBI. He has had more than 35 years of Business Management (MBM) from the AIM. He has had
banking experience, previously holding key positions in First trainings in banking operations and corporate directorship,
CBC Capital (Asia) Limited, Midwest Medical Management, and attended AML and corporate governance seminars,
Fortune Paper Inc., Chemical Bank New York, Consolidated among others.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 75
 Management Committee

William C. Whang Romeo D. Uyan Jr. Patrick D. Cheng Rosemarie C. Gan

President Executive Vice President Executive Vice President Executive Vice President
and Chief Operating Officer and Chief Finance Officer and Head of Retail Banking
Business Segment

76 C H I N A BA N K I N G C O R P O R AT I O N
 Lilian Yu Magnolia Luisa N. Palanca Manuel C. Tagaza Delia Marquez Ananias S. Cornelio III*
Senior Vice President Senior Vice President Senior Vice President First Vice President II First Vice President II
and Head of Institutional and Head of Financial and Head of Digital and Head of Centralized and Chief Risk Officer
Banking Group Markets Segment Banking Group Operations Group

*Ex officio member

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 77
 China Bank Management Team
As of April 30, 2020

VICE CHAIRMAN PRESIDENT

Gilbert U. Dee William C. Whang

EXECUTIVE VICE PRESIDENTS SENIOR VICE PRESIDENTS

Patrick D. Cheng Alexander C. Escucha Manuel C. Tagaza
Rosemarie C. Gan Magnolia Luisa N. Palanca Lilian Yu
Romeo D. Uyan Jr.

FIRST VICE PRESIDENTS

Cristina P. Arceo Gerard Majella T. Dee Clara C. Sy
Layne Y. Arpon Antonio Jose S. Dominguez Belenette C. Tan
Lilibeth R. Cariño Maria Luz B. Favis Shirley G. K. T. Tan
Amelia Caridad C. Castelo Madelyn V. Fontanilla Stephen Y. Tan
Benedict L. Chan Jerry Ron T. Hao Manuel M. Te
Ananias S. Cornelio, III Delia Marquez Marisol M. Teodoro
Melissa F. Corpus Jose L. Osmeña, Jr. Maria Rosanna Catherina L. Testa
Angela D. Cruz Christopher Ma. Carmelo Y. Salazar Geoffrey D. Uy
Renato K. De Borja, Jr. Elizabeth C. Say Noemi L. Uy

VICE PRESIDENTS
Luis M. Afable, Jr. Luellia S. Espine Jocelyn T. Pavon
Baldwin A. Aguilar Pablito P. Flores Mani Thess Q. Peña-Lee
Ma. Hildelita P. Alano Francisco Javier C. Galang Arnulfo H. Roldan
Juan Emmanuel B. Andaya Cesaré Edwin M. Garcia Danilo T. Sarita
Love Virgilynn T. Baking Cristina F. Gotuaco Francisco Eduardo A. Sarmiento
Yasmin I. Biticon Ma. Cristina C. Hernandez Cherie S. Sia
Betty L. Biunas Marlon B. Hernandez Irene C. Tanlimco
Richard S. Borja Shirley C. Lee Ma. Edita Lynn Z. Trinidad
Victor Geronimo S. Calo Angelyn Claire C. Liao Jasmin O. Ty
Jeannette H. Chan Regina Karla F. Libatique Virginia Y. Uy
Marie Carolina L. Chua Karyn C. Lim Esmeralda R. Vicente
Domingo P. Dayro, Jr. Mary Ann T. Lim Clarissa Maria A. Villalon
Esperose S. De Claro Jennifer Y. Macariola Charon B. Wambangco
Aileen Paulette S. De Jesus Dorothy T. Maceda Carina L. Yandoc
James Christian T. Dee Ordon P. Maningding George C. Yap
Norman D.C. Del Carmen Ronald R. Marcaida Michelle Y. Yap-Bersales
Gemma B. Deladia Mandrake P. Medina Hanz Irvin S. Yoro
Rhodin Evan O. Escolar Corazon I. Morando Mary Joy L. Yu
Therese G. Escolin Enrico J. Ong

78 C H I N A BA N K I N G C O R P O R AT I O N
SENIOR ASSISTANT VICE PRESIDENTS
Emmanuel L. Abesamis Dennis S. Go, II Julie Ann P. Santiago
Jay Angelo N. Anastacio Virginia G. Go Alejandro F. Santos
Luis R. Apostol Grace Y. Ho Charmaine V. Santos
Ma. Florentina U. Arellano Gladys Antonette Marcel P. Isidro Edgardo M. Santos
Marissa A. Auditor Josefina Anna T. Justiniano Ma. Graciela C. Santos
Faye Theresa S. Babasa Vivian T. Kho Ernanie V. Silvino
Roberto P. Basilio Maria Margaret U. Kua Ma. Cecilia D. So
Ma. Luisa O. Baylosis Ma. Arlene Mae G. Lazaro Cynthia U. Surpia
Jonathan C. Camarillo Eric Y. Lee Jeanny C. Tan
Victoria G. Capacio Mary Ann L. Llanes Ma. Cecilia V. Tejada
Norman Roque V. Causing Glenn B. Lotho Michael C. Tomon
Maria Luisa C. Corpus Katherine N. Manguiat Harvey L. Ty
Patricia J. Custodio Manuel Angelo C. Monzon Hudson Q. Uy
Ma. Jeanette D. Cuyco Gil P. Navelgas Lauro C. Valera
Ricardo J. De Guzman, III Remedios Emilia R. Olivar Roderick Iluminado U. Vallejo, III
Jinky T. Dela Torre Ma. Victoria G. Pantaleon Anthony Ariel C. Vilar
Mary Ann R. Ducanes Josephine D. Paredes Rosario D. Yabut
Susan U. Ferrer Noreen S. Purificacion
Hyacinth M. Galang Rhoel T. Reyes
Marissa G. Garcia Ana Ma. Raquel Y. Samala

ASSISTANT VICE PRESIDENTS

Agnes O. Adviento Dylan Z. Dizon Mary Y. Pe
Rommel M. Agacita Leilani B. Elarmo Christine G. Peñafiel
Paul E. Akasaka Eleanor Q. Faigao Hazel Marie A. Puerto
Nellie S. D. Alar Michelle A. Farcon George Michael F. Punzalan
Ramiro A. Amanquiton Eileen M. Felipe Katherine Joyce C. Quijano
Genie N. Ang Angelito T. Fernandez Alvin A. Quintanilla
Ma. Cristina G. Antonio Marlon F. Galang Evelyn O. Ramos
Aerol Paul B. Banal Ma. Salome D. L. Garcia Niña May Q. Reynoso
Cherie Germaine T. Bautista Alvin C. Go Arlene A. Romo
Eric Von D. Baviera Maria Violeta M. Gonzales Jouzl Marie C. Roña
Jesus S.M. Belaniso, III Hector B. Holgado Eleanor D. Rosales
Robert O. Blanch Ruth D. Holmes Marie Christine S. Sagrado-Cabato
Maria Charmina B. Bonifacio Carlo Ramon R. Jayme Anita Y. Samala
Christine Z. Briones Jamille Castor M. Jongko Roberto J. Sanchez, Jr.
Alalyn J. Buragay Primitivo B. Julito, Jr. Edellina C. Santiago
Agnes C. Calimbahin Lorelie Y. Lacson Fernando S. Santos, III
Theresa Imelda T. Calpo Ma. Teresa O. Lao Jaydee C. Tan
Alex M. Campilan Ma. Giselle A. Liceralde Susan Y. Tang
Sherry Ann F. Canillas Ma. Gladys C. Liwag Michaela L. Teng
Hermenegildo G. Cariño Maria Melinda O. Lo Arnel Ferdinand R.Tiglao
Ma. Cecilia M. Chiu Kristha Feliz A. Mangahas Jacqueline T. Tomacruz
Bryan Q. Chua Jose G.Maravilla, III Edna A. Torralba
Ma. Rosalie F. Cipriano Sheila Jane F. Medrero Karen W. Tua
Jose Juan Maria B. Cordero Susie W. Napili Cristina C. Ty
Amelia Consolacion B. Cruz Jose L. Nario, Jr. Norman P. Ureta
Allan Gerard C. Daluz Tadeos R. Natividad David Andrew P. Valdellon
Aimee-Cel A. De Leon Wendy G. Ngo Jonathan T. Valeros
Reylenita M. Del Rosario Eleanor C. Ona Catherine D. Yabes
Ma. Lourdes L. Dela Vega Sonia M. Ong April Marie O. Yago
Katherine Jean S. M. Diamante Lilian B. Orlina

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 019 79
 Awards and Distinctions

• Best Managed Fund of the Year Award - Dollar Long-Term Bond Category
Chartered Financial Analyst Society Philippines (CFA) 2019 Charter Awards

• Best Corporate Governance Disclosure and Transparency Award

BSP Stakeholder Awards - Bangko Sentral ng Pilipinas

• The Pagtugon Award for Universal and Commercial Banks

BSP Stakeholder Awards - Bangko Sentral ng Pilipinas

• Best Debt Capital Markets (DCM) House - Philippines

Finance Asia- Country Awards for Achievement 2019

• P6 Billion term loan facility for Atlantic Gulf and Pacific Company (AG&P) – Oil and Gas Deal of the Year
2019 Triple A Asia Infrastructure Awards - The Asset

• P9 Billion financing for Apo Agua Infrastructure – Utility Deal of the Year
2019 Triple A Asia Infrastructure Awards - The Asset

• Four Arrow Recognition - Corporate Governance

Golden Arrow Recognition Ceremony 2019 - Institute of Corporate Directors (ICD)

• Among the Top Corporate Securities Market Makers and Top Fixed-income Brokering participants
2019 PDS Annual Awards Night - Philippine Dealing System

• Process Innovation – Easy Tax Management

Client Innovation Awards 2019 – Infosys Finacle

• Best Bond Adviser - Domestic Category

The Asset’s 2018 Triple A Awards - The Asset

• Silver Anvil – PR Tool Category (China Bank Annual & Financial Sustainability Report)
55th Anvil Awards – Public Relations Society of the Philippines

80 C H I N A BA N K I N G C O R P O R AT I O N
Financial Statements Contents

82 Disclosure on Capital Structure and Capital Adequacy

92 Report of the Audit Committee

Statement of Management’s Responsibility for Financial

93
Statements

94 Independent Auditors’ Report

Management’s Discussion on Result of Operations and

98
Financial Condition

99 Balance Sheets

100 Statements of Income

101 Statements of Comprehensive Income

102 Statements of Changes in Equity

106 Statements of Cash Flows

Notes to Financial Statements

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 81
 Disclosure on Capital Structure
and Capital Adequacy
Capital Fundamentals

We believe that China Bank can only achieve sustainable growth by maintaining strong capital fundamentals. Major business
initiatives are undertaken with the appropriate capital planning which also takes into consideration constraints and changes in
the regulatory environment. This is necessary to ensure that the Bank’s commercial objectives are equally aligned with its ability
to maintain a capital position at par with the industry. The Board and Senior Management recognizes that a balance should
be achieved with respect to China Bank’s earnings outlook vis-à-vis capital fundamentals that can take advantage of growth
opportunities while maintaining sufficient capacity to absorb shocks.

Risk-based capital components, including deductions, on a parent and consolidated basis:

Qualifying Capital (Basel III) Consolidated Parent Company

In PhP Million 2019
Common Equity Tier 1 Capital
Paid-up common stock 26,859.00 26,859.00
Additional paid-in capital 17,122.63 17,122.63
Retained Earnings 48,565.57 45,914.53
Other Comprehensive Income 102.88 102.88
Minority Interest 108.27 –
Less: Retained Earnings Appropriated for General Loan Loss Provision (2,278.60) (2,278.60)
Less: Unsecured DOSRI (212.58) (194.68)
Less: Deferred Tax Assets (2,766.69) (2,145.79)
Less: Goodwill (563.47) (222.84)
Less: Other Intangible Assets (3,561.33) (949.51)
Less: Defined Benefit Pension Fund Assets/Liabilities (990.57) (990.57)
Less: Investment in Subsidiary (351.77) (11,949.21)
Less: Significant Minority Investment (704.17) (704.17)
Less: Other Equity Investment (62.99) (60.80)
Total CET 1 Capital 81,266.17 70,502.88
Additional Tier 1 CapitaI – –
Total Tier 1 Capital 81,266.17 70,502.88
Tier 2 Capital
General Loan Loss Provision 5,799.34 5,117.63
Total Tier 2 Capital 5,799.34 5,117.63
Total Qualifying Capital 87,065.51 75,620.50

Qualifying Capital (Basel III) Consolidated Parent Company

In PhP Million 2018
Common Equity Tier 1 Capital
Paid-up common stock 26,859.00 26,859.00
Additional paid-in capital 17,122.63 17,122.63
Retained Earnings 40,793.28 38,130.79
Other Comprehensive Income (154.84) (154.84)
Minority Interest 106.24 –
Less: Retained Earnings Appropriated for General Loan Loss Provision (2,971.93) (2,747.04)
Less: Unsecured DOSRI (189.78) (182.21)
Less: Deferred Tax Assets (1,676.64) (1,211.81)
Less: Goodwill (563.47) (222.84)
Less: Other Intangible Assets (3,222.15) (603.77)
Less: Defined Benefit Pension Fund Assets/Liabilities (1,201.40) (1,201.40)
Less: Investment in Subsidiary (387.64) (10,761.99)
Less: Significant Minority Investment (234.40) (234.40)
Less: Other Equity Investment (44.93) (42.74)
Forward

82 C H I N A B A N K I N G C O R P O R AT I O N
 Qualifying Capital (Basel III) Consolidated Parent Company
In PhP Million 2018
Total CET 1 Capital 74,233.95 64,749.39
Additional Tier 1 Capital – –
Total Tier 1 Capital 74,233.95 64,749.39
Tier 2 Capital
General Loan Loss Provision 5,658.62 4,982.36
Total Tier 2 Capital 5,658.62 4,982.36
Total Qualifying Capital 79,892.58 69,731.75

Risk-based capital ratios:

Basel III Consolidated Parent Company
2019
In PhP Million
CET 1 capital 92,758.35 89,999.04
Less regulatory adjustments (11,492.18) (19,496.17)
Total CET 1 capital 81,266.17 70,502.88
Additional Tier 1 capital – –
Total Tier 1 capital 81,266.17 70,502.88
Tier 2 capital 5,799.34 5,117.63
Total qualifying capital 87,065.51 75,620.50
Risk weighted assets 636,709.99 558,834.34
CET 1 capital ratio 12.76% 12.62%
Tier 1 capital ratio 12.76% 12.62%
Total capital ratio 13.67% 13.53%

Basel III Consolidated Parent Company

2018
In PhP Million
CET 1 capital 84,726.30 81,957.58
Less regulatory adjustments (10,492.35) (17,208.19)
Total CET 1 capital 74,233.95 64,749.39
Additional Tier 1 capital – –
Total Tier 1 capital 74,233.95 64,749.39
Tier 2 capital 5,658.62 4,982.36
Total qualifying capital 79,892.58 69,731.75
Risk weighted assets 610,400.96 535,110.36
CET 1 capital ratio 12.16% 12.10%
Tier 1 capital ratio 12.16% 12.10%
Total capital ratio 13.09% 13.03%

The regulatory Basel III qualifying capital of the Group consists of Common Equity Tier 1 capital (going concern capital), which
comprises paid-up common stock, additional paid-in capital, surplus including current year profit, other comprehensive income
and minority interest less required deductions such as unsecured credit accommodations to DOSRI, deferred income tax, other
intangible assets, goodwill, defined benefit pension fund assets/liabilities, and investment in subsidiaries. The other component
of regulatory capital is Tier 2 capital (gone-concern capital), which includes general loan loss provision. A capital conservation
buffer of 2.5% comprised of CET 1 capital is likewise imposed in the Basel III capital ratios.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 83
 Disclosure on Capital Structure
and Capital Adequacy
Full reconciliation of all regulatory capital elements back to the balance sheet in the audited financial statements is presented
below:

Consolidated
2019 2018
Audited Audited
Qualifying Reconciling Financial Qualifying Reconciling Financial
Capital Items Statements Capital Items Statements
Common stock 26,859 – 26,859 26,859 – 26,859
Additional paid-in capital 17,123 – 17,123 17,123 – 17,123
Retained Earnings 48,566 (3,591) 52,157 40,793 (3,735) 44,528
Net unrealized gains or losses on AFS securities 236 (182) 418 (228) 475 (703)
Cumulative foreign currency translation and
others (133) 260 (393) 73 29 44
Non-controlling interest 108 96 12 106 94 12
Deductions (11,492) (11,492) – (10,492) (10,492) –
Tier 1 (CET1) capital/Total equity 81,267 (14,909) 96,176 74,234 (13,629) 87,857
Tier 2 capital 5,799 5,799 – 5,659 5,659 –
Total qualifying capital/Total equity 87,066 (9,110) 96,176 79,893 (8,060) 87,857

Parent Company
2019 2018
Qualifying Reconciling Audited Qualifying Reconciling Audited
Capital Items Financial Capital Items Financial
Statements Statements
Common stock 26,859 – 26,859 26,859 – 26,859
Additional paid-in capital 17,123 – 17,123 17,123 – 17,123
Retained Earnings 45,914 (6,243) 52,157 38,131 (6,397) 44,528
Net unrealized gains or losses on AFS securities 236 182 418 (228) 475 (703)
Cumulative foreign currency translation and
others (133) 260 (393) 73 (28) 45
Deductions (19,496) (19,496) – (17,208) (17,208) –
Tier 1 (CET1) capital/Total equity 70,503 (25,660) 96,163 64,750 (23,158) 87,852
Tier 2 capital 5,118 5,118 – 4,982 4,982 –
Total qualifying capital/Total equity 75,621 (20,542) 96,163 69,732 (18,176) 87,852

The capital requirements for Credit, Market and Operational Risk are listed below, on a parent and consolidated basis:

Capital Requirement Consolidated Parent

in PhP Million 2019 2018 2019 2018
Credit Risk 579,653 565,777 511,015 498,030
Market Risk 11,433 5,154 11,434 5,204
Operational Risk 45,623 39,470 36,385 31,877
Total Capital Requirements 636,709 610,401 558,834 535,111

84 C H I N A B A N K I N G C O R P O R AT I O N
Credit Risk

On-balance sheet exposures, net of specific provisions and not covered by CRM (in PhP million):

December 2019

Consolidated Parent
On-Balance Sheet Assets Exposures, net of Exposures not Exposures, net of Exposures not
Specific Provisions Covered by CRM Specific Provisions Covered by CRM
Cash on Hand 17,024.41 17,024.41 14,703.32 14,703.32
Checks and Other Cash Items 169.25 169.25 153.52 153.52
Due from BSP 99,630.53 99,630.53 88,109.65 88,109.65
Due from Other Banks 10,226.96 10,226.96 8,645.55 8,645.55
Financial Assets at FVPL 9.89 – 9.89 –
Financial Assets at FVOCI 16,653.16 15,664.31 14,698.42 13,709.57
Investment Securities at Amortized Cost 179,688.25 179,688.25 175,854.50 175,854.50
Loans and Receivables 579,963.10 552,460.47 514,663.87 494,409.87
Loans and Receivables arising from Repurchase
12,461.68 12,461.68 5,449.71 5,449.71
Agreements
Sales Contract Receivables 1,038.71 1,038.71 205.81 205.81
Real and Other Properties Acquired 3,258.61 3,258.61 307.77 307.77
Other Assets 17,176.15 17,176.15 11,000.11 11,000.11
Total On-Balance Sheet Assets 937,300.71 908,799.34 833,802.11 812,549.37

December 2018

Consolidated Parent
On-Balance Sheet Assets Exposures, net of Exposures not Exposures, net of Exposures not
Specific Provisions Covered by CRM Specific Provisions Covered by CRM
Cash on Hand 15,445.99 15,445.99 13,579.54 13,579.54
Checks and Other Cash Items 130.09 130.09 125.76 125.76
Due from BSP 101,890.53 101,890.53 95,093.70 95,093.70
Due from Other Banks 9,455.45 9,455.45 7,837.89 7,837.89
Financial Assets at FVPL 845.88 835.61 840.73 830.46
Financial Assets at FVOCI 10,065.70 9,038.86 8,307.23 7,280.39
Investment Securities at Amortized Cost 174,576.92 174,576.92 165,788.22 165,788.22
Loans and Receivables 513,035.64 484,762.89 449,324.99 427,314.42
Loans and Receivables arising from Repurchase
10,004.22 10,004.22 7,002.96 7,002.96
Agreements
Sales Contract Receivables 1,046.22 1,046.22 194.47 194.47
Real and Other Properties Acquired 3,635.33 3,635.33 179.02 179.02
Other Assets 12,573.56 12,573.56 7,290.20 7,290.20
Total On-Balance Sheet Assets 852,705.53 823,395.69 755,564.70 732,517.03

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 85
 Disclosure on Capital Structure
and Capital Adequacy
December 2017

Consolidated Parent
On-Balance Sheet Assets Exposures, net of Exposures not Exposures, net of Exposures not
Specific Provisions Covered by CRM Specific Provisions Covered by CRM
Cash on Hand 11,967.20 11,967.20 10,473.04 10,473.04
Checks and Other Cash Items 105.31 105.31 86.31 86.31
Due from BSP 98,490.46 98,490.46 91,717.49 91,717.49
Due from Other Banks 15,641.48 15,641.48 14,066.62 14,066.62
Financial Assets at FVPL 3,421.44 3,411.69 3,421.44 3,411.69
Available-for-Sale Financial Assets 46,569.31 45,594.23 43,303.71 42,328.63
Held-to-Maturity Financial Assets 66,079.64 66,079.64 62,284.34 62,284.34
Unquoted Debt Securities Classified as 1,126.59 1,126.59 1,021.49 1,021.49
Loans
Loans and Receivables 451,658.56 424,289.21 390,162.15 367,704.31
Loans and Receivables arising from Repurchase
Agreements 18,755.60 18,755.60 17,350.99 17,350.99
Sales Contract Receivables 922.96 922.96 178.73 178.73
Real and Other Properties Acquired 4,135.94 4,135.94 418.63 418.63
Other Assets 11,577.51 11,577.51 8,274.34 8,274.34
Total On-Balance Sheet Assets 730,452.01 702,097.82 642,759.29 619,316.62

Credit equivalent amount for off-balance sheet items, broken down by type of exposures (in PhP million):

2019 2018 2017

Off-balance Sheet Consolidated Parent Consolidated Parent Consolidated Parent
Assets Notional Credit Notional Credit Notional Credit Notional Credit Notional Credit Notional Credit
Principal Equivalent Principal Equivalent Principal Equivalent Principal Equivalent Principal Equivalent Principal Equivalent
Direct Credit Substitutes – – – – – – – – – – – –
Transaction-related
63,504.13 31,752.06 63,386.79 31,693.40 18,899.11 9,449.56 18,750.12 9,375.06 17,856.22 8,928.11 17,643.24 8,821.62
contingencies
Trade-related
contingencies arising
5,286.34 1,057.27 5,273.64 1,054.73 5,671.98 1,134.40 5,645.42 1,129.08 8,244.10 1,648.82 8,079.90 1,615.98
from movement of
goods
Other commitments
(which can be
unconditionally
208,932.75 – 208,575.86 – 153,999.03 – 153,462.68 – 148,317.90 – 145,897.78 –
cancelled at any time
by the bank without
prior notice)
Total Notional
Principal and Credit 277,723.22 32,809.33 277,236.30 32,748.12 178,570.12 10,583.95 177,858.23 10,504.15 174,418.22 10,576.93 171,620.92 10,437.60
Equivalent Amount

Credit equivalent amount for counterparty credit risk in the trading book, broken down by type of exposures (in PhP million):

December 2019

Consolidated Parent
Standardized Approach Credit
Notional Principal Credit Equivalent Notional Principal
Equivalent
Interest Rate Contracts 1,864.61 13.22 1,864.61 13.22
Exchange Rate Contracts 36,082.99 472.21 36,082.99 472.21
Equity Contracts – – – –
Credit Derivatives – – – –
Total Notional Principal and
Credit Equivalent Amount 37,947.59 485.43 37,947.59 485.43

86 C H I N A B A N K I N G C O R P O R AT I O N
December 2018

Consolidated Parent
Standardized Approach Credit
Notional Principal Credit Equivalent Notional Principal
Equivalent
Interest Rate Contracts 3,059.34 37.49 3,059.34 37.49
Exchange Rate Contracts 57,082.77 908.62 57,082.77 908.62
Equity Contracts - - - -
Credit Derivatives - - - -
Total Notional Principal and
Credit Equivalent Amount 60,142.11 946.11 60,142.11 946.11

December 2017

Consolidated Parent
Standardized Approach Credit
Notional Principal Credit Equivalent Notional Principal
Equivalent
Interest Rate Contracts 9,991.39 41.21 9,991.39 41.21
Exchange Rate Contracts 33,068.49 625.66 33,068.49 625.66
Equity Contracts – – – –
Credit Derivatives – – – –
Total Notional Principal and
Credit Equivalent Amount 43,059.88 666.87 43,059.88 666.87

Net Exposures after CRM for counterparty credit risk in the banking book, broken down by type of exposures (in PhP million):

December 2019

Consolidated Parent
Standardized Approach Fair Value/ Net Exposures Fair Value/ Net Exposures
Carrying Amount after CRM Carrying Amount after CRM
Derivative Transactions – – – –
Repo-Style Transactions 19,443.72 2,652.82 19,443.72 2,652.82
Total Fair Value/Carrying Amount and
19,443.72 2,652.82 19,443.72 2,652.82
Net Exposures after CRM

December 2018

Consolidated Parent
Standardized Approach Fair Value/ Net Exposures Fair Value/ Net Exposures
Carrying Amount after CRM Carrying Amount after CRM
Derivative Transactions – – – –
Repo-Style Transactions 35,488.28 8,158.34 35,488.28 8,158.34
Total Fair Value/Carrying Amount and
35,488.28 8,158.34 35,488.28 8,158.34
Net Exposures after CRM

December 2017

Consolidated Parent
Standardized Approach Fair Value/ Net Exposures Fair Value/ Net Exposures
Carrying Amount after CRM Carrying Amount after CRM
Derivative Transactions – – – –
Repo-Style Transactions 17,415.76 3,546.90 17,415.76 3,546.90
Total Fair Value/Carrying Amount and
Net Exposures after CRM 17,415.76 3,546.90 17,415.76 3,546.90

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 87
 Disclosure on Capital Structure
and Capital Adequacy
The following credit risk mitigants are used in the December 2019 CAR Report:
• ROP warrants
• ROP guarantee
• HGC guarantee
• Holdout vs. Peso deposit
• Holdout vs. FCDU deposit
• Assignment / Pledge of Government Securities

Total credit exposure after risk mitigation, broken down by type of exposures, risk buckets, as well as those that are deducted
from capital (in PhP million):

2019
Weight
Band Consolidated Parent Company
On-balance Off-balance On-balance Off-balance
Counterparty Total Counterparty Total
sheet sheet sheet sheet
Below 100% 469,596.95 1,555.79 2,971.71 474,124.45 430,163.75 1,555.79 2,971.71 434,691.26
100% and
439,202.39 31,253.54 166.53 470,622.47 382,385.62 31,192.33 166.53 413,744.49
Above
Total 908,799.34 32,809.33 3,138.25 944,746.92 812,549.37 32,748.12 3,138.25 848,435.75

2018
Weight
Band Consolidated Parent Company
On-balance Off-balance On-balance Off-balance
Counterparty Total Counterparty Total
sheet sheet sheet sheet
Below 100% 344,646.31 – 9,032.78 353,679.09 307,944.31 – 9,032.78 316,977.09
100% and
478,749.38 10,583.95 71.67 489,405.01 424,572.72 10,504.15 71.67 435,148.54
Above
Total 823,395.69 10,583.95 9,104.45 843,084.09 732,517.03 10,504.15 9,104.45 752,125.63

2017
Weight
Band Consolidated Parent Company
On-balance Off-balance On-balance Off-balance
Counterparty Total Counterparty Total
sheet sheet sheet sheet
Below 100% 299,057.46 – 4,065.92 303,123.38 268,167.72 – 4,065.92 272,233.64
100% and
403,040.36 10,576.93 147.84 413,765.14 351,148.90 10,437.60 147.84 361,734.34
Above
Total 702,097.82 10,576.93 4,213.77 716,888.52 619,316.62 10,437.60 4,213.77 633,967.98

88 C H I N A B A N K I N G C O R P O R AT I O N
Total credit risk-weighted assets, broken down by type of exposures (in PhP million):

2019
Weight Consolidated Parent Company
Band On-balance Off-balance On-balance Off-balance
Counterparty Total Counterparty Total
sheet sheet sheet sheet
Below
100% 104,405.21 311.16 1,218.67 105,935.03 95,647.30 311.16 1,218.67 97,177.13
100% and
Above 442,498.63 31,253.54 166.53 473,918.70 383,146.28 31,192.33 166.53 414,505.15
Covered by
CRM 80.54 – – 80.54 80.54 – – 80.54
Excess
GLLP 280.75 747.37
Total 546,984.37 31,564.70 1,385.20 579,653.53 478,874.12 31,503.49 1,385.20 511,015.45

2018
Weight Consolidated Parent Company
Band On-balance Off-balance On-balance Off-balance
Counterparty Total Counterparty Total
sheet sheet sheet sheet
Below
100% 69,574.44 – 3,677.48 73,251.92 58,894.98 – 3,677.48 62,572.46
100% and
Above 481,834.50 10,583.95 71.67 492,490.13 424,967.08 10,504.15 71.67 435,542.90
Covered by
CRM 120.44 – – 120.44 120.44 – – 120.44
Excess
GLLP 85.85 205.83
Total 551,529.39 10,583.95 3,749.15 565,776.65 483,982.50 10,504.15 3,749.15 498,029.98

2017
Weight Consolidated Parent Company
Band On-balance Off-balance On-balance Off-balance
Counterparty Total Counterparty Total
sheet sheet sheet sheet
Below
100% 61,429.58 – 1,990.76 63,420.34 50,785.80 – 1,990.76 52,776.56
100% and
Above 406,743.33 10,576.93 147.84 417,468.11 352,027.29 10,437.60 147.84 362,612.73
Covered by
CRM 67.74 – – 67.74 67.74 – – 67.74
Excess
GLLP – –
Total 468,240.65 10,576.93 2,138.60 480,956.18 402,880.83 10,437.60 2,138.60 415,457.04

The credit ratings given by the following rating agencies were used to determine the credit risk weight of On-balance sheet,
Off-balance sheet, and Counterparty exposures:

For all rated credit exposures regardless of currency

Standard & Poor (S&P) Moody’s
Fitch
For PHP-denominated debts of rated domestic entities
Philratings

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 89
 Disclosure on Capital Structure
and Capital Adequacy
Market Risk-Weighted Assets

The Standardized Approach is used in China Bank’s market risk-weighted assets. The total market risk-weighted asset of the
Bank as of December 2019 is P11.43 billion for both parent company and on a consolidated basis. This is composed of Interest
Rate exposures amounting to P10.35 billion and Foreign Exposures amounting to P1.08 billion for both the parent bank and on
a consolidated basis.

Consolidated Parent Company Consolidated Parent Company

Interest Rate Exposures (in PhP Mn) 2019 2018
Specific Risk 300.11 300.11 87.72 87.72
General Market Risk
PHP 242.90 242.90 61.52 61.52
FCY 285.02 285.02 130.27 130.27
Total Capital Charge 828.03 828.03 279.51 279.51
Adjusted Capital Charge 1,035.04 1,035.04 349.39 349.39
Subtotal Market Risk-Weighted Assets 10,350.40 10,350.40 3,493.93 3,493.93

Consolidated Parent Company Consolidated Parent Company

Equity Exposures 2019 2018
Total Capital Charge – – 7.59 –
Adjusted Capital Charge – – 9.48 –
Subtotal Market Risk-Weighted Assets – – 94.82 –
Total Market Risk-Weighted Assets – – 94.82 –

Consolidated Parent Company Consolidated Parent Company

Foreign Exchange Exposures 2019 2018
Total Capital Charge 86.65 86.70 125.23 136.78
Adjusted Capital Charge 108.31 108.37 156.53 170.97
Subtotal Market Risk-Weighted Assets 1,083.11 1,083.74 1,563.35 1,709.75
Total Market Risk-Weighted Assets 11,433.51 11,434.14 5,145.10 5,203.68

90 C H I N A B A N K I N G C O R P O R AT I O N
Operational, Legal, and Other Risks

The Bank has established an Operational Risk Management Framework which forms part of its enterprise-wide risk management
system. It outlines the policies, processes and procedures and the tools introduced to implement an effective operational risk
management system covering all the business and operating units of the Bank as well as its subsidiaries. Among the tools that
are already in place that provides the Bank with the ability to identify and assess material operational risks include the Risk &
Control Self-Assessment (RCSA) and the Key Risk Indicators (KRI). Both financial and non-financial impacts of operational risk
are captured for this purpose.

The overall operational risk exposure of the Bank is determined using a number of methodologies which include the scenario
analysis exercise. As of December 2019, the equivalent capital allocated for Operational Risk amounted to PHP 3.64 billion
which is more than adequate to cover the computed overall operational risk exposure. Moreover, the Bank through its Legal
& Collection Division identified and assessed potential losses attributed to Legal Risk and the amount is not material to
significantly affect the Bank’s capital position.

Operational Risk-Weighted Assets

The BIA is used to determine the equivalent operational risk-weighted assets of China Bank. On a parent basis, the Bank’s
operational risk-weighted asset as of December 2019 is P36.38 billion while on a consolidated basis, the Bank’s operational
risk- weighted assets is P45.62 billion. On a parent basis, the Bank’s operational risk-weighted asset as of December 2018 is
P31.88 billion while on a consolidated basis, the Bank’s operational risk-weighted assets is P39.47 billion.

Interest Rate Risk In The Banking Book

The Bank’s interest rate risk in the banking book (IRRBB) originates from its holdings of interest rate sensitive assets and
interest rate sensitive liabilities. The repricing mismatch exposes the Bank to movement in market interest rates. To measure
its impact to the Bank’s net interest income, the Bank performs a sensitivity analysis thru the Earnings-at-Risk (EaR) method.
In this method, Loans are assumed affected by interest rate movements on its repricing date for floating rates and on its
maturity for fixed rates. Demand and savings deposits, on the other hand, are generally considered not sensitive to interest rate
movements. EaR results are discussed in Asset and Liability (ALCO) meetings every week. Adverse changes in interest rates
during stress events expose the Bank to higher interest rate risk. Thus, stress testing is performed and results are reported to
the Risk Oversight Committee (ROC) every month.

Provided in the table below are the approximate addition and reduction in annualized net interest income of a 100bps change
across the yield curve.

Consolidated Parent
Earnings-at-Risk in PhP Million
2019 2018 2019 2018
Upward 979 988 1,003 1,157

Downward 973 939 996 1,108

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 91
 Report of the Audit Committee

The Audit Committee (Committee) is a Board-level committee given the role auditors remain independent and are given unrestricted access to records,
of promoting the quality of audit throughout the organization to add value to properties and personnel, to enable them to perform their audit functions.
the governance, risk management, and internal control processes of the Bank. The Committee also approved the engagement fees of the external auditors in
As a provider of quality and significant assurance and consulting services, the connection with the audit of the financial statements of the Bank, independent
Bangko Sentral ng Pilipinas (BSP) tasks the Committee to oversee the financial validation of votes for stockholders’ meeting, and issuance of comfort letter for
reporting framework of the Bank, monitor and evaluate the adequacy and the long-term fixed rate bond, among others.
effectiveness of internal control system, oversee the internal and external audit
function, investigate significant issues and concerns, oversee implementation Oversight of Internal Audit Function
of corrective actions, and establish a whistleblowing mechanism. The
Committee’s organization, authority, and duties and responsibilities are defined The Committee assessed the adequacy and effectiveness of the internal audit
in a Charter approved by the Board of Directors. function. It reviewed and approved the audit scope and frequency provided
in the proposed audit plan, and discussed the accomplishments versus plans
Three (3) non-executive members of the Board of Directors comprise the of internal audit’s Quality Assurance Department, Branch Audit Department,
Committee – Lead Independent Director Alberto S. Yao is the Chairman, and Head Office and Subsidiaries Audit Department, and IT Audit Department, and
Non-Executive Director Joaquin T. Dee and Independent Director Philip S.L. Tsai approved their budget. It also evaluated the updates, deferments and changes
are the members. All of them have accounting, auditing, or related financial in audit engagements and audit plans, and took up the status updates results
management expertise or experience commensurate with the size, complexity of monitoring of outstanding audit activities and issues as well as the resolution
of operations and risk profile of the Bank. rate. Among those taken for the year 2019 were the results of audit of risk
and operations models, recalibration of audit rating system and overall scoring
For the year ended December 31, 2019, the Committee held 12 regular and 3 scale for validation of financial risk management models to align with internal
special meetings. The main activities conducted, discussed and deliberated for and best practices; audit committee effectiveness; internal audit charter and
the covered period are set out below. manual; status of external quality assessment review; sponsorship program
for professional certifications of internal auditors; review of pandemic plan and
Oversight of Financial Reporting Framework business continuity and disaster recovery plans testing exercises; approval of
audit management system, audit policies on independence and objectivity,
The Committee reviewed and discussed with management and external outsourcing, and handling consulting services.
auditors, financial reporting processes, practices and controls to ensure that
information and reports are accurate, comprehensive and free of material On the internal auditor, the Committee evaluated performance of the Chief
misstatements. Before the financial statements, interim reports, and audit Audit Executive (CAE) and ensured the latter and her performance of internal
results are submitted to the Board, the Committee deliberated on the impact audit functions are free from interference by outside parties. The Committee
of the adoption of new or changes in accounting policies and practices, continued to maintain an open and timely communication with the CAE and
standards and interpretations in the results; reasonableness of estimates meet without management presence to discuss internal audit plans and
and assumptions used in the preparation of financial statements; significant activities and updates on any other matters of mutual interest. During the
differences and adjustments resulting from the audit if any; and compliance second half of 2019, the Committee internally sourced and selected a Deputy
with the Philippine Financial Reporting Standards (PFRS), International Financial CAE and set out the processes and timeline for him to transition to eventually
Reporting Standards (IFRS), Tax Reform for Acceleration and Inclusion (TRAIN) assume the position of CAE in view of the current CAE’s impending retirement.
Act and related tranches of the comprehensive tax reform program of the
government, and various relevant Securities and Exchange Commission (SEC) Lastly, the Committee confirmed the professional opinion of the CAE
and Bureau of Internal Revenue (BIR) issuances on accounting, auditing and of adherence to the Institute of Internal Auditors’ (IIA) Standard and
regulatory standards. Implementation Guide 2130 on Control, Standard 1100 on Independence and
Objectivity, and Standards and Code of Ethics for the audit year.
Monitoring and Evaluation of Adequacy and Effectiveness of Internal
Control Other Audit Matters
The Committee focused on the investigation of significant issues and concerns,
The Committee assessed the implementation, adequacy and effectiveness and ensured the implementation of corrective actions in a timely manner to
of the internal control policies of the Bank, covering financial, operational and address the weaknesses, non-compliance with policies, laws and regulations,
compliance controls, and risk management. Throughout the year, periodic and other issues identified by the internal and external auditors and regulators.
monitoring was conducted to identify and address weaknesses to ensure On the whistleblowing mechanism of the Bank, the Committee received and
that appropriate controls are in place including in areas and activities where discussed reports from the Human Resources Group on concerns raised about
the Bank transitioned from manual to automated processes. It looked into possible improprieties or malpractices in matters of internal control, code of
the internal control issues noted during regular, special and limited audits conduct or other issues and resolution.
of various branches, units, applications, and services of the Bank, including
the effectiveness of information technology security and controls. Based on Based on the foregoing, the Committee views that the internal control and
management’s responses and timelines and plans presented, the Committee financial reporting framework of the Bank are in place, adequate, effective and
determined that appropriate actions have been taken and deliverables have efficient, and that the financial statements present fairly the financial position
been accomplished within the set timeline in order to address significant and performance of the Bank in all material respects in accordance with the
deficiencies and weaknesses, and that controls have been put up to prevent relevant auditing and accounting standards.
recurrence of similar issues.
Makati City, March 18, 2020.
Oversight of External Audit Function

For the covered period, the Committee recommended to the Board the
engagement of SyCip Gorres Velayo & Co. (SGV) as the external auditors of ALBERTO S. YAO
the Bank based on a careful evaluation of their qualifications, performance, Chairman
competence, integrity, and independence. The Committee met with the
external auditors to discuss the results of audit and confirmation procedures,
and ensure that the scope and plan of annual audit cover areas prescribed by
the BSP and other regulatory agencies. It discussed with the external auditors
key audit matters and audit strategy that addresses the key risks, and made JOAQUIN T. DEE PHILIP S.L. TSAI
inquiries relating to matters relevant to audit. It ensured that the external Member Member

92 C H I N A B A N K I N G C O R P O R AT I O N
Statement of Management’s Responsibility
for Financial Statements
The management of China Banking Corporation (the Bank) is responsible for the preparation and fair presentation of the
consolidated financial statements including the schedules attached therein, for the years ended December 31, 2019 and 2018,
in accordance with the prescribed financial reporting framework indicated therein, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Bank’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Bank’s financial reporting process.

The Board of Directors reviews and approves the consolidated financial statements including the schedules attached therein,
and submits the same to the stockholders.

SyCip Gorres Velayo & Co., the independent auditors appointed by the stockholders, has audited the consolidated financial
statements of the Bank in accordance with Philippine Standards on Auditing, and in its report to the stockholders, has expressed
its opinion on the fairness of presentation upon completion of such audit.

Hans T. Sy William C. Whang Patrick D. Cheng

Chairman of the Board President Chief Finance Officer

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 93
 Independent Auditors’ Report

The Board of Directors and Stockholders

China Banking Corporation
8745 Paseo de Roxas cor. Villar St.
Makati City

Report on the Consolidated and Parent Company Financial

Statements

Opinion

We have audited the consolidated financial statements of China procedures performed to address the matters below, provide the basis
Banking Corporation and its subsidiaries (the Group) and the parent for our audit opinion on the accompanying consolidated and parent
company financial statements of China Banking Corporation, which company financial statements.
comprise the consolidated and parent company balance sheets as
at December 31, 2019 and 2018, and the consolidated and parent Applicable to the audit of the Consolidated and Parent Company
company statements of income, consolidated and parent company Financial Statements
statements of comprehensive income, consolidated and parent
company statements of changes in equity and consolidated and parent Recognition of Expected Credit Losses (ECL) on loans and
company statements of cash flows for each of the three years in receivables
the period ended December 31, 2019, and notes to the consolidated
and parent company financial statements, including a summary of The Group’s and the Parent Company’s adoption of the ECL model
significant accounting policies. is significant to our audit as it involves the exercise of significant
management judgment. Key areas of judgment include: segmenting
In our opinion, the accompanying consolidated and parent company the Group’s and the Parent Company’s credit risk exposures;
financial statements present fairly, in all material respects, the financial determining the method to estimate ECL; defining default; identifying
position of the Group and the Parent Company as at December 31, 2019 exposures with significant deterioration in credit quality; determining
and 2018, and their financial performance and their cash flows for each assumptions to be used in the ECL model such as the counterparty
of the three years in the period ended December 31, 2019 in accordance credit risk rating, the expected life of the financial asset and expected
with Philippine Financial Reporting Standards (PFRSs). recoveries from defaulted accounts; and incorporating forward-looking
information (called overlays) in calculating ECL.
Basis for Opinion
Allowance for credit losses for loans and receivables as of December
We conducted our audits in accordance with Philippine Standards 31, 2019 for the Group and the Parent Company amounted to P8.56
on Auditing (PSAs). Our responsibilities under those standards are billion and P6.94 billion, respectively. Provision for credit losses of the
further described in the Auditor’s Responsibilities for the Audit of the Group and the Parent Company in 2019 amounted to P2.57 billion and
Consolidated and Parent Company Financial Statements section of our P2.21 billion, respectively.
report. We are independent of the Group and the Parent Company
in accordance with the Code of Ethics for Professional Accountants in Refer to Note 16 of the financial statements for the details of the
the Philippines (Code of Ethics) together with the ethical requirements allowance for credit losses using the ECL model.
that are relevant to our audit of the consolidated and parent company
financial statements in the Philippines, and we have fulfilled our other Audit Response
ethical responsibilities in accordance with these requirements and the
Code of Ethics. We believe that the audit evidence we have obtained is We obtained an understanding of the board approved methodologies
sufficient and appropriate to provide a basis for our opinion. and models used for the Group’s and the Parent Company’s different
credit exposures and assessed whether these considered the
Key Audit Matters requirements of PFRS 9 to reflect an unbiased and probability-weighted
outcome, and to consider time value of money and the best available
Key audit matters are those matters that, in our professional judgment, forward-looking information.
were of most significance in our audit of the consolidated and parent
company financial statements of the current period. These matters We (a) assessed the Group’s and the Parent Company’s segmentation
were addressed in the context of our audit of the consolidated and of its credit risk exposures based on homogeneity of credit risk
parent company financial statements as a whole, and in forming our characteristics; (b) verified the definition of default and significant
opinion thereon, and we do not provide a separate opinion on these increase in credit risk criteria against historical analysis of accounts and
matters. For each matter below, our description of how our audit credit risk management policies and practices in place, (c) tested the
addressed the matter is provided in that context. Group’s and the Parent Company’s application of internal credit risk
rating system by reviewing the ratings of sample credit exposures; (d)
We have fulfilled the responsibilities described in the Auditor’s assessed whether expected life is different from the contractual life
Responsibilities for the Audit of the Consolidated and Parent Company by testing the maturity dates reflected in the system of record and
Financial Statements section of our report, including in relation to considering management’s assumptions regarding future payments,
these matters. Accordingly, our audit included the performance of advances, extensions, renewals and modifications; (e) inspected
procedures designed to respond to our assessment of the risks financial information used to derive baseline probability of default; (f)
of material misstatement of the consolidated and parent company performed simulation of baseline probability of default and tested its
financial statements. The results of our audit procedures, including the conversion to forward-looking probability of default; (g) performed trend

94 C H I N A B A N K I N G C O R P O R AT I O N
analysis of expected default generated by third-party service providers The disclosures related to the disposals of investment securities are
and compared trend with the resulting expected credit loss (h) tested included in Notes 3 and 9 to the financial statements. Audit response
loss given default by inspecting historical recoveries and related costs,
write-offs and collateral valuations; (i) verified exposure at default We obtained an understanding of the Group’s and Parent Company’s
considering outstanding commitments and repayment scheme; and (j) objectives for disposals of investment securities at amortized cost
tested the effective interest rate used in discounting the expected loss. through inquiries with management and review of approved internal
documentations, including governance over the disposals. We
We recalculated impairment provisions on a sample basis. We reviewed evaluated management’s assessment of the impact of the disposals
the completeness of the disclosures made in the financial statements. in reference to the Group’s and the Parent Company’s business
models and the provisions of the relevant accounting standards and
Impairment testing of goodwill regulatory issuances. We also reviewed the calculation of the gains
on the disposals and the measurement of the remaining securities in
Under PFRS, the Group and the Parent Company are required to annually the affected portfolios.
test the amount of goodwill for impairment. As of December 31,
2019, the goodwill recognized in the consolidated and parent company We reviewed the disclosures related to the disposals based on the
financial statements amounting to P222.84 million is attributed to the requirements of PFRS 7, Financial Instruments: Disclosures and
Parent Company’s Retail Banking Business (RBB) segment, while Philippine Accounting Standard (PAS 1), Presentation of Financial
goodwill of P616.91 million in the consolidated financial statements Statements.
is attributed to the subsidiary bank, China Bank Savings, Inc. (CBSI).
The impairment assessment process requires significant judgment and Adoption of PFRS 16, Leases
is based on assumptions, specifically loan and deposit growth rates,
discount rate and the long-term growth rate. Effective January 1, 2019, the Group adopted PFRS 16, Leases, under
the modified retrospective approach which resulted in significant
The Group’s disclosures about goodwill are included in Notes 3 and 14 changes in the Group’s accounting policy for leases. The Group’s
to the financial statements. adoption of PFRS 16 is significant to our audit because the Group has
high volume of lease agreements; the recorded amounts are material to
Audit Response the financial statements; and adoption involves application of significant
judgment and estimation in determining the lease term, including
We involved our internal specialist in evaluating the methodologies and evaluating whether the Group is reasonably certain to exercise options
the assumptions used. These assumptions include loan and deposit to extend or terminate the lease, and in determining the incremental
growth rates, discount rate and the long-term growth rate. We compared borrowing rate. This resulted in the recognition of right of use assets
the key assumptions used, such as loan and deposit growth and long- amounting to P3.43 billion and P2.73 billion for the Group and the Parent
term growth rates against the historical performance of the RBB and Company, respectively, and lease liability amounting to Php3.67 billion
CBSI, industry/market outlook and other relevant external data. We and P2.92 billion, for the Group and the Parent Company, respectively,
tested the parameters used in the determination of the discount rate as of January 1, 2019, and the recognition of depreciation expense
against market data. We also reviewed the Group’s disclosures about of P670.78 million and P505.53 million, for the Group and the Parent
those assumptions to which the outcome of the impairment test is Company, respectively, and interest expense of P265.54 million and
most sensitive; specifically those that have the most significant effect P207.74 million, for the Group and the Parent Company, respectively,
on the determination of the recoverable amount of goodwill. for the year ended December 31, 2019.

Accounting for disposals of investment securities under a hold-to- The disclosures related to the adoption of PFRS 16 are included in
collect business model Note 2 to the financial statements.

In 2019, the Group and the Parent Company disposed investment Audit response
securities managed under the hold-to-collect (HTC) business model
with aggregate carrying amount of P18.62 billion and 13.33 billion, We obtained an understanding of the Group’s process in implementing
respectively. The disposals resulted to a gain of P1.38 billion for the new standard on leases, including the determination of the
the Group and P1.30 billion for the Parent Company. Investment population of the lease contracts covered by PFRS 16, the application
securities held under a hold-to-collect business model, which are of the short-term and low value assets exemption, the selection of the
classified as ‘Investment securities at amortized cost’, are managed transition approach and any election of available practical expedients.
to realize cash flows by collecting contractual payments over the life
of the instrument. We tested the completeness of the population of lease agreements
by comparing the number of leases per operational report against the
The accounting for the disposals is significant to our audit because the database. On a test basis, we inspected lease agreements (i.e., lease
amounts involved are material (9.97% and 7.50% of the total investment agreements existing prior to the adoption of PFRS 16 and new lease
securities at amortized cost of the Group and the Parent Company, agreements), identified their contractual terms and conditions, and
respectively and 4.00% and 4.35% of the total operating income of traced these contractual terms and conditions to the lease calculation
the Group and Parent Company, respectively). Moreover, it involves prepared by management, which covers the calculation of financial
the exercise of significant judgment by management in assessing that impact of PFRS 16, including the transition adjustments.
the disposals are consistent with the HTC business model and that it
would not impact the measurement of the remaining securities in the
affected portfolios.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 95
 Independent Auditors’ Report

For selected lease contracts with renewal and/or termination option, we Responsibilities of Management and Those Charged with
reviewed the management’s assessment of whether it is reasonably Governance for the Consolidated and Parent Company Financial
certain that the Group will exercise the option to renew or not exercise Statements
the option to terminate.
Management is responsible for the preparation and fair presentation
We tested the parameters used in the determination of the incremental of the consolidated and parent company financial statements in
borrowing rate by reference to market data. We test computed the accordance with PFRSs, and for such internal control as management
lease calculation prepared by management on a sample basis, including determines is necessary to enable the preparation of consolidated
the transition adjustments. and parent company financial statements that are free from material
misstatement, whether due to fraud or error.
We reviewed the disclosures related to the transition adjustments
based on the requirements of PFRS 16 and PAS 8, Accounting Policies, In preparing the consolidated and parent company financial
Changes in Accounting Estimates and Errors. statements, management is responsible for assessing the Group’s and
Parent Company’s ability to continue as a going concern, disclosing,
Applicable to the audit of the Consolidated Financial Statements as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to
Recoverability of deferred tax assets liquidate the Group and the Parent Company or to cease operations,
or has no realistic alternative but to do so.
The Group has recognized and unrecognized deferred tax assets.
The recoverability of deferred tax assets recognized depends on Those charged with governance are responsible for overseeing the
the Group’s ability to continuously generate sufficient future taxable Group’s and Parent Company’s financial reporting process.
income. The analysis of the recoverability of deferred tax assets was
significant to our audit because the assessment process is complex Auditor’s Responsibilities for the Audit of the Consolidated and
and judgmental, and is based on assumptions that are affected by Parent Company Financial Statements
expected future market or economic conditions and the expected
performance of the Group. Our objectives are to obtain reasonable assurance about whether the
consolidated and parent company financial statements as a whole are
The disclosures in relation to deferred income taxes are included in free from material misstatement, whether due to fraud or error, and
Notes 3 and 28 to the financial statements. to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that
Audit Response an audit conducted in accordance with PSAs will always detect a
material misstatement when it exists. Misstatements can arise
We reviewed the management’s assessment on the availability of future from fraud or error and are considered material if, individually or in
taxable income in reference to financial forecast and tax strategies. the aggregate, they could reasonably be expected to influence the
We evaluated management’s forecast by comparing the loan portfolio economic decisions of users taken on the basis of these consolidated
and deposit growth rates with that of the industry and the historical and parent company financial statements.
performance of the Group. We also reviewed the timing of the reversal
of future taxable and deductible temporary differences. As part of an audit in accordance with PSAs, we exercise professional
judgment and maintain professional skepticism throughout the audit.
Other Information We also:
Management is responsible for the other information. The other
information comprises the information included in the SEC Form 20IS • Identify and assess the risks of material misstatement of the
(Definitive Information Statement), SEC Form 17A and Annual consolidated and parent company financial statements, whether
Report for the year ended December 31, 2019, but does not include due to fraud or error, design and perform audit procedures
the consolidated and parent company financial statements and our responsive to those risks, and obtain audit evidence that is
auditor’s report thereon. The SEC Form 20IS (Definitive Information sufficient and appropriate to provide a basis for our opinion. The
Statement), SEC Form 17A and Annual Report for the year ended risk of not detecting a material misstatement resulting from fraud
December 31, 2019 are expected to be made available to us after the is higher than for one resulting from error, as fraud may involve
date of this auditor’s report. collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control.
Our opinion on the consolidated and parent company financial
• Obtain an understanding of internal control relevant to the audit
statements does not cover the other information and we will not
in order to design audit procedures that are appropriate in the
express any form of assurance conclusion thereon.
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Group’s and Parent Company’s
In connection with our audits of the consolidated and parent
internal control.
company financial statements, our responsibility is to read the other
information identified above when it becomes available and, in doing • Evaluate the appropriateness of accounting policies used and the
so, consider whether the other information is materially inconsistent reasonableness of accounting estimates and related disclosures
with the consolidated and parent company financial statements or our made by management.
knowledge obtained in the audits, or otherwise appears to be materially
misstated.

96 C H I N A B A N K I N G C O R P O R AT I O N
• Conclude on the appropriateness of management’s use of the Our audits were conducted for the purpose of forming an opinion on
going concern basis of accounting and, based on the audit the basic financial statements taken as a whole. The supplementary
evidence obtained, whether a material uncertainty exists related information required under BSP Circular No. 1074 in Note 37 and
to events or conditions that may cast significant doubt on the Revenue Regulations 152010 in Note 38 to the financial statements is
Group’s and Parent Company’s ability to continue as a going presented for purposes of filing with the BSP and Bureau of Internal
concern. If we conclude that a material uncertainty exists, we Revenue, respectively, and is not a required part of the basic financial
are required to draw attention in our auditor’s report to the related statements. Such information is the responsibility of the management
disclosures in the consolidated and parent company financial of China Banking Corporation. The information has been subjected
statements or, if such disclosures are inadequate, to modify to the auditing procedures applied in our audit of the basic financial
our opinion. Our conclusions are based on the audit evidence statements. In our opinion, the information is fairly stated, in all
obtained up to the date of our auditor’s report. However, future material respects, in relation to the basic financial statements taken
events or conditions may cause the Group and the Parent as a whole.
Company to cease to continue as a going concern.
The engagement partner on the audit resulting in this independent
• Evaluate the overall presentation, structure and content of
auditor’s report is Ray Francis C. Balagtas.
the consolidated and parent company financial statements,
including the disclosures, and whether the consolidated and
parent company financial statements represent the underlying
SYCIP GORRES VELAYO & CO.
transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
the Group to express an opinion on the consolidated financial Ray Francis C. Balagtas
statements. We are responsible for the direction, supervision Partner
and performance of the audit. We remain solely responsible for CPA Certificate No. 108795
our audit opinion. SEC Accreditation No. 1510-AR-1 (Group A),
September 18, 2019, valid until September 17, 2021
We communicate with those charged with governance regarding, Tax Identification No. 216-950-288
among other matters, the planned scope and timing of the audit and BIR Accreditation No. 08-001998-107-2018,
significant audit findings, including any significant deficiencies in February 14, 2018, valid until February 13, 2021
internal control that we identify during our audit. PTR No. 8125208, January 7, 2020, Makati City

We also provide those charged with governance with a statement February 26, 2020
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance,

we determine those matters that were of most significance in the
audit of the consolidated and parent company financial statements
of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.

Report on the Supplementary Information Required Under Bangko

Sentral ng Pilipinas (BSP) Circular No. 1074 and Revenue Regulations
152010

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 97
 Management’s Discussion on Result
of Operations and Financial Condition
Result of Operations Financial Condition

China Bank achieved new record highs in 2019 as consolidated The Bank’s total assets grew by 11.1% to P962.2 billion from
net income rose 24.1% year-on-year to P10.1 billion, driven by P866.1 billion mainly from the build-up in loans and liquid
the robust growth of its core businesses. This translated to a assets.
return on equity of 11.04%, and a return on assets of 1.10%.
Investment securities amounted to P212.8 billion, up
Net interest income jumped 13.6% or P3.1 billion to 11.9% and comprised 22.1% of total assets. The build-up
P26.1 billion resulting in consolidated net interest margin of in securities volume raised the portfolio of financial assets
3.39%. at fair value through profit & loss (FVPL) by P10.9 billion
to P18.5 billion and financial assets at fair value through
Fee-based income surged 49.0% to P8.4 billion mainly driven other comprehensive income (FVOCI) by P16.0 billion to
by improvements in service charges, fees, and commissions, P26.1 billion. The Bank’s liquidity ratio stood at 37%, slightly
as well as trading and securities gain. Service charges, fees, lower than last year’s 38%.
and commissions increased by 18.7% to P3.3 billion from
the upswing in commissions and transactional fee income. Gross loan portfolio was at P577.8 billion, 12.7% higher
Trading opportunities boosted the Bank’s profitability as year-on-year, while net loans stood at P568.9 billion, up
trading and securities gain and gain on disposal of investment P63.1 billion or 12.5% as the demand across market segments
securities at amortized cost amounted to P884.5 million and steadily increased. Consumer loans, which accounted for
P1.4 billion, respectively. The lower sales volume of foreclosed almost a fifth of the Bank’s total loan portfolio, grew 22.6% to
assets resulted in a 14.9% drop in gain on sale of investment P106.9 billion. Asset quality remained healthy amid the loans
properties to P864.4 million and 81.2% decrease in gain on year-on-year expansion in loans, with gross NPL ratio at 1.5%
asset foreclosure and dacion transactions to P47.5 million. and NPL cover at 129%; the Parent Bank was at 190% as of
Trust fee income increased by P51.3 million or 16.8% to reach end-2019.
P357.1 million with the steady growth in trust assets under
management. Miscellaneous income decreased by 5.4% to On the liabilities side, total deposits jumped 7.4% to
P1.2 billion with the booking of one-off gains last year. P775.4 billion, of which CASA (demand and savings deposits)
totaled P411.8 billion. The Bank’s successful fund raising via
Meanwhile, the continued investment in human resources the issuance of P30 billion Peso retail bonds and US$150
and upgrade of systems, processes, and infrastructure million IFC green bonds also helped improved it’s funding
resulted in the 12.6% increase in operating expenses flexibility in 2019.
(excluding provision for impairment and credit losses) to
P20.3 billion. Nevertheless, the significant year-on-year Total capital reached to P96.2 billion, 9.5% higher than
increase in operating income improved cost-to-income ratio last year‘s P87.9 billion. The Bank‘s Common Equity Tier 1
to 59% from last year’s 63%. The material components (CET 1) and total CAR were computed at 12.76% and 13.67%,
of operating expenses include compensation and fringe respectively.
benefits which accounted for 33% of total expenses, taxes
& licenses at 19%, miscellaneous expenses at 11%, and
depreciation & amortization at 10%. Provision for impairment
and credit losses was higher at P2.6 billion from the growth in
loan portfolio and changes affecting the inputs to the Bank’s
expected credit loss calculation models.

For 2019, China Bank paid cash dividends of P0.88 per share
or a total of P2.4 billion, which represented a total payout of
29% of prior year’s net income.

98 C H I N A B A N K I N G C O R P O R AT I O N
Balance Sheets
(Amounts in Thousands)

Consolidated Parent Company

December 31
2019 2018 2019 2018
ASSETS
Cash and Other Cash Items P16,839,755 P15,639,474 P14,856,844 P13,705,304
Due from Bangko Sentral ng Pilipinas (Notes 7 and 17) 100,174,398 101,889,773 88,109,650 95,092,944
Due from Other Banks (Note 7) 9,900,642 9,455,447 8,645,547 7,837,894
Interbank Loans Receivable and Securities Purchased under Resale
Agreements (Note 8) 17,036,460 11,998,040 10,027,609 8,998,040
Financial Assets at Fair Value through Profit or Loss (Note 9) 18,500,111 7,596,261 18,444,101 6,689,796
Financial Assets at Fair Value through Other Comprehensive Income (Note 9) 26,133,360 10,101,527 24,170,629 8,213,010
Investment Securities at Amortized Cost (Note 9) 168,202,728 172,537,036 164,231,583 163,824,466
Loans and Receivables (Notes 10 and 29) 568,919,164 505,804,955 502,930,197 441,432,156
Accrued Interest Receivable 7,158,494 5,697,181 6,526,475 5,126,127
Investment in Subsidiaries (Notes 11 and 30) – – 15,129,118 14,333,567
Investment in Associates (Note 11) 704,169 335,092 704,169 335,092
Bank Premises, Furniture, Fixtures and
Equipment and Right-of-use Assets (Note 12) 9,155,234 6,450,458 7,468,646 5,265,386
Investment Properties (Note 13) 4,337,184 4,789,602 1,496,987 1,188,797
Deferred Tax Assets (Note 28) 3,370,949 2,514,889 2,287,956 1,739,219
Intangible Assets (Note 14) 4,066,078 4,202,599 945,916 915,531
Goodwill (Note 14) 839,748 839,748 222,841 222,841
Other Assets (Note 15) 6,887,505 6,219,558 3,982,129 3,332,763
P962,225,979 P866,071,640 P870,180,397 P778,252,933

LIABILITIES AND EQUITY

Liabilities
Deposit Liabilities (Notes 17 and 30)
Demand P186,955,056 P161,239,669 P170,279,879 P145,559,564
Savings 224,872,421 239,539,817 210,191,063 226,943,962
Time 363,600,383 321,343,811 307,293,511 265,739,836
775,427,860 722,123,297 687,764,453 638,243,362
Bills Payable (Note 19) 33,381,406 39,826,532 33,381,406 39,826,532
Manager’s Checks 1,998,678 2,577,175 1,535,936 2,069,812
Income Tax Payable 540,662 477,585 479,923 414,233
Accrued Interest and Other Expenses (Note 20) 4,121,302 3,842,525 3,650,339 3,342,152
Bonds Payable (Note 18) 37,394,398 – 37,394,398 –
Derivative Liabilities (Note 26) 1,036,052 455,150 1,036,052 455,150
Derivative Contracts Designated as Hedges (Note 26) 51,949 – 51,949 –
Deferred Tax Liabilities (Note 28) 1,083,378 1,231,145 – –
Other Liabilities (Notes 21 and 24) 11,014,701 7,681,644 8,722,696 6,049,812
866,050,386 778,215,053 774,017,153 690,401,053
Equity
Equity Attributable to Equity Holders of the Parent Company
Capital stock (Note 24) 26,858,998 26,858,998 26,858,998 26,858,998
Capital paid in excess of par value (Note 24) 17,122,625 17,122,625 17,122,626 17,122,625
Surplus reserves (Notes 24 and 29) 3,598,274 4,031,008 3,598,275 4,031,008
Surplus (Notes 24 and 29) 48,558,760 40,497,256 48,558,760 40,497,256
Net unrealized gain (loss) on financial assets at fair value through other
comprehensive income (Note 9) 417,576 (702,509) 417,576 (702,509)
Remeasurement gain (loss) on defined benefit asset (Note 25) (368,531) 117,047 (368,531) 117,047
Cumulative translation adjustment 6,835 (91,699) 6,835 (91,699)
Remeasurement gain on life insurance reserves 20,655 19,154 20,655 19,154
Cash flow hedge reserve (51,949) – (51,949) –
96,163,243 87,851,880 96,163,244 87,851,880
Non-controlling Interest 12,350 4,707 –
96,175,593 87,856,587 96,163,244 87,851,880
P962,225,979 P866,071,640 P870,180,397 P778,252,933

See accompanying Notes to Financial Statements.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 99
 Statements of Income
(Amounts in Thousands)

Consolidated Parent Company

Years Ended December 31
2019 2018 2017 2019 2018 2017
INTEREST INCOME
Loans and receivables (Notes 10 and 30) P36,051,051 P28,195,915 P21,751,647 P30,824,138 P23,488,872 P17,537,017
Investment securities at amortized costs and at
FVOCI (Note 9) 9,828,076 5,875,928 3,556,110 9,362,427 5,559,557 3,275,025
Financial assets at FVPL 692,482 413,323 410,889 692,482 413,323 398,777
Due from Bangko Sentral ng Pilipinas and
other banks and securities purchased under
resale agreements (Notes 7 and 8) 1,113,206 727,337 820,699 702,422 516,645 634,906
47,684,814 35,212,503 26,539,345 41,581,468 29,978,397 21,845,725
INTEREST EXPENSE
Deposit liabilities (Notes 17 and 29) 18,567,168 11,621,063 6,521,935 15,915,107 9,736,014 5,210,803
Bonds payable, bills payable and other borrowings
(Note 18 and 19) 2,802,104 665,254 391,007 2,800,843 665,254 391,007
Lease payable (Note 21) 264,246 – – 207,744 – –
21,633,519 12,286,317 6,912,942 18,923,694 10,401,268 5,601,810
NET INTEREST INCOME 26,051,295 22,926,186 19,626,403 22,657,774 19,577,428 16,243,915
Service charges, fees and commissions (Note 22) 3,296,673 2,777,283 2,441,724 1,624,703 1,529,727 1,394,998
Gain on disposal of investment securities at
amortized cost (Note 9) 1,381,871 – – 1,299,360 – –
Trading and securities gain (loss) - net
(Notes 9 and 22) 884,482 (271,552) 479,960 837,875 (275,964) 399,760
Gain on sale of investment properties 864,383 1,015,622 670,612 721,893 925,831 614,587
Trust fee income (Note 29) 357,080 305,753 376,312 357,080 305,338 371,947
Foreign exchange gain - net (Note 26) 221,104 215,963 386,015 243,764 187,064 389,692
Share in net income of an associate (Note 11) 184,661 101,009 73,133 184,661 101,009 73,133
Gain on asset foreclosure and dacion transactions
(Note 13) 47,479 252,477 157,415 81,294 57,676 71,888
Share in net income of subsidiaries (Note 11) – – – 770,628 695,356 836,004
Miscellaneous (Notes 22 and 30) 1,193,056 1,261,741 1,516,523 1,062,795 1,130,134 1,391,657
TOTAL OPERATING INCOME 34,482,085 28,584,482 25,728,097 29,841,828 24,233,599 21,787,581
Compensation and fringe benefits (Notes 25 and 30) 6,622,664 6,139,001 5,708,948 5,029,191 4,610,265 4,288,096
Taxes and licenses 3,884,183 2,925,870 2,264,025 3,155,849 2,307,948 1,819,331
Provision for impairment and credit losses (Note 16) 2,570,168 141,076 754,171 2,205,062 (1,957) 423,922
Depreciation and amortization (Notes 12, 13 and 14) 1,942,660 1,297,685 1,217,489 1,463,092 947,908 877,240
Insurance 1,875,977 1,669,618 1,440,153 1,624,065 1,447,890 1,241,575
Occupancy cost (Notes 27 and 30) 1,801,154 2,336,639 2,112,602 1,308,482 1,713,888 1,528,876
Transportation and traveling 566,572 484,514 378,703 432,157 370,980 289,903
Entertainment, amusement and recreation 477,761 380,166 287,105 342,034 262,489 182,172
Professional fees, marketing and other related
services 412,146 352,159 312,042 329,959 261,931 222,509
Stationery, supplies and postage 258,425 284,436 268,901 194,990 220,651 197,567
Repairs and maintenance 159,814 131,158 104,298 120,242 102,834 69,276
Miscellaneous (Notes 22 and 30) 2,322,938 2,054,634 1,867,552 1,890,022 1,619,159 1,490,658
TOTAL OPERATING EXPENSES 22,894,462 18,196,956 16,715,989 18,095,147 13,863,986 12,631,125
INCOME BEFORE INCOME TAX 11,587,621 10,387,526 9,012,108 11,746,680 10,369,613 9,156,456
PROVISION FOR INCOME TAX (Note 28) 1,512,650 2,271,422 1,489,177 1,677,720 2,259,233 1,642,484
NET INCOME P10,074,972 P8,116,104 P7,522,931 P10,068,960 P8,110,380 P7,513,972
Attributable to:
Equity holders of the Parent Company (Note 33) P10,068,960 P8,110,379 P7,513,972
Non-controlling interest 6,012 5,725 8,959
P10,074,972 P8,116,104 P7,522,931
Basic/Diluted Earnings Per Share (Note 32) 3.75 3.02 2.91

100 C H I N A B A N K I N G C O R P O R AT I O N
Statements of Comprehensive Income
(Amounts in Thousands)

Consolidated Parent Company

Years Ended December 31
2019 2018 2017 2019 2018 2017

NET INCOME P10,074,972 P8,116,104 P7,522,931 P10,068,960 P8,110,380 P7,513,972

OTHER COMPREHENSIVE INCOME (LOSS)

Items that recycle to profit or loss in subsequent
periods:
Changes in fair value of:
Financial assets at fair value through other
comprehensive income:
Fair value gain (loss) for the year, net of tax 1,163,009 (451,866) – 940,851 (381,791) –
Loss (gain) taken to profit or loss (Note 22) (269,478) 2,104 – (240,310) 2,451 –
Available-for-sale financial assets:
Fair value gain for the year, net of tax – – 158,946 – – 113,020
Gains taken to profit or loss (Note 22) – – (365,145) – – (342,146)
Share in changes in other comprehensive income of
an associate (Note 11) 152,452 (126,713) (8,049) 152,452 (126,713) (8,049)
Share in changes in other comprehensive income of
subsidiaries (Note 11) – – 207,510 (64,109) 35,552
Cumulative translation adjustment 98,830 (52,900) (15,972) 81,518 (58,792) (29,255)
Loss on cash flow hedges (51,949) – – (51,949) – –
Items that do not recycle to profit or loss in
subsequent periods:
Share in changes in other comprehensive income of
subsidiaries (Note 11) – – – (56,353) 88,642 20,140
Share in changes in other comprehensive income of
associate (Note 11) 4,486 31,374 (12,221) 4,486 31,374 (12,221)
Remeasurement gain (loss) on defined benefit asset,
net of tax (Note 25) (489,722) (165,213) 30,149 (432,210) (255,359) 9,678

OTHER COMPREHENSIVE INCOME (LOSS) FOR THE

YEAR, NET OF TAX 607,627 (763,214) (212,292) 605,996 (764,297) (213,281)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR P10,682,599 P7,352,890 P7,310,639 P10,674,956 P7,346,083 P7,300,691
Total comprehensive income attributable to:
Equity holders of the Parent Company P10,674,956 P7,346,083 P7,300,691
Non-controlling interest 7,643 6,807 9,948
P10,682,599 P7,352,890 P7,310,639

See accompanying Notes to Financial Statements.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 101
 Statements of Changes in Equity
(Amounts in Thousands)

Net Unrealized
(Losses) on
Financial
Assets at Fair
Capital Paid Value through
in Excess of Surplus Other
Capital Stock Par Value Reserves Surplus Comprehensive
(Note 23) (Note 23) (Notes 23 and 28) (Notes 23 and 28) Income (Note 9)
Balance at January 1, 2019 P26,858,998 P17,122,626 P4,031,008 P40,497,256 (P702,509)
Total comprehensive income (loss) for the year – – – 10,068,960 1,043,488
Transfer from surplus to surplus reserves – – 35,708 (35,708) –
Appropriation of retained earnings (Note 16) – – (468,442) 468,442 –
Realized loss on sale of equity securities at FVOCI – – – (76,597) 76,597
Cash dividends - P0.88 per share – – – (2,363,592) –
Balance at December 31, 2019 P26,858,998 P17,122,626 P3,598,275 P48,558,760 P417,576
Balance at January 1, 2018 P26,847,717 P17,096,228 P926,689 P40,360,563 P–
Effect of initial application of PFRS 9 (Note 2) – – 2,732,628 (5,372,699) (126,556)
Balance at January 1, 2018, as restated 26,847,717 P17,096,228 3,659,317 34,987,864 (126,556)
Total comprehensive income (loss) for the year – – – 8,110,379 (575,953)
Transfer from surplus to surplus reserves – – 371,691 (371,691) –
Issuance of common shares (P31.00 per share) 11,281 26,397 – – –
Transaction cost on the issuance of common – (52,089) – – –
Cash dividends - P0.83 per share – – (2,229,297) –
Balance at December 31, 2018 P26,858,998 P17,122,626 P4,031,008 P40,497,256 (P702,509)
Balance at January 1, 2017 P20,020,278 – P861,630 P36,889,099 –
Transfer from surplus to surplus reserves – – 65,059 (65,059) –
Total comprehensive income (loss) for the year – – – 7,513,972 –
Issuance of common shares (P31.00 per share) 4,838,710 10,160,753 – – –
Transaction cost on the issuance of common shares – (52,089) – – –
Stock dividends - 8.00% 1,988,729 – – (1,988,729) –
Cash dividends - P0.80 per share – – – (1,988,720) –
Balance at December 31, 2017 P26,847,717 P17,096,228 P926,689 P40,360,563 –

See accompanying Notes to Financial Statements.

102 C H I N A B A N K I N G C O R P O R AT I O N
 Consolidated
Equity Attributable to Equity Holders of the Parent Company

Net Unrealized
Gains (Losses) Remeasurement
on Gain on Defined Remeasurement Non-
Available-for-Sale Benefit Asset Cumulative Loss on Cash Flow Controlling
Financial Assets or Liability Translation Life Insurance Hedge Interest
(Note 9) (Note 24) Adjustment Reserve Reserve Total Equity (Note 11) Total Equity
P– P117,047 (P91,699) P19,154 P– P87,851,880 P4,707 P87,856,587
– (485,578) 98,534 1,501 (51,949) 10,674,956 7,643 10,682,599
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – (2,363,592) – (2,363,592)
P– (P368,531) P6,835 P20,655 (P51,949) P96,163,244 P12,351 P96,175,595
(P1,813,280) P283,763 (P38,698) (P12,221) – P 83,650,761 P4,736 P83,655,497
1,813,280 – – – – (953,346) (6,835) (960,181)
– 283,763 (38,698) (12,221) – 82,697,415 (2,099) 82,695,316
– (166,716) (53,001) 31,375 – 7,346,084 6,806 7,352,890
– – – – – – – –
– – – – – 37,678 – 37,678
– – – – – (52,089) – (52,089)
– – – – – (2,229,297) – (2,229,297)
P– P117,047 (P91,699) P19,154 – P87,851,880 P4,707 P87,856,587
(P1,598,600) P253,945 (P22,500) P– – P63,391,416 (P5,212) P63,386,204
– – – – – – – –
(214,680) 29,818 (16,198) (12,221) – 7,300,691 9,948 7,310,639
– – – – – 14,999,463 – 14,999,463
– – – – – (52,089) – (52,089)
– – – – – – – –
– – – – – (1,988,720) – (1,988,720)
(P1,813,280) P283,763 (P38,698) (P12,221) – P83,650,761 P4,736 P83,655,497

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 103
 Statements of Changes in Equity
(Amounts in Thousands)

Parent Company

Capital Paid in
Excess of Surplus
Capital Stock Par Value Reserves Surplus
(Note 23) (Note 23) (Notes 23 and 28) (Notes 23 and 28)
Balance at January 1, 2019 P26,858,998 P17,122,626 P4,031,008 P40,497,256
Total comprehensive income (loss) for the year – – – 10,068,960
Transfer from surplus to surplus reserves – – 35,708 (35,708)
Appropriation of retained earnings (Note 16) – – (468,442) 468,442
Realized loss on sale of equity securities at FVOCI – – – (76,597)
Cash dividends - P0.88 per share – – – (2,363,592)
Balance at December 31, 2019 P26,858,998 P17,122,626 P3,598,275 P48,558,760
Balance at January 1, 2018 P26,847,717 P17,096,228 P926,689 P40,360,563
Effect of initial application of PFRS 9 (Note 2) – – 2,732,628 (5,372,699)
Balance at January 1, 2019, as restated P26,847,717 17,096,228 3,659,317 34,987,864
Total comprehensive income (loss) for the year – – – 8,110,379
Transfer from surplus to surplus reserves – – 371,691 (371,691)
Issuance of common shares (P31.00 per share) 11,281 26,397 – –
Cash dividends - P0.83 per share – – – (2,229,297)
Balance at December 31, 2018 P26,858,998 P17,122,626 P4,031,008 P40,497,256
Balance at January 1, 2017 P20,020,278 6,987,564 P861,630 P36,889,099
Transfer from surplus to surplus reserves – – 65,059 (65,059)
Total comprehensive income (loss) for the year – – – 7,513,972
Issuance of common shares (P31.00 per share) 4,838,710 10,160,753 – –
Transaction cost on the issuance of common shares – (52,089) – –
Stock dividends - 8.00% 1,988,729 – – (1,988,729)
Cash dividends - P0.80 per share – – – (1,988,720)
Balance at December 31, 2017 P26,847,717 P17,096,228 P926,689 P40,360,563

See accompanying Notes to Financial Statements.

104 C H I N A B A N K I N G C O R P O R AT I O N
 Net Unrealized
(Losses) on
Financial Net Unrealized
Assets at Fair Gains Remeasurement
Value through (Losses) on Gain on Defined
Other Available-for- Benefit Asset or Cumulative Remesasurement
Comprehensive Sale Financial Liability Translation Loss on Life Cash Flow
Income (Note 9) Assets (Note 9) (Note 24) Adjustment Insurance Reserve Hedge Reserve Total Equity
(P702,510) P– P117,047 (P91,699) P19,153 P– P87,851,880
1,043,488 – (485,578) 98,534 1,501 (51,949) 10,674,956
– – – – – – –
– – – – – – –
76,597 – – – – – –
– – – – – – (2,363,592)
P417,576 P– (P368,531) P6,835 P20,655 (P51,949) P96,163,244
P– (P1,813,280) P283,763 (P38,698) (P12,221) – P83,650,761
(126,556) 1,813,280 – – – (953,346)
(126,556) – P283,763 (P38,698) (P12,221) – 82,697,417
(575,954) – (166,716) (53,001) 31,374 – 7,346,081
– – – – – –
– – – – – – 37,678
– – – – – – (2,229,297)
(P702,510) – P117,047 (P91,699) P19,153 P– P87,851,880
– (P1,598,600) P253,945 (P22,500) P– P– P63,391,416
– – – – – – –
– (214,680) 29,818 (16,198) (12,221) – 7,300,691
– – – – – – 14,999,463
– – – – – – (52,089)
– – – – – – –
– – – – – – (1,988,720)
– (P1,813,280) P283,763 (P38,698) (P12,221) P– P83,650,761

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 105
 Statements of Cash Flows
(Amounts in Thousands)

Consolidated Parent Company

Years Ended December 31
2019 2018 2017 2019 2018 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax P11,587,621 P10,387,526 P9,012,108 P11,746,680 P10,369,613 P9,156,456
Adjustments for:
Depreciation and amortization (Notes 12, 13 and 14) 1,942,661 1,297,685 1,217,489 1,463,092 947,908 877,240
Provision for impairment and credit losses (Note 16) 2,570,168 141,076 754,171 2,205,062 (1,957) 423,922
Amortization of transaction costs on bonds payable 200,852 – – 200,852 – –
Securities gain on financial assets at fair value
through other comprehensive income and
investment securities at amortized cost
(Note 21) (1,651,349) (9,624) – (1,539,670) (9,277) –
Trading and securities gain on available-for-sale and
held-to-maturity financial assets (Note 21) – – (365,145) – – (342,146)
Gain on sale of investment properties (864,383) (1,015,622) (670,612) (721,893) (925,831) (614,587)
Gain on asset foreclosure and dacion transactions
(Note 13) (47,479) (252,477) (157,415) (81,294) (57,676) (71,888)
Share in net losses (income) of an associate
(Notes 2 and 11) (184,661) (101,009) (73,133) (184,661) (101,009) (73,133)
Share in net (income) of subsidiaries
(Notes 2 and 11) – – – (770,628) (695,356) (836,004)
Changes in operating assets and liabilities:
Decrease (increase) in the amounts of:
Financial assets at FVPL (10,322,948) 8,830,244 (8,510,654) (14,085,388) 9,554,643 (8,799,606)
_Loans and receivables (64,140,453) (60,828,559) (63,393,487) (64,112,157) (57,994,624) (57,873,074)
_Other assets (3,844,834) (1,263,617) 6,159 (2,708,132) (2,544,975) 275,322
Increase (decrease) in the amounts of:
_Deposit liabilities 53,304,563 87,029,904 93,510,375 49,521,091 79,007,383 88,273,987
_Manager’s checks (578,497) 136,133 411,264 (533,876) 360,564 263,663
Accrued interest and other expenses 278,777 1,214,906 759,429 308,187 1,058,204 722,597
_Other liabilities 433,649 1,960,943 177,618 3,262,497 2,393,869 (540,630)
Net cash generated from operations (11,316,313) 47,527,509 32,678,167 (16,030,238) 41,361,482 30,842,119
Income taxes paid (2,143,644) (1,732,819) (1,554,045) (1,840,519) (1,511,638) (1,274,667)
Net cash provided by operating activities (13,459,957) 45,794,690 31,124,122 (17,870,757) 39,849,844 29,567,452
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of/Additions to:
Bank premises, furniture, fixtures and equipment
(Note 12) (873,688) (1,058,002) (1,752,173) (709,808) (825,096) (1,387,684)
Equity investments (Note 11) (40,000) – – (40,363) (500,000) (500,000)

Investment securities at amortized cost (24,382,774) (172,348,552) – (23,616,210) (167,337,112) –

Financial assets at fair value through other
comprehensive income (27,081,539) (44,399,340) – (27,081,539) (44,477,104) –
Held-to-maturity financial assets – – (23,618,560) – – (23,599,743)
Available-for-sale financial assets – – (54,304,672) – – (53,171,027)
Proceeds from sale of:
Investment securities at amortized cost 18,616,553 – – 13,324,227 – –
Financial assets at fair value through other
comprehensive income 10,972,736 80,729,853 – 12,141,368 –
Available-for-sale financial assets – – 41,891,950 – – 41,500,714
Investment properties 2,074,400 1,810,112 1,335,946 802,118 1,458,379 846,974
Bank premises, furniture, fixtures and equipment 62,943 258,136 275,109 26,990 51,642 242,202
Proceeds from maturity of:
Investment securities at amortized cost 11,482,400 65,109,637 – 11,184,226 65,060,529 –
Held-to-maturity financial assets – – 15,737,093 – – 16,135,271
Cash dividends from a subsidiary (Note 11) – 50,000 – 50,000 50,000 –
Net cash used in investing activities (9,168,969) (69,898,150) (20,435,307) (13,918,991) (66,023,900) (19,933,293)
(Forward)

106 C H I N A B A N K I N G C O R P O R AT I O N
 Consolidated Parent Company
Years Ended December 31
2019 2018 2017 2019 2018 2017
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bills payable P180,468,980 P184,568,424 P252,268,556 P180,468,980 P184,568,424 P252,268,556
Settlement of bills payable (186,914,106) (164,859,923) (249,105,524) (186,914,106) (164,859,923) (249,105,524)
Proceeds from issuance of bonds payable 37,193,546 – – 37,193,546 – –
Payments of cash dividends (Note 23) (2,363,592) (2,229,297) (1,988,720) (2,363,592) (2,229,297) (1,988,720)
Proceeds from issuance of common shares (Note 23) – 37,678 14,999,463 – 37,678 14,999,463
Transaction cost on the issuance of common shares
(Note 23) – – (52,089) – – (52,089)
Payments of principal portion lease liabilities (787,381) – – (589,613) – –
Net cash provided by (used in) financing activities 27,597,447 17,516,882 16,121,687 27,795,215 17,516,882 16,121,687
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 4,968,521 (6,586,585) 26,810,502 (3,994,533) (8,657,174) 25,755,846
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR
Cash and other cash items 15,639,474 12,685,984 12,010,543 13,705,304 11,160,173 10,580,748
Due from Bangko Sentral ng Pilipinas (Note 7) 101,889,773 98,490,014 91,964,495 95,092,944 91,717,037 85,307,128
Due from other banks (Note 7) 9,455,447 15,641,476 11,332,236 7,837,894 14,066,620 9,689,165
Interbank Loans Receivable and SPURA (Note 8) 11,998,040 18,751,845 3,451,543 8,998,040 17,347,522 2,958,465
138,982,734 145,569,319 118,758,817 125,634,182 134,291,352 108,535,506
CASH AND CASH EQUIVALENTS AT END OF YEAR
Cash and other cash items 16,839,755 15,639,474 12,685,984 14,856,844 13,705,304 11,160,173
Due from Bangko Sentral ng Pilipinas (Note 7) 100,174,398 101,889,773 98,490,014 88,109,650 95,092,944 91,717,037
Due from other banks (Note 7) 9,900,642 9,455,447 15,641,476 8,645,547 7,837,894 14,066,620
Securities purchased under resale agreements (Note 8) 17,036,460 11,998,040 18,751,845 10,027,609 8,998,040 17,347,522
P143,951,255 P138,982,734 P145,569,319 P121,639,650 P125,634,182 P134,291,352

OPERATING CASH FLOWS FROM INTEREST

Interest paid P20,557,295 P11,361,726 P6,652,755 P17,928,838 P9,595,463 P5,359,209
Interest received 46,223,502 33,233,827 25,835,369 40,181,121 28,041,653 21,322,995

See accompanying Notes to Financial Statements.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 107
2019 Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS

1. CORPORATE INFORMATION

China Banking Corporation (the Parent Company) is a publicly listed universal bank incorporated in the Philippines. The Parent Company
acquired its universal banking license in 1991. It provides expanded commercial banking products and services such as deposit products,
loans and trade finance, domestic and foreign fund transfers, treasury products, trust products, foreign exchange, corporate finance and
other investment banking services through a network of 473 and 458 local branches as of December 31, 2019 and 2018, respectively.

The Parent Company acquired its original Certification of Incorporation issued by the Securities and Exchange Commission (SEC) on
July 20, 1920. On December 4, 1963, the Board of Directors (BOD) of the Parent Company approved the Amended Articles of Incorporation
to extend the corporate term of the Parent Company for another 50 years or until July 20, 2020, which was confirmed by the stockholders
on December 23, 1963, and approved by the SEC on October 5, 1964. On March 2, 2016, the BOD approved the amendment of the
Third Article of the Parent Company’s Articles of Incorporation, to further extend the corporate term for another 50 years from and after
July 20, 2020, the expiry date of its extended term. The approval was ratified by the stockholders during their scheduled annual meeting
on May 5, 2016. On November 7, 2016, the SEC issued the Certificate of Filing of Amended Articles of Incorporation, amending the Third
Article thereof to extend the term of corporate existence of the Parent Company.

The Parent Company has the following subsidiaries:

Effective Percentages of
Ownership Country of
Subsidiary 2019 2018 Incorporation Principal Activities
Chinabank Insurance Brokers, Inc. (CIBI)
100.00% 100.00% Philippines Insurance brokerage

CBC Properties and Computer Center, Inc. (CBC-PCCI) 100.00% 100.00% Philippines Computer services
China Bank Savings, Inc. (CBSI) 98.29% 98.29% Philippines Retail and consumer banking
China Bank Capital Corporation (CBCC) 100.00% 100.00% Philippines Investment house
CBC Assets One (SPC) Inc. 100.00% 100.00% Philippines Special purpose corporation
China Bank Securities Corporation (CBCSec) 100.00% 100.00% Philippines Stock brokerage

The Parent Company has no ultimate parent company. SM Investments Corporation, its significant investor, has effective ownership in the
Parent Company of 22.55%and 20.30% as of December 31, 2019 and 2018, respectively.

The Parent Company’s principal place of business is at 8745 Paseo de Roxas cor. Villar St., Makati City.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation
The accompanying consolidated financial statements include the financial statements of the Parent Company and its subsidiaries (collectively
referred to as “the Group”).

The accompanying financial statements have been prepared on a historical cost basis except for financial instruments at fair value through
profit or loss (FVTPL) and financial assets at fair value through other comprehensive income (FVOCI). The financial statements are presented
in Philippine peso, and all values are rounded to the nearest thousand except when otherwise indicated.

The financial statements of the Parent Company reflect the accounts maintained in the Regular Banking Unit (RBU) and Foreign Currency
Deposit Unit (FCDU). The financial statements of these units are combined after eliminating inter-unit accounts.

Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured
using that functional currency. The functional currency of the Parent Company’s subsidiaries is the Philippine peso.

Statement of Compliance
The financial statements of the Group and the Parent Company have been prepared in compliance with Philippine Financial Reporting
Standards (PFRS).

Presentation of Financial Statements

The balance sheets of the Group and of the Parent Company are presented in order of liquidity. An analysis regarding recovery of assets or
settlement of liabilities within 12 months after the reporting date (current) and more than 12 months after the reporting date (non-current) is
presented in Note 23.

1
 Financial assets and financial liabilities are offset and the net amount reported in the balance sheets only when there is a legally enforceable
right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liability
simultaneously. The Group and the Parent Company assess that they have currently enforceable right of offset if the right is not contingent
on a future event, and is legally enforceable in the normal course of business, event of default, and event of insolvency or bankruptcy of the
Group, the Parent Company and all of the counterparties.

Income and expenses are not offset in the statement of income unless required or permitted by any accounting standard or interpretation,
and as specifically disclosed in the accounting policies of the Group and the Parent Company.

Basis of Consolidation and Investments in Subsidiaries

The consolidated financial statements of the Group are prepared for the same reporting year as the Parent Company, using consistent
accounting policies. All significant intra-group balances, transactions and income and expenses resulting from intra-group transactions are
eliminated in full.

Subsidiaries are consolidated from the date on which control is transferred to the Parent Company.
The Group controls an investee if and only if the Group has:

• power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee);
• exposure, or rights, to variable returns from its involvement with the investee, and
• the ability to use its power over the investee to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances
in assessing whether it has power over an investee, including:

• the contractual arrangement with the other vote holders of the investee
• rights arising from other contractual arrangements
• the Group’s voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of
the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when
the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year
are included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the
subsidiary. Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the Group and
to the non-controlling interests. When necessary, adjustments are made to the financial statements of the subsidiary to bring its accounting
policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating
to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses
control over a subsidiary, it:

• Derecognizes the assets (including goodwill) and liabilities of the subsidiary

• Derecognizes the carrying amount of any non-controlling interest
• Derecognizes the related OCI recorded in equity and recycle the same to profit or loss or surplus
• Recognizes the fair value of the consideration received
• Recognizes the fair value of any investment retained
• Recognizes the remaining difference in profit or loss
• Reclassifies the parent’s share of components previously recognized in OCI to profit or loss or retained earnings, as appropriate, as
would be recognized if the Group had directly disposed of the related assets or liabilities

Non-Controlling Interest
Non-controlling interest represents the portion of profit or loss and net assets not owned, directly or indirectly, by the Parent Company.

Non-controlling interest is presented separately in the consolidated statement of income, consolidated statement of comprehensive
income, and within equity in the consolidated balance sheet, separately from parent shareholders’ equity. Any losses applicable to the
non-controlling interest are allocated against the interests of the non-controlling interest even if this results in the non-controlling interest
having a deficit balance.

2 CHINA BANKING CO RPORATI ON

Changes in Accounting Policies and Disclosures

The accounting policies adopted are consistent with those of the previous financial year except for the following new, amendments and
improvements to PFRS, Philippine Accounting Standards (PAS) and Philippine Interpretation which became effective as of January 1, 2019.
Except as otherwise indicated, these changes in the accounting policies did not have any significant impact on the financial position or
performance of the Group:

• Amendments
• PFRS 9 (Amendment), Prepayment Features with Negative Compensation
• PAS 19 (Amendments), Employee Benefits, Plan Amendment, Curtailment or Settlement
• PAS 28 (Amendments), Long-term Interests in Associates and Joint Ventures

• Annual Improvements to PFRS 2015-2018 Cycle

• Amendments to PFRS 3, Business Combinations, and PFRS 11, Joint Arrangements, Previously Held Interest in a Joint Operation
• Amendments to PAS 12, Income Tax Consequences of Payments on Financial Instruments
• Amendments to PAS 23, Borrowing Costs, Borrowing Costs Eligible for Capitalization

• Interpretation
• IFRIC 23, Uncertainty over Income Tax Treatments
The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application
of PAS 12, Income Taxes. It does not apply to taxes or levies outside the scope of PAS 12, nor does it specifically include
requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses
the following:
• Whether an entity considers uncertain tax treatments separately
• The assumptions an entity makes about the examination of tax treatments by taxation authorities
• How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates
• How an entity considers changes in facts and circumstances

The entity is required to determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain
tax treatments and use the approach that better predicts the resolution of the uncertainty. The entity shall assume that the taxation authority
will examine amounts that it has a right to examine and have full knowledge of all related information when making those examinations. If
an entity concludes that it is not probable that the taxation authority will accept an uncertain tax treatment, it shall reflect the effect of the
uncertainty for each uncertain tax treatment using the method the entity expects to better predict the resolution of the uncertainty.

The Group applies significant judgment in assessing whether it has uncertain tax position over its income tax treatments. Based on
the assessment made, the Group determined that it has no uncertain tax position and the Interpretation did not have an impact on the
consolidated financial statement.

Standard that has been adopted and that is deemed to have significant impact on the financial statements or performance of the Group is
described below:

PFRS 16, Leases

PFRS 16 supersedes PAS 17, Leases, Philippine Interpretation IFRIC 4, Determining whether an Arrangement contains a Lease, Philippine
Interpretation SIC-15, Operating Leases-Incentives and Philippine Interpretation SIC-27, Evaluating the Substance of Transactions Involving
the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and
requires lessees to recognize most leases on the balance sheet.

Lessor accounting under PFRS 16 is substantially unchanged from the accounting under PAS 17. Lessors will continue to classify all leases
using the same classification principle as in PAS 17 and distinguish between two types of leases: operating and finance leases.

On January 1, 2019, the Group adopted PFRS 16 following the modified retrospective approach. Under the modified retrospective approach,
the Group did not restate prior-period comparative financial statements which remain to be reported under PAS 17. Therefore, some accounts
in the comparative financial statements are not comparable to the information presented for 2019. The Group elected to use the following
transition practical expedients:
• Non-recognition of lease liability and right-of-use asset for low-value leases and leases ending within 12 months of the date of initial
application; and
• Exclusion of initial direct costs from the measurement of the right-of-use asset at the date of initial application.

3
 As of January 1, 2019, the weighted average incremental borrowing rate applied to lease commitments ranges from 5% to 8.17% for the
Group and 7.38% for the Parent Company. The reconciliation of the operating lease commitments to the total gross lease payments used in
the measurement of the opening lease liabilities follows:

Consolidated Parent Company

Gross lease payments as of December 31, 2018 P4,724,577 P3,853,894
Gross lease payments pertaining to short-term or low-value leases (557,275) (543,366)
Total gross lease payments as of December 31, 2018 4,167,302 3,310,528
Weighted average incremental borrowing rate 5.00%-8.17% 7.38%
Lease liability as of January 1, 2019 P3,669,457 P2,915,844

The right-of-use assets are presented under bank premises, furniture, fixtures and equipment and the lease liabilities under other liabilities.

As a result of the adoption of PFRS 16, as at January 1, 2019:

a) total assets and total liabilities increased resulting from the recognition of right-of use assets and lease liability in the balance sheet
amounting to P3.67 billion for the Group and P2.92 billion for the Parent Company; and
b) accrued rent payable relating to previous operating leases was recorded as an adjustment to right-of-use assets amounting to
P238.18 million and P186.76 million for the Group and the Parent Company, respectively.

The adoption of PFRS 16 did not have an impact on equity on January 1, 2019, since the Group elected to measure the right-of-use assets
at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized
in the balance sheet immediately before the date of initial application

Significant Accounting Policies

Foreign Currency Translation

The consolidated financial statements are presented in Philippine peso, which is the Parent Company’s functional currency.

Transactions and balances

The books of accounts of the RBU are maintained in Philippine peso, the RBU’s functional currency, while those of the FCDU are maintained
in United States (US) dollars (USD), the FCDU’s functional currency. For financial reporting purposes, the foreign currency-denominated
monetary assets and liabilities in the RBU are translated in Philippine peso based on the Bankers Association of the Philippines (BAP) closing
rate (for 2019 and 2018) and the Philippine Dealing System (PDS) closing rate prevailing (for 2017) at end of the year, and foreign currency-
denominated income and expenses, at the exchange rates on transaction dates. Foreign exchange differences arising from restatements
of foreign currency-denominated assets and liabilities are credited to or charged against operations in the period in which the rates change.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the
dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at
the date when the fair value was determined.

FCDU
As at the reporting date, the assets and liabilities of the FCDU are translated into the Parent Company’s presentation currency (the Philippine
Peso) at the BAP closing rate (for 2019 and 2018) and the PDS closing rate prevailing (for 2017) at the reporting date, and its income and
expenses are translated at the BAP weighted average rate for 2019 and 2018 while in 2017, the basis was PDSWAR for the year. Exchange
differences arising on translation are taken directly to the statement of comprehensive income under ‘Cumulative translation adjustment’.
Upon actual remittance or transfer of the FCDU income to RBU, the related exchange difference arising from translation lodged under
‘Cumulative translation adjustment’ is recognized in the statement of income of the RBU books.

Fair Value Measurement

The Group measures financial instruments, such as financial instruments at FVPL and financial assets at FVOCI at fair value at each reporting
date. Also, fair values of financial instruments measured at amortized cost are disclosed in Note 5.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability
takes place either:

• in the principal market for the asset or liability, or

• in the absence of a principal market, in the most advantageous market for the asset or liability.

4 CHINA BANKING CO RPORATI ON

The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic
best interest.

If an asset or a liability measured at fair value has a bid price and an ask price, the price within the bid - ask spread that is most representative
of fair value in the circumstances shall be used to measure fair value regardless of where the input is categorized within the fair value hierarchy.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the
asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair
value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly
observable
• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have
occurred between Levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash and other cash items, due from BSP and other banks,
interbank loans receivables and securities purchased under resale agreement (SPURA) that are convertible to known amounts of cash which
have original maturities of three months or less from dates of placements and that are subject to an insignificant risk of changes in value. Due
from BSP includes the statutory reserves required by the BSP which the Group considers as cash equivalents wherein withdrawals can be
made to meet the Group’s cash requirements as allowed by the BSP.

SPURA
Securities purchased under agreements to resell at a specified future date (‘reverse repos’) are not recognized in the balance sheet. The
corresponding cash paid including accrued interest, is recognized in the balance sheet as SPURA. The difference between the purchase
price and resale price is treated as interest income and is accrued over the life of the agreement using the EIR method.

Financial Instruments - Initial Recognition

Date of recognition
Purchases or sales of financial assets, except for derivative instruments, that require delivery of assets within the time frame established by
regulation or convention in the marketplace are recognized on the settlement date. Settlement date accounting refers to (a) the recognition
of an asset on the day it is received by the Group, and (b) the derecognition of an asset and recognition of any gain or loss on disposal on
the day that such asset is delivered by the Group. Any change in fair value of a financial asset is recognized in the statement of income for
assets classified as financial assets at FVPL, and in equity for assets classified as financial assets at FVOCI. Derivatives are recognized on a
trade date basis. Deposits, amounts due to banks and customers loans and receivables are recognized when cash is received by the Group
or advanced to the borrowers.

Initial recognition of financial instruments

All financial instruments are initially recognized at fair value. Except for financial assets and financial liabilities at FVPL, the initial measurement
of financial instruments includes transaction costs.

‘Day 1’ difference
Where the transaction price in a non-active market is different with the fair value from other observable current market transactions in the
same instrument or based on a valuation technique whose variables include only data from observable market, the Group recognizes the
difference between the transaction price and fair value (a ‘Day 1’ difference) in the statement of income. In cases where the transaction
price used is made of data which is not observable, the difference between the transaction price and model value is only recognized in
the statement of income when the inputs become observable or when the instrument is derecognized. For each transaction, the Group
determines the appropriate method of recognizing the ‘Day 1’ difference amount.

5
 Classification and measurement
Under PFRS 9, the classification and measurement of financial assets is driven by the contractual cash flow characteristics of the financial
assets and the entity’s business model for managing the financial assets.

As part of its classification process, the Group assesses the contractual terms of financial assets to identify whether they meet the ‘solely
payments of principal and interest’ (SPPI) test. ‘Principal’ for the purpose of this test is defined as the fair value of the financial asset at initial
recognition and may change over the life of the financial asset (e.g., if there are repayments of principal or amortization of the premium or
discount).

The most significant elements of interest within a lending arrangement are typically the consideration for the time value of money and credit
risk. To make the SPPI assessment, the Bank applies judgement and considers relevant factors such as the currency in which the financial
asset is denominated, and the period for which the interest rate is set. In contrast, contractual terms that introduce a more than de minimis
exposure to risks or volatility in the contractual cash flows that are unrelated to a basic lending arrangement do not give rise to contractual
cash flows that are solely payments of principal and interest on the amount outstanding. In such cases, the financial asset is required to be
measured at FVTPL.

The Group determines its business model at the level that best reflects how it manages groups of financial assets to achieve its business
objective.

The Bank’s business model is not assessed on an instrument-by-instrument basis, but at a higher level of aggregated portfolios and is based
on observable factors such as:
• how the performance of the business model and the financial assets held within that business model are evaluated and reported to the
entity’s key management personnel
• the risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular,
the way those risks are managed
• how managers of the business are compensated (for example, whether the compensation is based on the fair value of the assets
managed or on the contractual cash flows collected)
• the expected frequency, value and timing of sales are also important aspects of the Group’s assessment

The business model assessment is based on reasonably expected scenarios without taking ‘worst case’ or ‘stress case’ scenarios into
account. If cash flows after initial recognition are realized in a way that is different from the Group’s original expectations, the Group does not
change the classification of the remaining financial assets held in that business model, but incorporates such information when assessing
newly originated or newly purchased financial assets going forward.

The Group’s measurement categories are described below:

Financial assets at Amortized Cost

Financial assets are measured at amortized cost if both of the following conditions are met:
• the asset is held within the Group’s business model whose objective is to hold financial assets in order to collect contractual cash flows;
and,
• the contractual terms of the instrument give rise, on specified dates, to cash flows that are SPPI on the principal amount outstanding.

Financial assets meeting these criteria are measured initially at fair value plus transaction costs. They are subsequently measured at amortized
cost using the effective interest method, less any impairment in value. The amortization is included in ‘Interest income’ in the statement of
income. Gains or losses are recognized in statement of income when these investments are derecognized or impaired, as well as through
the amortization process. The ECL are recognized in the statement of income under provision for impairment and credit losses: The effects of
revaluation or foreign currency-denominated investments are recognized in the statement of income. Gains or losses arising from disposals
of these instruments are included in ‘Gains (losses) on disposal of investment securities at amortized cost’ in the statement of income.

The Group’s financial assets at amortized cost are presented in the statement of financial position as Due from BSP, Due from other banks,
Interbank loans receivable and SPURA, Investment securities at amortized cost, Loans and receivables, Accrued interest receivables and
certain financial assets under Other assets.

The Group may irrevocably elect at initial recognition to classify a financial asset that meets the amortized cost criteria above as at FVTPL if
that designation eliminates or significantly reduces an accounting mismatch had the financial asset been measured at amortized cost.

Financial Assets at FVTPL

Debt instruments that neither meet the amortized cost nor the FVOCI criteria, or that meet the criteria but the Group has chosen to designate
as at FVTPL at initial recognition, are classified as financial assets at FVTPL. Equity investments are classified as financial assets at FVTPL,
unless the Group irrevocably designates an equity investment that is not held for trading as at FVOCI at initial recognition. The Group’s
financial assets at FVTPL include government securities, corporate bonds and equity securities which are held for trading purposes and
derivatives.

6 CHINA BANKING CO RPORATI ON

A financial asset is considered as held for trading if:
• it has been acquired principally for the purpose of selling it in the near term;
• on initial recognition, it is part of a portfolio of identified financial instruments that the Group manages together and has evidence of a
recent actual pattern of short-term profit-taking; or,
• it is a derivative that is not designated and effective as a hedging instrument or financial guarantee.

Gains and losses arising from changes (mark-to-market) in the fair value of the financial assets at FVTPL and gains or losses arising from
disposals of these instruments are included in ‘Gains (losses) on trading and investment securities’ account in the statement of income.
Interest recognized based on the modified effective interest rate of these investments is reported in statement of income under ‘Interest
income’ account while dividend income is reported in statement of income under ‘Miscellaneous income’ account when the right of payment
has been established.

Derivative instruments
The Parent Company is a party to derivative instruments, particularly, forward exchange contracts, interest rate swaps (IRS) and warrants.
These contracts are entered into as a service to customers and as a means of reducing and managing the Parent Company’s foreign
exchange risk, and interest rate risk as well as for trading purposes, but are not designated as hedges. Such derivative financial instruments
are stated at fair value through profit or loss.

Any gains or losses arising from changes in fair value of derivative instruments that do not qualify for hedge accounting are taken directly to
the statement of income under ‘Foreign exchange gain (loss) - net’ for forward exchange contracts and ‘Trading and securities gain-net’ for
IRS and warrants.

Embedded derivatives that are bifurcated from the host financial and non-financial contracts are also accounted for as financial instruments
at FVPL.

An embedded derivative is separated from the host contract and accounted for as a derivative if all of the following conditions are met: (a) the
economic characteristics and risks of the embedded derivative are not closely related to the economic characteristic of the host contract;
(b) a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and (c) the hybrid or
combined instrument is not recognized at fair value through profit or loss.

The Group assesses whether embedded derivatives are required to be separated from the host contracts when the Group first becomes a
party to the contract. Reassessment of embedded derivatives is only done when there are changes in the contract that significantly modifies
the contractual cash flows that would otherwise be required.

Financial Assets at FVOCI - Equity Investments

At initial recognition, the Group can make an irrevocable election (on an instrument-by-instrument basis) to designate equity investments as
at FVOCI; however, such designation is not permitted if the equity investment is held by the Group for trading. The Group has designated
certain equity instruments as at FVOCI on January 1, 2018.

Financial assets at FVOCI are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value, with no
deduction for any disposal costs. Gains and losses arising from changes in fair value are recognized in other comprehensive income and
accumulated in Net unrealized fair value gain (loss) on financial assets at FVOCI in the balance sheet. When the asset is disposed of, the
cumulative gain or loss previously recognized in the Net unrealized fair value gains (losses) on investment securities account is not reclassified
to profit or loss, but is reclassified directly to Surplus account. Any dividends earned on holding these equity instruments are recognized in
profit or loss under ‘Miscellaneous Income’ account.

Financial Assets at FVOCI - Debt Investments

The Group applies the category of debt instruments measured at FVOCI when both of the following conditions are met:
• the instrument is held within a business model, the objective of which is achieved by both collecting contractual cash flows and selling
financial assets, and
• the contractual terms of the financial asset meet the SPPI test.

FVOCI debt instruments are subsequently measured at fair value with gains and losses arising due to changes in fair value being recognized
in OCI. Interest income and foreign exchange gains and losses are recognized in profit or loss. Provision for credit and impairment losses is
recognized in profit or loss with the corresponding ECL recognized in OCI.

On derecognition, ECL and cumulative gains or losses previously recognized in OCI are reclassified from OCI to profit or loss.

7
 Reclassification
The Group can only reclassify financial assets if the objective of its business model for managing those financial assets changes. Accordingly,
the Group is required to reclassify financial assets:
(i) from amortized cost to fair value, if the objective of the business model changes so that the amortized cost criteria are no longer met; and,
(ii) from fair value to amortized cost, if the objective of the business model changes so that the amortized cost criteria start to be met and the
characteristic of the instrument’s contractual cash flows meet the amortized cost criteria.

A change in business model occurs when the Group either begins or ceases to perform an activity that is significant to its operations. A
change in the objective of the Group’s business model will be effected only at the beginning of the next reporting period following the change
in the business model.

Impairment of financial assets

ECL represent credit losses that reflect an unbiased and probability-weighted measure of expected cash shortfalls, discounted at an
approximation to the EIR which is determined by evaluating a range of possible outcomes, the time value of money and reasonable and
supportable information about past events, current conditions and forecasts of future economic conditions. A cash shortfall is the difference
between the cash flows that are due to an entity in accordance with the contract and the cash flows that the entity expects to receive.
ECL allowances are measured at amounts equal to either (i) 12-month ECL or (ii) lifetime ECL for those financial instruments which have
experienced a significant increase in credit risk (SICR) since initial recognition (General Approach). The 12-month ECL is the portion of lifetime
ECL that results from default events on a financial instrument that are possible within the 12 months after the reporting date. Lifetime ECL are
credit losses that results from all possible default events over the expected life of a financial instrument.

For non-credit-impaired financial instruments:

• Stage 1 consists of all non-impaired financial instruments which have not experienced a SICR since initial recognition. The Group and
the Parent Company recognizes a 12-month ECL for Stage 1 financial instruments.
• Stage 2 consists of all non-impaired financial instruments which have experienced a SICR since initial recognition. The Group and the
Parent Company recognizes a lifetime ECL for Stage 2 financial instruments.

For credit-impaired financial instruments:

• Financial instruments are classified as Stage 3 when there is objective evidence of impairment as a result of one or more loss events
that have occurred after initial recognition with a negative impact on the estimated future cash flows of a loan or a portfolio of loans. The
ECL model requires that lifetime ECL be recognized for impaired financial instruments.

The Group uses internal credit assessment and approvals at various levels to determine the credit risk of exposures at initial recognition.
Assessment can be quantitative or qualitative and depends on the materiality of the facility or the complexity of the portfolio to be assessed.
ECL is a function of the probability of default (PD), exposure at default (EAD), and loss given default (LGD), with the timing of the loss also
considered, and is estimated by incorporating forward-looking economic information and through the use of experienced credit judgment.

The PD represents the likelihood that a credit exposure will not be repaid and will go into default in either a 12-month horizon for Stage 1 or
lifetime horizon for Stage 2. EAD represents an estimate of the outstanding amount of credit exposure at the time a default may occur. For
off-balance sheet and undrawn amounts, EAD includes an estimate of any further amounts to be drawn within the contractual availability
period of the irrevocable commitments. LGD is the amount that may not be recovered in the event of default. LGD takes into consideration
the amount and quality of any collateral held. Please refer to Note 6 for other information related to the Bank’s models for PD, EAD, and LGD.

The calculation of ECLs, including the estimation of PD, EAD, LGD and discount rate, is made on an individual basis for most of the Group’s
financial assets, and on a collective basis for retail products such as credit card receivables. The collective assessments are made separately
for portfolios of facilities with similar credit risk characteristics.

In certain circumstances, the Bank modifies the original terms and conditions of a credit exposure to form a new loan agreement or payment
schedule. The modifications can be given depending on the borrower’s or counterparty’s current or expected financial difficulty. The
modifications may include, but are not limited to, change in interest rate and terms, principal amount, maturity date, date and amount of
periodic payments and accrual of interest and charges. Distressed restructuring with indications of unlikeliness to pay are categorized as
impaired accounts and are moved to Stage 3.

Hedge Accounting
For the purpose of hedge accounting, hedges are classified as:

• Fair value hedges when the risk being hedged is the exposure to changes in the fair value of a recognized asset or liability or an
unrecognized firm commitment.
• Cash flow hedges when the risk being hedged is the exposure to variability in cash flows that is either attributable to a particular risk
associated with a recognized asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognized
firm commitment
• Hedges of a net investment in a foreign operation

8 CHINA BANKING CO RPORATI ON

At the inception of a hedge relationship, the Parent Company formally designates and documents the hedge relationship to which it wishes
to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.

The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the
Parent Company will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources
of hedge ineffectiveness and how the hedge ratio is determined).

A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:

• There is an economic relationship between the hedged item and the hedging instrument.
• The effect of credit risk does not dominate the value changes that result from that economic relationship.
• The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Parent
Company actually hedges and the quantity of the hedging instrument that the Parent Company actually uses to hedge that quantity
of hedged item.

An economic relationship exists when the hedging instrument and the hedged item have values that generally move in opposite
directions in response to movements in the same risk (hedged risk). The Parent Company assesses economic relationship by performing
prospective qualitative or quantitative hedge effectiveness assessment at each reporting date. In addition, the Parent Company measures
ineffectiveness by comparing the cumulative change in the fair value of the hedging instrument with the cumulative change in the fair value
of the hedged item.

Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is recognized in OCI in the cash flow hedge reserve, while any ineffective
portion is recognized immediately in the statement of income. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or
loss on the hedging instrument and the cumulative change in fair value of the hedged item.

As of December 31, 2019, the Parent Company has outstanding interest rate swaps designated as effective hedging instruments in a cash
flow hedge (Note 26).

Impairment of Financial Assets (Policies applicable prior to January 1, 2018)

The Group assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired.
A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result
of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event (or events) has
an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence
of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or
delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where
observable data indicate that there is measurable decrease in the estimated future cash flows, such as changes in arrears or economic
conditions that correlate with defaults.

Financial assets carried at amortized cost

For financial assets carried at amortized cost, the Group first assesses whether objective evidence of impairment exists individually for
financial assets that are individually significant, or collectively for financial assets that are not individually significant.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the
asset’s carrying amount and the present value of the estimated future cash flows (excluding future credit losses that have not been incurred).
The present value of the estimated future cash flows is discounted at the financial asset’s original EIR.

If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current EIR, adjusted for the original credit risk
premium. The calculation of the present value of the estimated future cash flows of a collateralized financial asset reflects the cash flows that
may result from foreclosure less costs for obtaining and selling the collateral, whether or not foreclosure is probable.

The carrying amount of the asset is reduced through use of an allowance account and the amount of loss is charged to the statement of
income. Interest income continues to be recognized based on the original EIR of the asset. The financial assets, together with the associated
allowance accounts, are written off when there is no realistic prospect of future recovery and all collateral has been realized.

If the Group determines that no objective evidence of impairment exists for individually assessed financial asset, whether significant or not,
it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses for impairment. Those
characteristics are relevant to the estimation of future cash flows for groups of such assets by being indicative of the debtors’ ability to pay all
amounts due according to the contractual terms of the assets being evaluated. Assets that are individually assessed for impairment and for
which an impairment loss is, or continues to be, recognized are not included in a collective assessment for impairment.

9
 For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of such credit risk characteristics as
industry, collateral type, past-due status and term. Future cash flows in a group of financial assets that are collectively evaluated for
impairment are estimated on the basis of historical loss experience for assets with credit risk characteristics similar to those in the group.
Historical loss experience is adjusted on the basis of current observable data to reflect the effects of current conditions that did not affect
the period on which the historical loss experience is based and to remove the effects of conditions in the historical period that do not exist
currently. Estimates of changes in future cash flows reflect, and are directionally consistent with changes in related observable data from
period to period (such as changes in unemployment rates, property prices, commodity prices, payment status, or other factors that are
indicative of incurred losses in the Group and their magnitude). The methodology and assumptions used for estimating future cash flows are
reviewed regularly by the Group to reduce any differences between loss estimates and actual loss experience.

If, in a subsequent year, the amount of the estimated impairment loss decreases because of an event occurring after the impairment was
recognized, the previously recognized impairment loss is reduced by adjusting the allowance account. If a future write-off is later recovered,
the recovery is credited to ‘Miscellaneous income’.

Financial assets carried at cost

If there is objective evidence that an impairment loss on an unquoted equity instrument that is not carried at fair value because its fair value
cannot be reliably measured, or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument
has been incurred, the amount of loss is measured as the difference between the asset’s carrying amount and the present value of estimated
future cash flows discounted at the current market rate of return for a similar financial asset.

Available-for-sale financial assets

For AFS financial assets, the Group assesses at each reporting date whether there is objective evidence that a financial asset or group of
financial assets is impaired.

In the case of equity investments classified as AFS financial assets, this would include a significant or prolonged decline in the fair value of the
investments below its cost. Where there is evidence of impairment, the cumulative loss - measured as the difference between the acquisition
cost and the current fair value, less any impairment loss on that financial asset previously recognized in the statement of income - is removed
from OCI and recognized in the statement of income. Impairment losses on equity investments are not reversed through the statement of
income. Increases in fair value after impairment are recognized directly in OCI.

In the case of debt instruments classified as AFS financial assets, impairment is assessed based on the same criteria as financial assets
carried at amortized cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the
amortized cost and the current fair value, less any impairment loss on that investment previously recognized in profit or loss. Future interest
income is based on the reduced carrying amount and is accrued based on the rate of interest used to discount future cash flows for the
purpose of measuring impairment loss. Such accrual is recorded as part of ‘Interest income’ in the statement of income. If, in subsequent
years, the fair value of a debt instrument increased and the increase can be objectively related to an event occurring after the impairment loss
was recognized in the statement of income, the impairment loss is reversed through the statement of income.

Restructured loans
Where possible, the Group seeks to restructure loans rather than to take possession of collateral. This may involve extending the payment
arrangements and the agreement of new loan conditions. Once the terms have been renegotiated, the loan is no longer considered past due.
Management continuously reviews restructured loans to ensure that all criteria are met and that future payments are likely to occur. The loans
continue to be subject to an individual or collective impairment assessment, calculated using the loan’s original EIR. The difference between
the recorded value of the original loan and the present value of the restructured cash flows, discounted at the original EIR, is recognized in
‘Provision for impairment and credit losses’ in the statement of income.

When the loan has been restructured but not derecognized, the Group also reassesses whether there has been a SICR and considers
whether the assets should be classified as Stage 3. If the restructuring terms are substantially different, the loan is derecognized and a new
‘asset’ is recognized at fair value using the revised EIR.

Financial Liabilities
Financial liabilities which include deposit liabilities, bills payable, notes and bonds payable, and other liabilities (except tax-related payables,
pre-need reserves and post-employment defined benefit obligation) are recognized when the Group becomes a party to the contractual
terms of the instrument.

Financial liabilities are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method,
for those with maturities beyond one year, less settlement payments. All interest-related charges incurred on financial liabilities are recognized
as an expense in the statements of income under the caption Interest expense.

10 CHINA BANKING CO RPORATI ON

Deposit liabilities are stated at amounts in which they are to be paid. Interest is accrued periodically and recognized in a separate liability
account before recognizing as part of deposit liabilities.

Bills payable and Notes and bonds payable are recognized initially at fair value, which is the issue proceeds (fair value of consideration received)
less any issuance costs. These are subsequently measured at amortized cost; any difference between the proceeds net of transaction costs
and the redemption value is recognized in the statements of income over the period of the borrowings using the effective interest method.

Derivative liabilities are recognized initially and subsequently measured at fair value with changes in fair value recognized in the statements
of income.

Other liabilities, apart from derivative liabilities, are recognized initially at their fair value and subsequently measured at amortized cost, using
effective interest method for maturities beyond one year, less settlement payments.

Derecognition of Financial Assets and Liabilities

Financial assets
A financial asset (or, where applicable a part of a financial asset or part of a group of financial assets) is derecognized when:

• the rights to receive cash flows from the asset have expired; or
• the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay
to a third party under a “pass-through” arrangement; or
• the Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and
rewards of the asset, or (b) has neither transferred nor retained the risks and rewards of the asset but has transferred control of the asset.

Where the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has
neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognized
to the extent of the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the
transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the
Group could be required to repay.

Financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or has expired. Where an existing financial
liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the
difference in the respective carrying amounts is recognized in the statement of income.

Financial Guarantees and Undrawn Loan Commitments

The Group issues financial guarantees and loan commitments. Financial guarantees are those issued by the Group to creditors as allowed
under existing rules and regulations whereby it guarantees third party obligations by signing as guarantor in the contract/agreement. Undrawn
loan commitments and letters of credit are commitments under which over the duration of the commitment, the Group is required to provide a
loan with pre-specified terms to the customer. The nominal contractual value of financial guarantees and undrawn loan commitments, where
the loan agreed to be provided is on market terms, are not recorded in the statement of financial position. Starting January 1, 2018, these
contracts are in the scope of the ECL requirements where the Group estimates the expected portion of the undrawn loan commitments that
will be drawn over their expected life. The ECL related to loan commitments is recognized in ‘Miscellaneous liabilities’.

Write-offs
Financial assets are written off either partially or in their entirety when the Group no longer expects collections or recoveries within a
foreseeable future. If the amount to be written off is greater than the accumulated loss allowance, the difference is first treated as an addition
to the allowance that is then applied against the gross carrying amount. Any subsequent recoveries are credited to credit loss expense.

Investment in Associates
Associates pertain to all entities over which the Group has significant influence but not control, generally accompanying a shareholding of
between 20.00% and 50.00% of the voting rights. In the consolidated and parent company financial statements, investments in associates
are accounted for under the equity method of accounting.

Under the equity method, an investment in an associate is carried in the balance sheet at cost plus post-acquisition changes in the Group’s
share of the net assets of the associates. Goodwill, if any, relating to an associate is included in the carrying value of the investment and is
not amortized. The statement of income reflects the share of the results of operations of the associate. Where there has been a change
recognized directly in the equity of the associate, the Group recognizes its share of any changes and discloses this, when applicable, in the
statement of changes in equity.

11
 When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables,
the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate. Profits or losses
resulting from transactions between the Group and an associate are eliminated to the extent of the interest in the associate.

Dividends earned on this investment are recognized in the Parent Company’s statement of income as a reduction from the carrying value of
the investment.

The financial statements of the associate are prepared for the same reporting period as the Parent Company. Where necessary, adjustments
are made to bring the accounting policies in line with those of the Group.

Upon loss of significant influence over the associate, the Group measures and recognizes any retained investment at its fair value. Any
difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and
proceeds from disposal is recognized in profit or loss.

Investment in Subsidiaries
In the parent company financial statements, investment in subsidiaries is accounted for under the equity method of accounting similar to the
investment in associates.

Business Combinations and Goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the
consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each
business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of
the acquiree’ s identifiable net assets. Acquisition costs incurred are charged to profit or loss.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation
in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the
separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree
is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequent changes
to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognized in accordance with PFRS 9,
either in profit or loss or as a charge to OCI. If the contingent consideration is classified as equity, it should not be remeasured until it is finally
settled within equity.

Goodwill is initially measured at cost being the excess of the aggregate of fair value of the consideration transferred and the amount recognized
for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value
of the net assets of the subsidiary acquired, the difference is recognized in profit or loss as gain on bargain purchase under ‘Miscellaneous
income’.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate the carrying value may be
impaired. For the purpose of impairment testing, goodwill acquired in a business combination is, from the date of acquisition, allocated to
each of the Group’s CGUs, or groups of CGUs, that are expected to benefit from the synergies of the combination, irrespective of whether
other assets or liabilities of the acquiree are assigned to those units or group of units. Each unit or group of units to which the goodwill is
allocated:

• represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and
• is not larger than an operating segment identified for segment reporting purposes.

Where goodwill forms part of a CGU (or group of CGUs) and part of the operation within that unit is disposed of, the goodwill associated with
the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation.
Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the CGU
retained.

Cash Dividend and Non-cash Distribution to Equity Holders of the Parent Company
The Group recognizes a liability to make cash or non-cash distributions to equity holders of the Parent Company when the distribution is
authorized and the distribution is no longer at the discretion of the Group. A corresponding amount is recognized directly in equity.

12 CHINA BANKING CO RPORATI ON

Non-cash distributions are measured at the fair value of the assets to be distributed with fair value remeasurement recognized directly in
equity.

Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets
distributed is recognized in the statement of income.

Bank Premises, Furniture, Fixtures and Equipment

Land is stated at cost less any impairment in value while depreciable properties such as buildings, leasehold improvements, and furniture,
fixtures and equipment are stated at cost less accumulated depreciation and amortization, and any impairment in value. Such cost includes
the cost of replacing part of the bank premises, furniture, fixtures and equipment when that cost is incurred and if the recognition criteria are
met, but excluding repairs and maintenance costs.

Construction-in-progress is stated at cost less any impairment in value. The initial cost comprises its construction cost and any directly
attributable costs of bringing the asset to its working condition and location for its intended use, including borrowing costs. Construction-in-
progress is not depreciated until such time that the relevant assets are completed and put into operational use.

Depreciation and amortization is calculated using the straight-line method over the estimated useful life (EUL) of the depreciable assets as
follows:

EUL
Buildings 50 years
Furniture, fixtures and equipment 3 to 5 years
Leasehold improvements Shorter of 6 years or the related lease terms

The depreciation and amortization method and useful life are reviewed periodically to ensure that the method and period of depreciation and
amortization are consistent with the expected pattern of economic benefits from items of bank premises, furniture, fixtures and equipment
and leasehold improvements.

An item of bank premises, furniture, fixtures and equipment is derecognized upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in the statement of income in the year the asset is derecognized.

Investment Properties
Investment properties include real properties acquired in settlement of loans and receivables which are measured initially at cost, including
certain transaction costs. Investment properties acquired through a nonmonetary asset exchange is measured initially at fair value unless
(a) the exchange lacks commercial substance or (b) the fair value of neither the asset received nor the asset given up is reliably measurable.
The difference between the fair value of the investment property upon foreclosure and the carrying value of the loan is recognized under
‘Gain on asset foreclosure and dacion transactions’ in the statement of income. Subsequent to initial recognition, depreciable investment
properties are stated at cost less accumulated depreciation and any accumulated impairment in value except for land which is stated at cost
less impairment in value.

Expenditures incurred after the investment properties have been put into operation, such as repairs and maintenance costs, are normally
charged to income in the period in which the costs are incurred.

Depreciation is calculated on a straight-line basis using the remaining EUL of the building and improvement components of investment
properties which ranged from 10 to 33 years from the time of acquisition of the investment properties.

Investment properties are derecognized when they have either been disposed of or when the investment properties are permanently
withdrawn from use and no future benefit is expected from their disposal. Any gains or losses on the derecognition of an investment property
are recognized as ‘Gain on sale of investment properties’ in the statement of income in the year of derecognition.

Transfers are made to investment properties when, and only when, there is a change in use evidenced by ending of owner occupation,
commencement of an operating lease to another party or ending of construction or development. Transfers are made from investment
properties when, and only when, there is a change in use evidenced by commencement of owner occupation or commencement of
development with a view to sale.

13
 Intangible Assets
Intangible assets include software cost and branch licenses resulting from the Parent Company’s acquisition of CBSI, Unity Bank and PDB
(Notes 11 and 14).

Software costs
Costs related to software purchased by the Group for use in operations are amortized on a straight-line basis over 3 to 10 years. The
amortization method and useful life are reviewed periodically to ensure that the method and period of amortization are consistent with the
expected pattern of economic benefits embodied in the asset.

Branch licenses
The branch licenses are initially measured at fair value as of the date of acquisition and are deemed to have an indefinite useful life as there is
no foreseeable limit to the period over which they are expected to generate net cash inflows for the Group.

Such intangible assets are not amortized, instead they are tested for impairment annually either individually or at the CGU level. Impairment
is determined by assessing the recoverable amount of each CGU (or group of CGUs) to which the intangible asset relates. Recoverable
amount represents the CGU’s value in use. Where the recoverable amount of the CGU is less than its carrying amount, an impairment loss
is recognized.

Gains and losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and
the carrying amount of the asset and are recognized in earnings when the asset is derecognized.

Impairment of Nonfinancial Assets

At each reporting date, the Group assesses whether there is any indication that its nonfinancial assets (e.g., investment in associates,
investment properties, bank premises, furniture, fixtures and equipment, goodwill and intangible assets) may be impaired. When an indicator
of impairment exists or when an annual impairment testing for an asset is required, the Group makes a formal estimate of recoverable amount.

Recoverable amount is the higher of an asset’s (or CGU’s) fair value less costs to sell and its value in use and is determined for an individual
asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which
case the recoverable amount is assessed as part of the CGU to which it belongs. Where the carrying amount of an asset (or CGU) exceeds
its recoverable amount, the asset (or CGU) is considered impaired and is written down to its recoverable amount. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset (or CGU).

An impairment loss is charged to operations in the year in which it arises.

For nonfinancial assets, excluding goodwill and branch licenses, an assessment is made at each reporting date as to whether there is any
indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable
amount is estimated. A previously recognized impairment loss is reversed, except for goodwill, only if there has been a change in the
estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is the case, the carrying
amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have
been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in
the statement of income. After such a reversal, the depreciation expense is adjusted in future years to allocate the asset’s revised carrying
amount, less any residual value, on a systematic basis over its remaining life.

Accounting policy on Leases effective January 1, 2019

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the
use of an identified asset for a period of time in exchange for consideration.

Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets.
The Group recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

i) Right-of-use assets
The Group recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use).
Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement
of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized adjusted by lease payments made at or
before the commencement date and lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter
of the lease term and the estimated useful lives of the depreciable assets. The depreciation expense is presented under ‘Depreciation and
Amortization’ in the statement of income.

14 CHINA BANKING CO RPORATI ON

If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated useful life of the asset.

The right-of-use assets are also subject to impairment. Refer to the accounting policies in Impairment of Nonfinancial Assets.

ii) Lease liabilities

At the commencement date of the lease, the Group recognizes lease liabilities measured at the present value of lease payments to be made
over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable,
variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for
terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on
an index or a rate are recognized as expenses in the period in which the event or condition that triggers the payment occurs. In calculating
the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest
rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is
a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an
index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

iii) Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of ATM sites (i.e., those leases that have a lease term
of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets
recognition exemption to leases of ATM sites that are considered to be low value. Lease payments on short-term leases and leases of low
value assets are recognized as expense on a straight-line basis over the lease term.

Group as a lessor
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as
operating leases. Rental income arising from leased properties is accounted for on a straight-line basis over the lease terms and is included
in revenue in the statement of income due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease
are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent
rents are recognized as revenue in the period in which they are earned.

Leases (Prior to January 1, 2019)

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement and requires an
assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys
a right to use the asset. A reassessment is made after inception of the lease only if one of the following applies:

(a) there is a change in contractual terms, other than a renewal or extension of the arrangement; or
(b) a renewal option is exercised or extension granted, unless that term of the renewal or extension was initially included in the lease term; or
(c) there is a change in the determination of whether fulfillment is dependent on a specified asset; or
(d) there is a substantial change to the asset.

Where a reassessment is made, lease accounting shall commence or cease from the date when the change in circumstances gave rise to
the reassessment for scenarios (a), (c), or (d) above, and at the date of renewal or extension period for scenario (b).

Group as a lessee
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Operating
lease payments are recognized as an expense in the statement of income on a straight-line basis over the lease term and included in
‘Occupancy cost’ in the statement of income.

Group as a lessor
Leases where the Group does not transfer substantially all the risks and benefits of ownership of the assets are classified as operating leases.
Initial direct costs incurred in negotiating operating leases are added to the carrying amount of the leased asset and recognized over the lease
term on the same basis as the rental income. Contingent rents are recognized as revenue in the period in which they are earned.

Capital Stock
Capital stocks are recorded at par. Proceeds in excess of par value are recognized under equity as ‘Capital paid in excess of par value’ in the
balance sheet. Incremental costs incurred which are directly attributable to the issuance of new shares are shown in equity as a deduction
from proceeds, net of tax.

15
 Revenue Recognition

Revenues within the scope of PFRS 15, Revenue from Contracts with Customers
Revenue from contract with customers is recognized upon transfer of promised goods or services to customers at an amount that reflects
the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The Group and the
Parent Company exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the
five-step model to contracts with customers.

The following specific recognition criteria must be met before revenue is recognized for contracts within the scope of PFRS 15:

Fee and commission income

The Group earns fee and commission income from a diverse range of services it provides to its customers. Fee income can be divided into
the following two categories:

a. Fee income earned from services that are provided over a certain period of time
Fees earned for the provision of services over a period of time are accrued over that period. These fees include investment fund fees,
custodian fees, fiduciary fees, commission income, credit related fees, asset management fees, portfolio and other management fees,
and advisory fees.

b. Fee income from providing transactions services

Fees arising from negotiating or participating in the negotiation of a transaction for a third party - such as underwriting fees, corporate
finance fees and brokerage fees for the arrangement of the acquisition of shares or other securities or the purchase or sale of businesses
- are recognized on completion of the underlying transaction. Fees or components of fees that are linked to a certain performance are
recognized after fulfilling the corresponding criteria.

Loan syndication fees are recognized in the statement of income when the syndication has been completed and the Group retains no part
of the loans for itself or retains part at the same EIR as for the other participants.

Service charges and penalties

Service charges and penalties are recognized only upon collection or accrued where there is a reasonable degree of certainty as to their
collectability.

Other income
Income from sale of service is recognized upon rendition of the service. Income from sale of properties is recognized when control has been
transferred to the customer and when the collectability of the sales price is reasonably assured.

Revenues outside the scope of PFRS 15

Interest income
For all interest-bearing financial assets, interest income is recorded at either EIR, which is the rate that exactly discounts estimated future
cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying
amount of the financial asset or financial liability, or at rate stated in the contract. The calculation takes into account all contractual terms
of the financial instrument (for example, prepayment options), includes any fees or incremental costs that are directly attributable to the
instrument and are an integral part of the EIR, as applicable, but not future credit losses. The adjusted carrying amount is calculated based
on the original EIR. The change in carrying amount is recorded as ‘Interest income’. Loan commitment fees for loans that are likely to be
drawn down are deferred (together with any incremental costs) and recognized as an adjustment to the EIR on the loan. If the commitment
expires without the Group making the loan, the commitment fees are recognized as other income on expiry.

Once the recorded value of a financial asset or group of similar financial assets has been reduced due to an impairment loss, interest income
continues to be recognized using the original EIR applied to the new carrying amount.

Dividend income
Dividend income is recognized when the Group’s right to receive payment is established.

Trading and securities gain

This represents results arising from trading activities and sale of AFS financial assets or FVOCI debt assets.

Gain on disposal of investment securities at amortized cost

This represents results arising from sale of investment securities measured at amortized cost.

16 CHINA BANKING CO RPORATI ON

Expense Recognition
Expense is recognized when it is probable that a decrease in future economic benefits related to a decrease in an asset or an increase in
liability has occurred and the decrease in economic benefits can be measured reliably. Revenues and expenses that relate to the same
transaction or other event are recognized simultaneously.

Interest expense
Interest expense for all interest-bearing financial liabilities are recognized in ‘Interest expense’ in the statement of income using the EIR of the
financial liabilities to which they relate.

Other expenses
Expenses encompass losses as well as those expenses that arise in the ordinary course of business of the Group. Expenses are recognized
when incurred.

Retirement Benefits
Defined benefit plan
The net defined benefit liability or asset is the aggregate of the present value of the defined benefit obligation at the end of the reporting
period reduced by the fair value of plan assets and adjusted for any effect of limiting a net defined benefit asset to the asset ceiling. The
defined benefit obligation is calculated annually by an independent actuary. The present value of the defined benefit obligation is determined
by discounting the estimated future cash outflows using interest rates on government bonds that have terms to maturity approximating the
terms of the related retirement liability. The asset ceiling is the present value of any economic benefits available in the form of refunds from
the plan or reductions in future contributions to the plan.

The cost of providing benefits under the defined benefit plans is actuarially determined using the projected unit credit method.

Defined benefit costs comprise the following:

(a) service cost;
(b) net interest on the net defined benefit liability or asset; and
(c) remeasurements of net defined benefit liability or asset.

Service costs which include current service costs, past service costs and gains or losses on non-routine settlements are recognized as
expense in profit or loss. Past service costs are recognized when plan amendment or curtailment occurs.

Net interest on the net defined benefit liability or asset is the change during the period in the net defined benefit liability or asset that arises
from the passage of time which is determined by applying the discount rate based on Philippine government bonds to the net defined benefit
liability or asset. Net interest on the net defined benefit liability or asset is recognized as expense or income in profit or loss.

Remeasurements comprising actuarial gains and losses, return on plan assets and any change in the effect of the asset ceiling (excluding net
interest on defined benefit liability) are recognized immediately in OCI in the period in which they arise. Remeasurements are not reclassified
to profit or loss in subsequent periods.

Plan assets are assets that are held by a long-term employee benefit fund. Plan assets are not available to the creditors of the Group, nor
can they be paid directly to the Group. The fair value of plan assets is based on market price information. When no market price is available,
the fair value of plan assets is estimated by discounting expected future cash flows using a discount rate that reflects both the risk associated
with the plan assets and the maturity or expected disposal date of those assets (or, if they have no maturity, the expected period until the
settlement of the related obligations).

The Group’s right to be reimbursed of some or all of the expenditure required to settle a defined benefit obligation is recognized as a separate
asset at fair value when and only when reimbursement is virtually certain. If the fair value of the plan assets is higher than the present value
of the defined benefit obligation, the measurement of the resulting defined benefit asset is limited to the present value of economic benefits
available in the form of refunds from the plan or reductions in future contributions to the plan.

Employee leave entitlement

Employee entitlements to annual leave are recognized as a liability when they are accrued to the employees. The undiscounted liability for
leave expected to be settled after the end of the annual reporting period is recognized for services rendered by employees up to the end of
the reporting period.

17
 Provisions and Contingencies
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract,
the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any
provision is presented in the statement of income, net of any reimbursement. If the effect of the time value of money is material, provisions
are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of
money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage
of time is recognized as an interest expense.

Contingent liabilities are not recognized in the financial statements but are disclosed unless the possibility of an outflow of resources
embodying economic benefits is remote. Contingent assets are not recognized but are disclosed in the financial statements when an inflow
of economic benefits is probable.

Income Taxes
Current tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted as of the
reporting date.

Deferred tax
Deferred tax is provided, using the balance sheet liability method, on all temporary differences at the reporting date between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary
differences, carry forward of unused tax credits from the excess of minimum corporate income tax (MCIT) over the regular corporate income
tax (RCIT), and unused net operating loss carryover (NOLCO), to the extent that it is probable that sufficient taxable profit will be available
against which the deductible temporary differences and carry forward of unused tax credits from MCIT and unused NOLCO can be utilized.
Deferred tax, however, is not recognized on temporary differences that arise from the initial recognition of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting income nor taxable income.

Deferred tax liabilities are not provided on non-taxable temporary differences associated with investments in domestic subsidiaries and
associates.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are
reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profit will allow the
deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are applicable to the period when the asset is realized or the liability is
settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Current tax and deferred tax relating to items recognized directly in equity is also recognized in equity and not in the statement of income.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax
liabilities and deferred taxes relate to the same taxable entity and the same taxation authority.

Earnings per Share

Basic earnings per share (EPS) is computed by dividing net income for the year by the weighted average number of common shares
outstanding during the year after giving retroactive effect to stock splits, stock dividends declared and stock rights exercised during the
year, if any.

The Parent Company has no outstanding dilutive potential common shares.

Dividends on Common Shares

Dividends on common shares are recognized as a liability and deducted from equity when approved by the respective shareholders of the
Parent Company and its subsidiaries. Dividends declared during the year that are approved after the reporting date are dealt with as an
event after the reporting date.

18 CHINA BANKING CO RPORATI ON

Segment Reporting
The Group’s operating businesses are organized and managed separately according to the nature of the products and services provided,
with each segment representing a strategic business unit that offers different products and serves different markets. Financial information
on business segments is presented in Note 32. The Group’s revenue producing assets are located in the Philippines (i.e., one geographical
location). Therefore, geographical segment information is no longer presented.

Fiduciary Activities
Assets and income arising from fiduciary activities together with related undertakings to return such assets to customers are excluded from
the financial statements where the Parent Company acts in a fiduciary capacity such as nominee, trustee or agent.

Events after the Reporting Period

Any post year-end events that provide additional information about the Group’s position at the reporting date (adjusting event) are reflected
in the Group’s financial statements. Post year-end events that are not adjusting events, if any, are disclosed when material to the financial
statements.

Standards Issued but Not Yet Effective

There are new PFRSs, amendments, interpretation and annual improvements, to existing standards effective for annual periods subsequent
to 2019, which are adopted by the FRSC. Management will adopt the following relevant pronouncements in accordance with their transitional
provisions; and, unless otherwise stated, none of these are expected to have significant impact on the Group’s financial statements:

Effective beginning on or after January 1, 2020

• Amendments to PFRS 3, Definition of a Business.
The amendments to PFRS 3 clarify the minimum requirements to be a business, remove the assessment of a market participant’s ability
to replace missing elements, and narrow the definition of outputs. The amendments also add guidance to assess whether an acquired
process is substantive and add illustrative examples. An optional fair value concentration test is introduced which permits a simplified
assessment of whether an acquired set of activities and assets is not a business.

An entity applies those amendments prospectively with earlier application permitted.

These amendments will apply on future business combinations of the Group.

• Amendments to PAS 1, Presentation of Financial Statements, and PAS 8, Accounting Policies, Changes in Accounting Estimates and
Errors, Definition of Material

The amendments refine the definition of material in PAS 1 and align the definitions used across PFRSs and other pronouncements.
They are intended to improve the understanding of the existing requirements rather than to significantly impact an entity’s materiality
judgements.

An entity applies those amendments prospectively with earlier application permitted.

Effective beginning on or after January 1, 2021

• PFRS 17, Insurance Contracts
The standard is a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation
and disclosure. Once effective, PFRS 17 will replace PFRS 4, Insurance Contracts. This new standard on insurance contracts applies to
all types of insurance contracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of entities that issue them,
as well as to certain guarantees and financial instruments with discretionary participation features. A few scope exceptions will apply.

The overall objective of PFRS 17 is to provide an accounting model for insurance contracts that is more useful and consistent for
insurers. In contrast to the requirements in PFRS 4, which are largely based on grandfathering previous local accounting policies, PFRS
17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects. The core of PFRS 17 is the
general model, supplemented by:

• A specific adaptation for contracts with direct participation features (the variable fee approach)

• A simplified approach (the premium allocation approach) mainly for short-duration contracts

Early application is permitted.

19
 Deferred effectivity
• Amendments to PFRS 10, Consolidated Financial Statements, and PAS 28, Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture. The amendments address the conflict between PFRS 10 and PAS 28 in dealing with the loss of control
of a subsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that a full gain or loss is recognized
when a transfer to an associate or joint venture involves a business as defined in PFRS 3. Any gain or loss resulting from the sale or
contribution of assets that does not constitute a business, however, is recognized only to the extent of unrelated investors’ interests in
the associate or joint venture.

On January 13, 2016, the Financial Reporting Standards Council deferred the original effective date of January 1, 2016 of the said
amendments until the International Accounting Standards Board completes its broader review of the research project on equity
accounting that may result in the simplification of accounting for such transactions and of other aspects of accounting for associates
and joint ventures.

3. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES

The preparation of the financial statements in accordance with PFRS requires the Group to make judgments and estimates that affect the
reported amounts of assets, liabilities, income and expenses and disclosure of contingent assets and contingent liabilities at reporting date.
Future events may occur which will cause the judgments and assumptions used in arriving at the estimates to change. The effects of any
change in judgments and estimates are reflected in the financial statements as they become reasonably determinable.

Judgments and estimates are continually evaluated and are based on historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.

Judgments
a. Financial instruments
Where the fair values of financial assets and financial liabilities recorded on the balance sheet or disclosed in the notes cannot be
derived from active markets, they are determined using discounted cash flow model, incorporating inputs such as current market rates
of comparable instruments. The carrying values and corresponding fair values of financial instruments, as well as the manner in which
fair values were determined, are discussed in more detail in Note 5.

b. Contingencies
The Group is currently involved in various legal proceedings. The estimate of the probable costs for the resolution of these claims has
been developed in consultation with outside counsel handling the Group’s defense in these matters and is based upon an analysis
of potential results. The Group currently does not believe that these proceedings will have a material adverse effect on the financial
statements (Note 31). It is possible, however, that future results of operations could be materially affected by changes in the estimates
or in the effectiveness of the strategies relating to these proceedings.

c. Evaluation of business model in managing financial assets (PFRS 9)

The Group manages its financial assets based on business models that maintain an adequate level of financial assets to match its
expected cash outflows, largely arising from customers’ withdrawals and continuing loan disbursements to borrowers, while maintaining
a strategic portfolio of financial assets for investment and trading activities consistent with its risk appetite.

The Group developed business models which reflect how it manages its portfolio of financial instruments. The Group’s business models
need not be assessed at entity level or as a whole but applied at the level of a portfolio of financial instruments (i.e., group of financial
instruments that are managed together by the Group) and not on an instrument-by-instrument basis (i.e., not based on intention or
specific characteristics of individual financial instrument).

In determining the classification of a financial instrument under PFRS 9, the Group evaluates in which business model a financial
asset or a portfolio of financial assets belong to taking into consideration the objectives of each business model established by the
Group, various risks and key performance indicators being reviewed and monitored by responsible officers, as well as the manner of
compensation for them. The Group also considers the frequency, value, reasons and timing of past sales and expectation of future sales
activity in this evaluation.

In addition, PFRS 9 emphasizes that if more than an infrequent and more than an insignificant sale is made out of a portfolio of financial
assets carried at amortized cost, an entity should assess whether and how such sales are consistent with the objective of collecting
contractual cash flows. In making this judgment, the Group considers certain circumstances to assess that an increase in the frequency
or value of sales of financial instruments in a particular period is not necessarily inconsistent with a held-to-collect business model if the
Group can explain the reasons for those sales and why those sales do not reflect a change in the Group’s objective for the business
model.

20 CHINA BANKING CO RPORATI ON

 The business model assessment is based on reasonably expected scenarios without taking worst case or stress case scenarios into
account. If cash flows, after initial recognition are realized in a way that is different from the Group’s and the Parent Company’s original
expectations, the Group and the Parent Company does not change the classification of the remaining financial assets held in that
business model but incorporates such information when assessing newly originated or newly purchased financial assets going forward.

In 2019, the Parent Company sold investment securities at amortized cost whose carrying values prior to the sale amounted P13.32 billion.
Such disposals were made due to the following conditions and reasons:
• An increase in the financial assets’ credit risk due to political uncertainty affecting the sovereign issuer’s environment
• A change in the funding profile of the Parent Company;
• A potential breach in the regulatory or internal limits of the Parent Company;
• A highly probable change in regulations with a potentially adverse impact to the financial assets’ contractual cash flows

The disposals resulted in gains amounting to P1.30 billion for the Parent Company.

Also, CBS sold investment securities at amortized cost amounting to P5.29 billion to comply with regulatory limits. The sold investments
included securities with carrying amount of P1.93 billion that are nearing their maturity dates and where the selling price approximated
amortized cost. The disposals resulted in gains amounting to P82.51 million for CBS.

These disposals in the investment securities at amortized cost are consistent with the portfolios’ business models with respect to the
conditions and reasons for which the disposals were made as discussed above. Further, these disposals did not result in a change in
business model and the remaining portfolio after the sale remains to be accounted for at amortized cost (see Note 9).

d. Testing the cash flow characteristics of financial assets (PFRS 9)

In determining the classification of financial assets under PFRS 9, the Group assesses whether the contractual terms of the financial
assets give rise on specified dates to cash flows that are SPPI on the principal amount outstanding, with interest representing time value
of money and credit risk associated with the principal amount outstanding. The assessment as to whether the cash flows meet the test
is made in the currency in which the financial asset is denominated. Any other contractual term that changes the timing or amount of
cash flows (unless it is a variable interest rate that represents time value of money and credit risk), i.e., cash flows that are non-SPPI,
does not meet the amortized cost criteria. In cases where the relationship between the passage of time and the interest rate of the
financial instrument may be imperfect, known as modified time value of money, the Group assesses the modified time value of money
feature to determine whether the financial instrument still meets the SPPI criterion. The objective of the assessment is to determine how
different the undiscounted contractual cash flows could be from the undiscounted cash flows that would arise if the time value of money
element was not modified (the benchmark cash flows). If the resulting difference is significant, the SPPI criterion is not met. In view of
this, the Group considers the effect of the modified time value of money element in each reporting period and cumulatively over the life
of the financial instrument.

e. Incremental borrowing rate used for lease liabilities

If the Group cannot readily determine the interest rate implicit in the lease, it uses its incremental borrowing rate in measuring its lease
liabilities. The incremental borrowing rate is the rate of interest that the Group would have to pay to borrow over a similar term, and with
a similar security, the funds necessary to obtain an asset of a similar value in a similar economic environment. The Group estimates
the incremental borrowing rate using observable inputs (prevailing risk-free market rates) adjusted by the credit risk of the Group (i.e.,
credit spread).

f. Hedge accounting
The Bank has designated the hedge relationship between its floating rate bond payable (Note 18) and an interest rate swap as cash
flow hedge. The Bank’s hedge accounting policies include an element of judgement and estimation, in particular, in respect of the
existence of highly probable cash flows for inclusion within the cash flow hedge. Estimates of future interest rates and the general
economic environment will influence the availability and timing of suitable hedged items, with an impact on the effectiveness of the
hedge relationships. Details of the Bank’s hedge accounting policies are described in Note 26.

Estimates
a. Expected credit losses on financial assets and commitments (PFRS 9)
The Group reviews its financial assets and commitments at each reporting date to determine the amount of expected credit losses to
be recognized in the balance sheet and any changes thereto in the statement of income. In particular, judgments and estimates by
management are required in determining the following:

• whether a financial asset has had a significant increase in credit risk since initial recognition;
• whether default has taken place and what comprises a default;
• macro-economic factors that are relevant in measuring a financial asset’s probability of default as well as the Group’s forecast of
these macro-economic factors;

21
 • probability weights applied over a range of possible outcomes;
• sufficiency and appropriateness of data used and relationships assumed in building the components of the Group’s expected
credit loss models;
• measuring the exposure at default for unused commitments on which an expected credit loss should be recognized and the
applicable loss rate

The related allowance for credit losses of financial assets and commitments of the Group and the Parent Company are disclosed in
Notes 16 and 21.

b. Impairment of goodwill
Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying
value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of the cash generating unit
(CGU) to which the goodwill relates. The recoverable amount of the CGU is determined based on a VIU calculation using cash flow
projections from financial budgets approved by senior management covering a five-year period. For VIU, the Group estimates the
discount rate used for the computation of the net present value by reference to industry cost of capital. Impairment assessment
process requires significant judgement and based on assumptions, specifically loan and deposit growth rates, discount rate and the
long-term growth rates.

Where the recoverable amount is less than the carrying amount of the CGU to which goodwill has been allocated, an impairment
loss is recognized immediately in the statement of income. Impairment losses relating to goodwill cannot be reversed for subsequent
increases in its recoverable amount in future periods. The carrying values of the Group’s goodwill are disclosed in Note 14.

c. Impairment of branch licenses

The Group conducts an annual review for any impairment in the value of branch licenses. Branch licenses are written down for
impairment where the recoverable value is insufficient to support the carrying value. The recoverable amount of branch licenses is
determined based on a VIU calculation using cash flow projections from financial budgets approved by senior management covering
a five-year period. For VIU, the Group estimates the discount rate used for the computation of the net present value by reference to
industry cost of capital. Impairment assessment process requires significant judgement and based on assumptions, specifically loan
and deposit growth rates, discount rate and the long-term growth rates.

The carrying values of the Group’s branch licenses are disclosed in Note 14.

d. Net plan assets and retirement expense

The determination of the Group’s net plan assets and annual retirement expense is dependent on the selection of certain assumptions
used in calculating such amounts. These assumptions include, among others, discount rates and salary rates.

The assumed discount rates were determined using the market yields on Philippine government bonds with terms consistent with the
expected employee benefit payout as of the reporting date.

The present value of the retirement obligation and fair value of plan assets, including the details of the assumptions used in the
calculation are disclosed in Note 25.

e. Recognition of deferred income taxes

Deferred tax assets are recognized for deductible temporary differences to the extent that it is probable that taxable profit will be
available against which the losses can be utilized. Management discretion is required to determine the amount of deferred tax assets
that can be recognized, based on the forecasted level of future taxable profits and the related future tax planning strategies. Key
assumptions used in forecast of future taxable income include loan portfolio and deposit growth rates.

The Group believes it will be able to generate sufficient taxable income in the future to utilize its recorded deferred tax assets. Taxable
income is sourced mainly from interest income from lending activities and earnings from service charge, fees, commissions and trust
activities.

The recognized and unrecognized deferred tax assets are disclosed in Note 28.

f. Impairment on non-financial assets

The Group assesses impairment on its nonfinancial assets (e.g., investment properties and bank premises, furniture, fixtures and
equipment) and considers the following impairment indicators:
• significant underperformance relative to expected historical or projected future operating results;
• significant changes in the manner of use of the acquired assets or the strategy for overall business; and
• significant negative industry or economic trends.

22 CHINA BANKING CO RPORATI ON

 An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. Except for investment
properties where recoverable amount is determined based on fair value less cost to sell, the recoverable amount of all other nonfinancial
assets is determined based on the asset’s value in use computation which considers the present value of estimated future cash flows
expected to be generated from the continued use of the asset. The Group is required to make estimates and assumptions that can
materially affect the carrying amount of the asset being assessed.

The carrying values of the Group’s nonfinancial assets are disclosed in Notes 12 and 13.

4. FINANCIAL INSTRUMENT CATEGORIES

The following table presents the total carrying amount of the Group’s and the Parent Company’s financial instruments per category:

Consolidated Parent Company

2019 2018 2019 2018
Financial assets
Cash and other cash items P16,839,755 P15,639,474 P14,856,844 P13,705,304
Financial assets at FVTPL 18,500,111 7,596,261 18,444,101 6,689,796
Financial assets at FVOCI 26,133,360 10,101,527 24,170,629 8,213,010
Financial assets at amortized cost
Due from BSP 100,174,398 101,889,773 88,109,650 95,092,944
Due from other banks 9,900,642 9,455,447 8,645,547 7,837,89 4
Interbank loans receivables and SPURA 17,036,460 11,9 9 8,040 10,027,609 8,998,040
Investment securities at amortized cost 168,202,728 172,537,036 164,231,583 163,824,466
Loans and receivables 568,919,164 505,804,955 502,930,197 441,432,156
Accrued interest receivable 7,158,494 5,697,181 6,526,475 5,126,127
Other assets* 4,382,441 3,577,270 2,077,459 1,520,108
875,774,327 810,959,702 782,548,520 723,831,735
Total financial assets P937,247,553 P844,296,964 P840,020,094 P752,439,845
*Other assets include accounts receivables, SCR, RCOCI and miscellaneous financial assets (Note 15).

Consolidated Parent Company

2019 2018 2019 2018
Financial liabilities
Other financial liabilities:
Deposit liabilities P775,427,861 P722,123,297 P687,764,453 P638,243,362
Bills payable 33,381,406 39,826,532 33,381,406 39,826,532
Manager’s checks 1,998,678 2,577,175 1,535,936 2,069,812
Accrued interest and other expenses * 2,153,496 2,456,064 1,803,090 2,035,662
Bonds payable 37,394,398 – 37,394,398 –
Other liabilities** 10,532,784 7,347,450 8,426,083 5,779,466
860,888,623 774,330,518 770,305,366 687,9 54,834
Financial liabilities at FVPL:
Derivative liabilities 1,036,052 455,150 1,036,052 455,150
Derivative contracts designated as hedges 51,949 – 51,949 –
Total financial liabilities P861,976,624 P774,785,668 P771,393,367 P688,409,984
*Accrued interest and other expenses includes accrued interest payable and accrued other expenses payable (Note 20).
**Other liabilities exclude withholding taxes payable and retirement liabilities (Note 21)

23
5. FAIR VALUE MEASUREMENT

The Group has assets and liabilities in the consolidated and Parent Company balance sheets that are measured at fair value on a recurring
and non-recurring basis after initial recognition. Recurring fair value measurements are those that another PFRS requires or permits to be
recognized in the balance sheet at the end of each financial reporting period. These include financial assets and liabilities at FVPL and
financial assets at FVOCI.

As of December 31, 2019 and 2018, except for the following financial instruments, the carrying values of the Group’s and the Parent
Company’s financial assets and liabilities as reflected in the balance sheets and related notes approximate their respective fair values:

2019
Consolidated Parent Company
Carrying Value Fair Value Carrying Value Fair Value
Financial Assets
Investment securities at amortized cost
Investment securities (Note 9)
Government bonds P116,859,352 P115,600,451 P114,157,458 P113,070,656
Private bonds 51,343,376 52,569,793 50,074,125 51,304,523
Loans and receivables (Note 10)
Corporate and commercial lending 458,007,221 449,343,219 433,716,968 423,191,284
Consumer lending 100,104,341 105,846,151 58,707,050 59,188,709
Trade-related lending 10,766,453 11,267,769 10,472,182 10,819,193
Others 41,148 47,780 33,997 39,177
Sales contracts receivable (Note 15) 1,124,275 1,200,426 210,706 224,080
Investment properties
Land 2,770,799 5,199,926 615,253.00 2,516,447
Buildings and improvements 1,603,958 2,819,400 881,734.00 1,455,041
Financial Liabilities
Deposit liabilities (Note 17) 363,600,383 358,540,409 307,293,511 302,112,818
Bonds payable 37,394,398 37,980,269 37,394,398 37,980,269
2018
Consolidated Parent Company
Carrying Value Fair Value Carrying Value Fair Value
Financial Assets
HTM financial assets (Note 9)
Government bonds P117,260,018 P108,886,906 P110,220,634 P102,006,641
Private bonds 55,277,018 54,077,408 53,603,832 52,509,703
Loans and receivables (Note 10)
Corporate and commercial lending 406,403,070 389,177,803 376,793,349 357,613,633
Consumer lending 85,688,187 85,222,099 51,816,708 46,749,579
Trade-related lending 13,662,914 13,283,538 12,782,734 12,772,774
Others 50,785 56,603 39,365 45,185
Sales contracts receivable (Note 15) 1,040,939 1,101,941 199,692 178,486
Financial Liabilities
Deposit liabilities (Note 17) 321,343,811 299,666,264 265,739,836 243,898,397

24 CHINA BANKING CO RPORATI ON

The methods and assumptions used by the Group and Parent Company in estimating the fair values of the financial instruments follow:

Cash and other cash items, due from BSP and other banks, interbank loans receivable and SPURA and accrued interest receivable - The
carrying amounts approximate their fair values in view of the relatively short-term maturities of these instruments.

Debt securities - Fair values are generally based on quoted market prices. If the market prices are not readily available, fair values are
estimated using either values obtained from independent parties offering pricing services or adjusted quoted market prices of comparable
investments or using the discounted cash flow methodology.

Equity securities - For publicly traded equity securities, fair values are based on quoted prices. For unquoted equity securities, remeasurement
to their fair values is not material to the financial statements.

Loans and receivables and sales contracts receivable (SCR) included in other assets - Fair values of loans and receivables and SCR are
estimated using the discounted cash flow methodology, where future cash flows are discounted using the Group’s current incremental
lending rates for similar types of loans and receivables.

Accounts receivable, RCOCI and other financial assets included in other assets - Quoted market prices are not readily available for these
assets. These are reported at cost and are not significant in relation to the Group’s total portfolio of securities.

Derivative instruments (included under FVPL) - Fair values are estimated based on discounted cash flows, using prevailing interest rate
differential and spot exchange rates.

Deposit liabilities (time, demand and savings deposits) - Fair values of time deposits are estimated using the discounted cash flow
methodology, where future cash flows are discounted using the Group’s current incremental borrowing rates for similar borrowings and with
maturities consistent with those remaining for the liability being valued. For demand and savings deposits, carrying amounts approximate
fair values considering that these are currently due and demandable.

Bonds payable and Bills payable – Unless quoted market prices are not readily available, fair values are estimated using the discounted cash
flow methodology, where future cash flows are discounted using the current incremental borrowing rates for similar borrowings and with
maturities consistent with those remaining for the liability being valued.

Manager’s checks and accrued interest and other expenses - Carrying amounts approximate fair values due to the short-term nature of the
accounts.

Other liabilities - Quoted market prices are not readily available for these liabilities. These are reported at cost and are not significant in relation
to the Group’s total portfolio.

Fair Value Hierarchy

The Group uses the following hierarchy for determining and disclosing the fair value of assets and liabilities by valuation technique:

Level 1: quoted prices in active markets for identical assets or liabilities;

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly
(derived from prices); and
Level 3: inputs that are not based on observable market data or unobservable inputs.

25
 As of December 31, 2019 and 2018, the fair value hierarchy of the Group’s and the Parent Company’s assets and liabilities are presented
below:
Consolidated
2019
Level 1 Level 2 Level 3 Total
Recurring fair value measurements(a)
Financial assets at FVPL
Held-for-trading
Government bonds P5,087,179 P3,363,947 P– P8,451,126
Treasury notes – 2,386,226 – 2,386,226
Treasury bills – 1,378,137 – 1,378,137
Private bonds 4,372,734 – – 4,372,734
Quoted equity shares 1,243,938 – – 1,243,938
Derivative assets – 667,950 – 667,950
FVOCI financial assets
Government bonds 3,977,446 18,563,070 – 22,540,516
Quoted private bonds 2,953,271 – – 2,953,271
Quoted equity shares 621,208 – – 621,208
P18,255,776 P26,359,330 P– P44,615,106
Financial liabilities at FVPL
Derivative liabilities P– P1,036,052 P– P1,036,052
Derivative contracts designated as hedges – 51,949 – 51,949
P– P1,088,001 P– P1,088,001
Fair values of assets carried at amortized cost/cost(a)
Investment securities at amortized cost
Government bonds P115,600,451 P– P– P115,600,451
Private bonds 52,569,793 – – 52,569,793
Loans and receivables
Corporate and commercial loans – – 449,343,219 449,343,219
Consumer loans – – 105,846,151 105,846,151
Trade-related loans – – 11,267,769 11,267,769
Others – – 47,780 47,780
Sales contracts receivable – – 1,200,426 1,200,426
Investment properties(b)
Land – – 5,199,926 5,199,926
Buildings and improvements – – 2,819,400 2,819,400
P168,170,244 P– P575,724,671 P743,894,915
Fair values of liabilities carried at amortized cost(a)
Deposit liabilities P– P– P358,540,409 P358,540,409
Bonds payable – – 37,980,269 37,980,269
– – P396,520,678 P396,520,678
(b) valued as of December 31, 2019

26 CHINA BANKING CO RPORATI ON

 Consolidated
2018
Level 1 Level 2 Level 3 Total
Recurring fair value measurements(a)
Financial assets at FVPL
Held-for-trading
Government bonds P492,521 P141,372 P− P633,893
Treasury notes − 838,662 − 838,662
Treasury bills − 1,214,170 − 1,214,170
Private bonds 3,189,063 − − 3,189,063
Quoted equity shares 1,312,625 − − 1,312,625
Derivative assets − 407,848 − 407848
Financial assets at FVOCI −
Government bonds 4,859,716 5,107,673 − 9,967,389
Quoted private bonds 35,370 − − 35,370
Quoted equity shares 80,403 − − 80,403
P9,969,698 P7,709,725 P− P17,679,423
Financial liabilities at FVPL
Derivative liabilities P− P455,150 P− P455,150
P− P455,150 P− P455,150
Fair values of assets carried at amortized cost/cost(a)
HTM financial assets
Government bonds 108,886,906 − − 108,886,906
Private bonds 54,077,408 − − 54,077,408
Loans and receivables
Corporate and commercial loans − − 389,177,803 389,177,803
Consumer loans − − 85,222,099 85,222,099
Trade-related loans − − 13,283,538 13,283,538
Others − − 56,603 56,603
Sales contracts receivable − − 1,101,941 1,101,941
Investment properties(b) −
Land − − 8,696,956 8,696,956
Buildings and improvements − − 1,371,972 1,371,972
P162,964,314 P− P498,910,912 P661,875,226
Fair values of liabilities carried at amortized cost(a)
Deposit liabilities P− P− P299,666,264 P 299,666,264
(b) valued as of December 31,2018

27
 Parent Company
2019
Level 1 Level 2 Level 3 Total
Recurring fair value measurements(a)
Financial assets at FVPL
Held-for-trading
Government bonds P5,087,179 P3,363,947 P– P8,451,126
Treasury notes – 2,386,226 – 2,386,226
Treasury bills – 1,378,137 – 1,378,137
Private bonds 4,372,734 – – 4,372,734
Quoted equity shares 1,187,928 – – 1,187,928
Derivative assets – 667,950 – 667,950
FVOCI financial assets
Government bonds 2,489,563 18,563,070 – 21,052,633
Quoted private bonds 2,512,588 – – 2,512,588
Quoted equity shares 587,043 – – 587,043
P16,237,035 P26,359,330 P– P42,596,365
Financial liabilities at FVPL
Derivative liabilities P– P1,036,052 P– P1,036,052
Derivative contracts designated as hedges 51,949 51,949
P– P1,088,001 P– P1,088,001
Fair values of assets carried atmamortized cost/cost(a)
Investment securities at amortized cost
Government bonds P113,070,656 P– P– P113,070,656
Private bonds 51,304,523 – – 51,304,523
Loans and receivables
Corporate and commercial loans – – 423,191,284 423,191,284
Consumer loans – – 59,188,709 59,188,709
Trade-related loans – – 10,819,193 10,819,193
Others – – 39,177 39,177
Sales contracts receivable – – 224,080 224,080
Investment properties(b)
Land – – 2,516,447 2,516,447
Buildings and improvements – – 1,455,041 1,455,041
P164,375,179 P– P497,433,931 P661,809,110
Fair values of liabilities carried at amortized cost(a)
Deposit liabilities P– P– P302,112,818 P302,112,818
Bills payable – – 35,630,879 35,630,879
Bonds payable – – 37,980,269 37,980,269
– – 375,723,966 375,723,966
P164,375,179 P– P121,709,965 P286,085,144
(b) valued as of December 31, 2019

28 CHINA BANKING CO RPORATI ON

 Parent Company
2018
Level 1 Level 2 Level 3 Total
Recurring fair value measurements(a)
Financial assets at FVPL
Held-for-trading
Government bonds P492,521 P141,372 P− P633,893
Treasury notes − 838,662 − 838,662
Treasury bills − 1,214,170 − 1,214,170
Private bonds 2,282,598 − − 2,282,598
Quoted equity shares 1,312,625 − − 1,312,625
Derivative assets − 407,848 − 407,848
Financial assets at FVOCI
Government bonds 3,033,686 5,107,673 − 8,141,359
Quoted private bonds 1,676 − − 1,676
Quoted equity shares 51,610 − − 51,610
P7,174,716 P7,709,725 P− P14,884,441
Financial liabilities at FVPL
Derivative liabilities P− P455,150 P− P455,150
P− P455,150 P− P455,150
Fair values of assets carried at amortized cost/cost(a)
HTM financial assets
Government bonds P102,006,641 P− P− P102,006,641
Private bonds 52,509,703 − − 52,509,703
Loans and receivables
Corporate and commercial loans − − 357,613,633 357,613,633
Consumer loans − − 46,749,579 46,749,579
Trade-related loans − − 12,772,774 12,772,774
Others − − 45,185 45,185
Sales contracts receivable − − 178,486 178,486
Investment properties(b)
Land − − 4,225,706 4,225,706
Buildings and improvements − − 974,119 974,119
P154,516,344 P− P422,559,482 P577,075,826
Fair values of liabilities carried at amortized cost
Deposit liabilities P− P− P243,898,397 P243,898,397
(a) valued as of December 31, 2018

There were no transfers between Level 1 and Level 2 fair value measurements and no transfers into and out of Level 3 fair value measurements
in 2019 and 2018.

The inputs used in the fair value measurement based on Level 2 are as follows:

Government securities - interpolated rates based on market rates of benchmark securities as of reporting date.

Private bonds and commercial papers - quoted market price of comparable investments with credit risk premium that is insignificant to the
entire fair value measurement.

29
 Derivative assets and liabilities - fair values are calculated by reference to the prevailing interest differential and spot exchange rate as of the
reporting date, taking into account the remaining term to maturity of the derivative assets and liabilities.

Inputs used in estimating fair values of financial instruments carried at cost and categorized under Level 3 include risk-free rates and
applicable risk premium.

The fair values of the Group’s and Parent Company’s investment properties have been determined by the appraisal method by independent
external and in-house appraisers based on highest and best use of property being appraised. Valuations were derived on the basis of recent
sales of similar properties in the same areas as the investment properties and taking into account the economic conditions prevailing at the
time the valuations were made and comparability of similar properties sold with the property being valued.

The table below summarizes the valuation techniques used and the significant unobservable inputs valuation for each type of investment
properties held by the Group and the Parent Company:

Valuation Techniques Significant Unobservable Inputs

Land Market Data Approach Price per square meter, size, location, shape, time
element and corner influence
Land and Building Market Data Approach and Cost Approach Reproduction Cost New

Descriptions of the valuation techniques and significant unobservable inputs used in the valuation of the Group and the Parent Company’s
investment properties are as follows:

Valuation Techniques
Market Data Approach A process of comparing the subject property being appraised to similar comparable properties recently
sold or being offered for sale.
Cost Approach It is an estimate of the investment required to duplicate the property in its present condition. It is reached
by estimating the value of the building “as if new” and then deducting the depreciated cost. Fundamental
to the Cost Approach is the estimate of Reproduction Cost New of the improvements.

Significant Unobservable Inputs

Reproduction Cost New The cost to create a virtual replica of the existing structure, employing the same design and
similar building materials.

Size Size of lot in terms of area. Evaluate if the lot size of property or comparable conforms to the
average cut of the lots in the area and estimate the impact of lot size differences on land value.

Shape Particular form or configuration of the lot. A highly irregular shape limits the usable area whereas
an ideal lot configuration maximizes the usable area of the lot which is associated in designing
an improvement which conforms with the highest and best use of the property.

Location Location of comparative properties whether on a Main Road, or secondary road. Road width
could also be a consideration if data is available. As a rule, properties located along a Main
Road are superior to properties located along a secondary road.

Time Element “An adjustment for market conditions is made if general property values have appreciated or
depreciated since the transaction dates due to inflation or deflation or a change in investors’
perceptions of the market over time”. In which case, the current data is superior to historic
data.

Discount Generally, asking prices in ads posted for sale are negotiable. Discount is the amount the seller
or developer is willing to deduct from the posted selling price if the transaction will be in cash
or equivalent.

Corner influence Bounded by two (2) roads.

30 CHINA BANKING CO RPORATI ON

6. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s activities are principally related to the profitable use of financial instruments. Risks are inherent in these activities but are
managed by the Group through a rigorous, comprehensive and continuous process of identification, measurement, monitoring and mitigation
of these risks, partly through the effective use of risk and authority limits and thresholds, process controls and monitoring, and independent
controls. As reflected in its corporate actions and organizational improvements, the Group has placed due importance on expanding and
strengthening its risk management process and considers it as a vital component to the Group’s continuing profitability and financial stability.
Central to the Group’s risk management process is its adoption of a risk management program intended to avoid unnecessary risks, manage
and mitigate inherent risks and maximize returns from taking acceptable risks necessary to sustain its business viability and good financial
position in the market.

The key financial risks that the Group faces are: credit risk, market risk and liquidity risk. The Group’s risk management objective is primarily
focused on controlling and mitigating these risks. The Parent Company and its subsidiaries manage their respective financial risks separately.
The subsidiaries, particularly CBSI, have their own risk management processes but are structured similar to that of the Parent Company. To
a large extent, the respective risk management programs and objectives are the same across the Group. The severity of risk, materiality,
and regulations are primary considerations in determining the scope and extent of the risk management processes put in place for the
subsidiaries.

Risk Management Structure

The BOD of the Parent Company is ultimately responsible for the oversight of the Parent Company’s risk management processes. On
the other hand, the risk management processes of the subsidiaries are the separate responsibilities of their respective BODs. The BOD
of the Parent Company created a separate board-level independent committee with explicit authority and responsibility for managing and
monitoring risks.

The BOD has delegated to the Risk Oversight Committee (ROC) the implementation of the risk management process which includes, among
others, determining the appropriate risk mitigating strategies and operating principles, adoption of industry standards, development of risk
metrics, monitoring of key risk indicators, and the imposition of risk parameters. The ROC is composed of three members of the BOD, two
of whom are independent directors.

The Risk Management Group (RMG) is the operating unit of the ROC primarily responsible for the implementation of the risk management
strategies approved by the Board of Directors. The implementation cuts across all departments of the Parent Company and involves all
of the Parent Company’s financial instruments, whether “on-books” or “off-books.” The RMG is likewise responsible for monitoring the
implementation of specific risk control procedures and enforcing compliance thereto. The RMG is also directly involved in the day-to-day
monitoring of material risks ensuring that the Parent Company, in its transactions and dealings, engages only in risk taking activities duly
approved by the ROC. The RMG also ensures that relevant information are accurately and completely captured on a timely basis in the
management reporting system of the Parent Company. The RMG regularly reports the results of the risk measurements to the ROC. The
RMG is headed by the Chief Risk Officer (CRO).

Apart from RMG, each business unit has created and put in place various process controls which ensure that all the external and internal
transactions and dealings of the unit are in compliance with the unit’s risk management objectives.
The Internal Audit Division also plays a crucial role in risk management primarily because it is independent of the business units and reports
exclusively to the Audit Committee which, in turn, is comprised of independent directors. The Internal Audit Division focuses on ensuring
that adequate controls are in place and on monitoring compliance to controls. The regular audit covers all processes and controls, including
those under the risk management framework handled by the RMG. The audit of these processes and controls is undertaken at least annually.
The audit results and exceptions, including recommendations for their resolution or improvement, are discussed initially with the business
units concerned before these are presented to the Audit Committee.

Risk Management Reporting

The CRO reports to the ROC and is a resource to the Management Committee (ManCom) and the Credit Committee (CreCom). The CRO
reports on key risk indicators and specific risk management issues that would need resolution from top management. This is undertaken
after the risk issues and key risk indicators have been discussed with the business units concerned. The RMG’s function, particularly, that of
the CRO, as well as the Board’s risk oversight responsibilities are articulated under BSP Circular No. 971, Guidelines on Risk Governance.

The key risk indicators were formulated on the basis of the financial risks faced by the Parent Company. These indicators contain information
from all business units that provide measurements on the level of the risks taken by the Parent Company in its products, transactions and
financial structure. Among others, the report on key risk indicators includes information on the Parent Company’s aggregate credit exposure,
credit metric forecasts, hold limit exceptions, Value-at-Risk (VaR), Maximum Cumulative Outflow (MCO) and Earnings-at-Risk (EAR) analysis,
utilization of market and credit limits and thresholds, liquidity risk limits and ratios, overall loan loss provisioning and risk profile changes.

31
 Loan loss provisioning and credit limit utilization are, however, discussed in more detail in the Credit Committee. On a monthly basis, detailed
reporting of industry, customer and geographic risks is included in the discussion with the ROC. A comprehensive risk report is presented to
the BOD on a periodic basis for an overall assessment of the level of risks taken by the Bank. On the other hand, the Chief Audit Executive
reports to the Audit Committee on a monthly basis on the results of branch or business unit audits and for the resolution of pending but
important internal audit issues.

Risk Mitigation
The Parent Company uses derivatives to manage exposures in its financial instruments resulting from changes in interest rates and foreign
currencies exposures. However, the nature and extent of use of these financial instruments to mitigate risks are limited to those allowed by
the BSP for the Parent Company and its subsidiaries. For interest rate risk from the bonds payable to IFC (Note 18), the Parent Company
entered into a pay-fixed, receive-floating interest rate swap (Note 26) with the same principal terms to hedge the exposure to variable cash
flow payments. The hedge relationship would eliminate the risk that variability in the floating rates will compress the net interest margin. The
IRS designated as hedge shall be reflected in the Earnings-at-Risk report of RMG.

To further mitigate risks throughout its different business units, the Parent Company formulates risk management policies and continues to
improve its existing policies. These policies further serve as the framework and set of guidelines in the creation or revisions of operating
policies and manuals for each business unit. In the process design and implementation, preventive controls are preferred over detection
controls. Clear delineation of responsibilities and separation of incompatible duties among officers and staff, as well as, among business units
are reiterated in these policies. To the extent possible, reporting and accounting responsibilities are segregated from units directly involved
in operations and front line activities (i.e., players must not be scorers). This is to improve the credibility and accuracy of management
information. Any inconsistencies in the operating policies and manuals with the risk framework created by the RMG are taken up and
resolved in the ROC and ManCom.

Based on the approved Operational Risk Assessment Program, RMG spearheaded the bankwide (all Head Office units and branches) risk
identification and self-assessment process. This would enable determination of priority risk areas, assessment of mitigating controls in place,
and institutionalization of additional measures to ensure a controlled operating environment. RMG was also mandated to maintain and
update the Parent Company’s Centralized Loss Database wherein all reported incidents of losses shall be encoded to enable assessment of
weaknesses in the processes and come up with viable improvements to avoid recurrence.

Monitoring and controlling risks are primarily performed based on various limits and thresholds established by the top management covering
the Group’s transactions and dealings. These limits and thresholds reflect the Group’s business strategies and market environment, as well
as, the levels of risks that the Group is willing to tolerate, with additional emphasis on selected industries. In addition, the Parent Company
monitors and measures the overall risk-bearing capacity in relation to the aggregate risk exposure across all risk types and activities.

Liquidity and interest rate risk exposures are measured and monitored through the Maximum Cumulative Outflow and Earnings-at-Risk
reports from the Asset and Liability Management (ALM) system. It was implemented in 2013 and was upgraded in 2018 to a new version
which include modules for calculating Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). The system also has a Funds
Transfer Pricing module used by the Treasury Group and Corporate Planning Group.

For the measurement of market risk exposures, the Bank uses Historical Simulation VaR approach for all treasury traded instruments,
including fixed income bonds, foreign exchange swaps and forwards, interest rate swaps and equity securities. Market risk exposures are
measured and monitored through reports from the Market Risk Management System which has been implemented in 2018 to enhance risk
measurement and automate daily reporting.

BSP issued Circular No. 639 dated January 15, 2009 which mandated the use of the Internal Capital Adequacy Assessment Process (ICAAP)
by all universal and commercials banks to determine their minimum required capital relative to their business risk exposures. In this regard,
the Board approved the engagement of the services of a consultant to assist in the bank-wide implementation and embedding of the ICAAP,
as provided for under Pillar 2 of Basel II and BSP Circular No. 639.

On April 3, 2019, the BOD approved the changes in the trigger events for the review of Capital Ratios MAT and the methodology for the CET1
ratio limit and the Management Action Trigger (MAT) on capital ratios. There were no changes made in the Priority Risk Areas of the Parent
Company and the approved trigger events for the review of Priority Risks.

The Parent Company submitted its annually updated ICAAP document, in compliance with BSP requirements on March 29, 2019. The
document disclosed that the Parent Company has an appropriate level of internal capital relative to the Group’s risk profile.

For this submission, the Parent Company retained the Pillar 1 Plus approach using the Pillar 1 capital as the baseline. The process of
allocating capital for all types of risks above the Pillar 1 capital levels includes quantification of capital buffer for Pillar 2 risks under normal
business cycle/condition, in addition to the quantification based on the results of the Integrated Stress Test (IST). The adoption of the IST
allows the Parent Company to quantify its overall vulnerability to market shocks and operational losses in a collective manner driven by events
rather than in silo. The capital assessment in the document discloses that the Group and the Parent Company has appropriate and sufficient
level of internal capital.

32 CHINA BANKING CO RPORATI ON

Credit Risk

Credit Risk and Concentration of Assets and Liabilities and Off-Balance Sheet Items
Credit risk is the risk of financial loss on account of a counterparty to a financial product failing to honor its obligation. The Group faces
potential credit risks every time it extends funds to borrowers, commits funds to counterparties, guarantees the paying performance of its
clients, invests funds to issuers (i.e., investment securities issued by either sovereign or corporate entities) or enters into either market-traded
or over-the-counter derivatives, through implied or actual contractual agreements (i.e., on or off-balance sheet exposures). The Group
manages its credit risk at various levels (i.e., strategic level, portfolio level down to individual credit or transaction).

The Group established risk limits and thresholds for purposes of monitoring and managing credit risk from individual counterparties and/
or groups of counterparties, major industries, as well as countries. It also conducts periodical assessment of the creditworthiness of its
counterparties. In addition, the Group obtains collateral where appropriate, enters into master netting agreements and collateral arrangements
with counterparties, and limits the duration of exposures.

The Parent Company has four credit risk rating models in place: for corporate borrowers, for non-consumer individual borrowers and small &
medium enterprises (SMEs), for financial institutions, for sovereign / country exposures. In addition, it also has three scoring models: for auto
and housing loan applicants, and for credit card applicants.

In compliance with BSP requirements, the Parent Company established an internal Credit Risk Rating System (ICRRS) for the purpose of
measuring credit risk for corporate borrowers in a consistent manner, as accurately as possible, and thereafter uses the risk information for
business and financial decision making. The ICRRS covers corporate borrowers with total assets, total facilities, or total credit exposures
amounting to P15.00 million and above.

Further, the ICRRS was designed within the technical requirements defined under BSP Circular No. 439. It has two components, namely:
a) Borrower Risk Rating which provides an assessment of the creditworthiness of the borrower, without considering the proposed facility
and security arrangements, and b) Loan Exposure Ratio which provides an assessment of the proposed facilities as mitigated or enhanced
by security arrangements.

On February 6, 2019, the Board of Directors approved the recalibrated ICRRS model. Among the changes made was in the rating scale
which was expanded from ten to fourteen rating grades, ten of which fall under unclassified accounts, with the remaining four falling under
classified accounts in accordance with regulatory provisioning guidelines.

The Parent Company launched in 2011 the Borrower Credit Score (BCS), a credit scoring system designed for retail small and medium
entities and individual loan accounts. In 2018, RMG completed the statistical validation of the BCS using the same methodology applied to
the validation of the corporate risk rating model. The validation process was conducted with the assistance of Teradata which provided the
analytics platform, tools and technical guidance for both credit model performance assessment and recalibration.

The CAMELOT rating system was approved by the BOD in 2006 to specifically assess Philippine universal, commercial and thrift banks. In
2009, the Parent Company implemented the rating system for rural and cooperative banks as well as the rating system for foreign financial
institutions.

The Parent Company also developed a Sovereign Risk Rating Model, which provided the tool for the Parent Company to assess the strength
of the country rated in reference to its economic fundamentals, fiscal policy, institutional strength, and vulnerability to extreme events. The
Model was approved by the Board on September 7, 2018.

The scorecards for auto and housing loans were officially launched in November 2016, adopting the models developed by CBS with a third-
party consultant, and utilizing internally developed software interfaces for their implementation.

For the Bank’s credit cards, starting September 2017, Transunion score is being used in lieu of an acquisition scorecard to determine
application acceptance in conjunction with other credit acceptance criteria.

Excessive Risk Concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographic region, or
have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic,
political or other conditions. Concentrations indicate the relative sensitivity of the Parent Company’s performance to developments affecting
a particular industry or geographical location.

In order to avoid excessive concentrations of risk, the Parent Company’s policies and procedures include specific guidelines focusing on
maintaining a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

33
 The distribution of the Group’s and Parent Company’s assets and liabilities, and credit commitment items by geographic region as of
December 31, 2019 and 2018 (in millions) follows:

Consolidated
2019 2018
Assets Liabilities Commitment Assets Liabilities Commitment
Geographic Region
Philippines P871,434 P839,979 P139,879 P741,331 P743,613 P87,789
Asia 15,110 6,717 8,658 14,965 1,386 27,313
Europe 39,071 10,116 27,978 18,411 2,859 3,634
United States 10,185 321 7,483 68,277 21,107 2,548
Others 1,447 4,844 87 1,313 5,821 38
P937,247 P861,977 P184,085 P844,297 P774,786 P121,322

Parent Company
2019 2018
Assets Liabilities Commitment Assets Liabilities Commitment
Geographic Region
Philippines P774,207 P749,395 P139,392 P689,382 P660,706 P87,077
Asia 15,110 6,717 8,658 14,965 1,386 27,313
Europe 39,071 10,116 27,978 18,411 2,859 3,634
United States 10,185 321 7,483 28,369 17,638 2,548
Others 1,447 4,844 87 1,313 5,821 38
P840,020 P771,393 P183,598 P752,440 P688,410 P120,610

Information on credit concentration as to industry of loans and receivables is presented in Note 10 to the financial statements.

Maximum exposure to credit risk

The tables below provide the analysis of the maximum exposure to credit risk of the Group and the Parent Company’s financial instruments,
excluding those where the carrying values as reflected in the balance sheets and related notes already represent the financial instrument’s
maximum exposure to credit risk, before and after taking into account collateral held or other credit enhancements:

Consolidated
2019
Financial effect
of collateral or
Gross maximum credit
exposure Net exposure enhancement
Credit risk exposure relating to on-balance sheet items
are as follows
Loans and receivables P568,919,164 P319,163,000 P249,756,164
Interbank loans receivable and SPURA 17,036,460 – 17,036,460
Sales contracts receivable 1,162,106 – 1,162,106
P587,117,730 P319,163,000 P267,954,730

34 CHINA BANKING CO RPORATI ON

 Consolidated
2018
Financial effect
of collateral or
Gross maximum credit
exposure Net exposure enhancement
Credit risk exposure relating to on-balance sheet items
are as follows
Loans and receivables P505,804,955 P275,165,316 P230,639,639
Interbank loans receivable and SPURA 10,000,000 – 10,000,000
Sales contracts receivable 1,040,939 – 1,040,939
P516,845,894 P275,165,316 P241,680,578

Parent Company
2019
Financial effect
of collateral or
Gross maximum credit
exposure Net exposure enhancement
Credit risk exposure relating to on-balance sheet items
are as follows
Loans and receivables P502,930,197 P289,396,593 P213,533,604
Interbank loans receivable and SPURA 10,027,609 – 10,027,609
Sales contracts receivable 235,049 – 235,049
P513,192,855 P289,396,593 P223,796,262

Parent Company
2018
Financial effect
of collateral or
Gross maximum credit
exposure Net exposure enhancement
Credit risk exposure relating to on-balance sheet items
are as follows
Loans and receivables P441,432,156 P249,012,090 P192,420,066
Interbank loans receivable and SPURA 7,000,000 – 7,000,000
Sales contracts receivable 199,692 – 199,692
P448,631,848 P249,012,090 P199,619,758

For the Group, the fair values of collateral held for loans and receivables and sales contracts receivable amounted to P281.92 billion and
P2.38 billion, respectively, as of December 31, 2019 and P330.43 billion and P1.60 billion, respectively, as of December 31, 2018.

For the Parent Company, the fair values of collateral held for loans and receivables and sales contracts receivable amounted to P245.70 billion
and P0.91 billion, respectively, as of December 31, 2019 and P302.16 billion and P1.47 billion, respectively, as of December 31, 2018.

Credit risk, in respect of derivative financial products, is limited to those with positive fair values, which are included under financial assets
at FVPL (Note 9). As a result, the maximum credit risk, without taking into account the fair value of any collateral and netting agreements,
is limited to the amounts on the balance sheet plus commitments to customers such as unused commercial letters of credit, outstanding
guarantees and others as disclosed in Note 31 to the financial statements.

35
 Collateral and other credit enhancements
The amount and type of collateral required depends on an assessment of the credit risk of the counterparty. Guidelines are implemented
with regard to the acceptability of types of collateral and valuation parameters.

The main types of collateral obtained are as follows:

• For securities lending and reverse repurchase transactions - cash or securities
• For consumer lending - real estate and chattel over vehicle
• For corporate lending and commercial lending- real estate, chattel over properties, assignment of deposits, shares of stocks, bonds,
and guarantees

Management requests additional collateral in accordance with the underlying agreement and takes into consideration the market value of
collateral during its review of the adequacy of allowance for credit losses.

It is the Group’s policy to dispose of repossessed properties in an orderly fashion. The proceeds are used to reduce or repay the outstanding
claim. In most cases, the Parent Company does not occupy repossessed properties for business use.

Collateral valuation
To mitigate its credit risks on financial assets, the Group seeks to use collateral, where possible. The collateral comes in various forms, such
as cash, securities, letters of credit/guarantees, real estate, receivables, inventories, other non-financial assets and credit enhancements
such as netting agreements. Collateral, unless repossessed, is not recorded on the Group’s balance sheet. However, the fair value of
collateral affects the calculation of loss allowances. It is generally assessed, at a minimum, at inception and re-assessed on an annual basis.
To the extent possible, the Group uses active market data for valuing financial assets held as collateral. Other financial assets which do
not have readily determinable market values are valued using models. Non-financial collateral, such as real estate, is valued based on data
provided by internal or external appraisers.

Credit quality per class of financial assets

The credit quality of financial assets is managed by the Group using an internal credit rating system for the purpose of measuring credit risk
in a consistent manner as accurately as possible. The model on risk ratings is assessed regularly because the Group uses this information
as a tool for business and financial decision making. Aside from the periodic review by the Bank’s Internal Audit Group, the Bank likewise
engaged the services of third-party consultants in 2014, 2015, and 2017 for purposes of conducting an independent validation of the credit
risk rating model.

It is the Parent Company’s policy to maintain accurate and consistent risk ratings across the credit portfolio. This facilitates focused
management of the applicable risks and the comparison of credit exposures across all lines of business, geographic regions and products.
The rating system is supported by a variety of financial analytics, combined with processed market information to provide the main inputs for
the measurement of counterparty risk. All internal risk ratings are tailored to the various categories and are derived in accordance with the
Parent Company’s rating policy. The attributable risk ratings are assessed and monitored regularly.

The rating categories are further described below.

Neither Past Due nor Impaired

High Grade

This includes all borrowers whose ratings are considered as Low Risk and/or those where the exposures are covered by Government
Guarantee. Thus, these borrowers have a very low probability of going into default in the coming year.

In terms of borrower credit ratings, these include the following:

A. ICRRS-Covered
• Borrower Risk Rating (BRR) 1 (Exceptional)
• BRR 2 (Excellent)
• BRR 3 (Strong)
• BRR 4 (Good)
B. BCS-Covered
• Strong

36 CHINA BANKING CO RPORATI ON

Generally, a Low Risk (High Grade) rating is indicative of a high capacity to fulfill its obligations supported by robust financials (i.e., profitable,
with returns considerably higher than the industry, elevated capacities to service its liabilities), gainful positioning in growing industries (i.e.,
participation in industries where conditions are very favorable and in which they are able to get a good share of the market), and very strong
leadership providing clear strategic direction and/or excellent training and development programs.

Standard Grade

This includes all borrowers whose ratings are considered as Moderate Risk and are seen to withstand typical swings in the economic cycle
without going into default. However, any prolonged unfavorable economic period would create deterioration that may already be beyond
acceptable levels.
In terms of borrower credit ratings, these include the following:
A. ICRRS-Covered
• BRR 5 (Satisfactory)
• BRR 6 (Acceptable)
• BRR 7 (Fair)
B. BCS-Covered
• Satisfactory
• Acceptable

Generally, a Moderate Risk (Standard Grade) rating signifies a borrower whose financial performance is sufficient to service obligations and is
at par with competitors in the industry. In terms of management, it is run by executives with adequate personal and professional qualifications
and sufficient experience in similar companies. In terms of growth potential, it is engaged in an industry with stable outlook, supportive of
continuing operations.

Sub-Standard Grade

This includes all borrowers whose ratings are considered as High Risk and show an elevated risk for default in the next year.

In terms of borrower credit ratings, these includes the following:

Unclassified
A. ICRRS-Covered
• BRR 8 (Watchlist)
• BRR 9 (Speculative)
• BRR 10 (Highly Speculative)
B. BCS-Covered
• Watchlist

Adversely Classified
A. ICRRS and BCS--Covered
• BRR 11 (Especially Mentioned)
• BRR 12 (Substandard)
• BRR 13 (Doubtful)
• BRR 14 (Loss)

For accounts that are Unclassified, a High Risk (Sub-Standard Grade) rating is indicative of borrowers where there are unfavorable industry
or company-specific factors. This may be financial in nature (i.e. marginal operating performance, returns that are lower than those of the
industry, and/or diminished capacity to pay off obligations that are due), related to management quality (including negative information
regarding the company or specific executives) and/or unfavorable industry conditions. The borrower might find it very hard to cope with any
significant economic downturn and a default in such a case is more than a possibility. These accounts require a closer monitoring for any
signs of further deterioration, warranting adverse classification.

Adversely Classified accounts are automatically considered as high-risk and generally includes past due accounts. However, in some cases,
even accounts that are neither past due nor impaired, qualifies for adverse classification. Reasons for this include among others the following:
consecutive net losses, emerging weaknesses in terms of cash flow, negative equity, and/or breach in the covenants per term loan agreement.

For consumer loans (i.e., auto, housing, credit card) that are covered by application scorecards which provide either a pass/fail score, the
basis for credit quality rating is the BSP classification for those that are booked as Current (i.e. Standard Grade if Unclassified and Sub
Standard Grade if Classified and impairment status for those that are booked as Past Due / ITL.

37
 The financial assets are also grouped according to stage whose description is explained as follows:

Stage 1 - those that are considered current and up to 30 days past due, and based on change in rating, delinquencies and payment history,
do not demonstrate significant increase in credit risk.

Stage 2 - those that, based on change in rating, delinquencies and payment history, demonstrate significant increase in credit risk, and/or are
considered more than 30 days past due but does not demonstrate objective evidence of impairment as of reporting date.

Stage 3 - those that are considered in default or demonstrate objective evidence of impairment as of reporting date.

The following tables illustrate the Group’s and the Parent Company’s credit exposures.

Consolidated 2019
ECL Staging
Stage 1 Stage 2 Stage 3
Corporate and commercial lending 12-month ECL Lifetime ECL Lifetime ECL Total
Neither past due nor impaired
High grade 50,587 4,271 - 54,858
Standard grade 295,112 5,899 - 301,011
Sub-Standard 88,999 8,542 - 97,541
Unrated 724 1 - 725
Past due but not impaired 13 725 - 738
Past due and impaired - - 4,784 4,784
Gross carrying amount 435,435 19,438 4,784 459,657

Consolidated 2019
ECL Staging
Stage 1 Stage 2 Stage 3
Consumer Lending 12-month ECL Lifetime ECL Lifetime ECL Total
Neither past due nor impaired
High grade 40,542 - - 40,542
Standard grade 48,761 744 - 49,505
Sub-Standard 7,433 435 - 7,868
Unrated 2,280 1,862 - 4,142
Past due but not impaired 106 1,562 - 1,668
Past due and impaired - - 3,497 3,497
Gross carrying amount 99,122 4,603 3,497 107,222

Consolidated 2019
ECL Staging
Stage 1 Stage 2 Stage 3
Trade-related Lending 12-month ECL Lifetime ECL Lifetime ECL Total
Neither past due nor impaired
High grade 250 - - 250
Standard grade 8,142 37 - 8,179
Sub-Standard 2,169 37 - 2,206
Unrated - - - -
Past due but not impaired 32 - - 32
Past due and impaired - - 236 236
Gross carrying amount 10,593 74 236 10,903

38 CHINA BANKING CO RPORATI ON

 Consolidated 2019
ECL Staging
Stage 1 Stage 2 Stage 3
Others 12-month ECL Lifetime ECL Lifetime ECL Total
Neither past due nor impaired
High grade 8 - - 8
Standard grade - - - -
Sub-Standard - - - -
Unrated 34 - - 34
Past due but not impaired - - - -
Past due and impaired - - 5 5
Gross carrying amount 42 - 5 47

Consolidated 2018
ECL Staging
Corporate and commercial lending Stage 1 Stage 2 Stage 3 Total
12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade P65,022 P- P- P65,022
Standard grade 234,159 2,341 - 236,500
Sub-Standard 90,877 14,428 - 105,305
Unrated 438 8 - 446
Past due but not impaired 44 648 - 692
Past due and impaired - - 3,835 3,835
Gross carrying amount P390,540 P17,425 P3,835 P411,800

Consolidated 2018
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Consumer Lending 12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade P32,661 P- P- P32,661
Standard grade 44,389 600 - 44,989
Sub-Standard 1,309 563 - 1,872
Unrated 1,782 1,613 - 3,395
Past due but not impaired 551 435 - 986
Past due and impaired - - 3,313 3,313
Gross carrying amount P80,692 P3,211 P3,313 P87,216

39
 Consolidated 2018
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Trade-related Lending 12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade P1,239 P- P- P1,239
Standard grade 9,371 9 - 9,380
Sub-Standard 1,500 1,675 - 3,175
Unrated - - - -
Past due but not impaired 0 - - 0
Past due and impaired - - 23 23
Gross carrying amount P12,110 P1,684 P23 P13,817

Consolidated 2018
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Others 12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade P12 P- P- P12
Standard grade 0 - - 0
Sub-Standard 0 - - 0
Unrated 39 - - 39
Past due but not impaired 1 5 - 6
Past due and impaired - - - -
Gross carrying amount P52 P5 P- P57

Parent Company 2019

ECL Staging
Corporate and commercial lending Stage 1 Stage 2 Stage 3
12-month ECL Lifetime ECL Lifetime ECL Total
Neither past due nor impaired
High grade 29,392 4,271 - 33,663
Standard grade 295,112 5,155 - 300,267
Sub-Standard 88,999 8,528 - 97,527
Unrated 724 1 - 725
Past due but not impaired 12 50 - 62
Past due and impaired - - 2,231 2,231
Gross carrying amount 414,239 18,005 2,231 434,475

40 CHINA BANKING CO RPORATI ON

 Parent Company 2019
ECL Staging
Stage 1 Stage 2 Stage 3
Consumer Lending 12-month ECL Lifetime ECL Lifetime ECL Total
Neither past due nor impaired
High grade 224 - - 224
Standard grade 48,761 714 - 49,475
Sub-Standard 7,433 430 - 7,863
Unrated 2,280 1,862 - 4,142
Past due but not impaired - 624 - 624
Past due and impaired - - 2,420 2,420
Gross carrying amount 58,698 3,630 2,420 64,748

Parent Company 2019

ECL Staging
Stage 1 Stage 2 Stage 3
Trade−related Lending 12-month ECL Lifetime ECL Lifetime ECL Total
Neither past due nor impaired
High grade 250 - - 250
Standard grade 8,142 37 - 8,179
Sub-Standard 2,169 37 - 2,206
Unrated - - - -
Past due but not impaired 32 - - 32
Past due and impaired - - 236 236
Gross carrying amount 10,593 74 236 10,903

Parent Company 2019

ECL Staging
Stage 1 Stage 2 Stage 3 Total
Others 12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade - - - -
Standard grade - - - -
Sub-Standard - - - -
Unrated 34 - - 34
Past due but not impaired - - - -
Past due and impaired - - - -
Gross carrying amount 34 - - 34

41
 Parent Company 2018
ECL Staging
Corporate and commercial lending Stage 1 Stage 2 Stage 3 Total
12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade P38,025 P- P- P38,025
Standard grade 234,159 2,341 - 236,500
Sub-Standard 90,869 14,428 - 105,297
Unrated 438 8 - 446
Past due but not impaired 44 25 - 69
Past due and impaired - - 1,068 1,068
Gross carrying amount P363,535 P16,802 P1,068 P381,405

Parent Company 2018

ECL Staging
Stage 1 Stage 2 Stage 3 Total
Consumer Lending 12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade P18 P- P- P18
Standard grade 44,287 600 - 44,887
Sub-Standard 1,271 563 - 1,834
Unrated 1,782 1,613 - 3,395
Past due but not impaired 551 49 - 600
Past due and impaired - - 1,952 1,952
Gross carrying amount P47,909 P2,825 P1,952 P52,686

Parent Company 2018

ECL Staging
Stage 1 Stage 2 Stage 3 Total
Trade−related Lending 12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade P359 P- P- P359
Standard grade 9,371 9 - 9,380
Sub-Standard 1,500 1,675 - 3,175
Unrated - - - -
Past due but not impaired 0 - - 0
Past due and impaired - - 23 23
Gross carrying amount P11,230 P1,684 P23 P12,937

42 CHINA BANKING CO RPORATI ON

 Parent Company 2018
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Others 12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade P- P- P- P-
Standard grade - - - -
Sub-Standard - - - -
Unrated 39 - - 39
Past due but not impaired 1 - 1
Past due and impaired - -
Gross carrying amount P40 P- P- P40

Depository accounts with the BSP and counterparty banks, Trading and Investment Securities
For these financial assets, outstanding exposure is rated primarily based on external risk rating (i.e. Standard and Poor’s (S&P), otherwise,
rating is based on risk grades by a local rating agency or included under “Unrated”, when the counterparty has no available risk grade.

The external risk rating of the Group’s depository accounts with the BSP and counterparty banks, trading and investment securities, is
grouped as follows:

Credit Quality Rating External Credit Risk Rating Credit Rating Agency
High grade AAA, AA+, AA, AA− S&P
Aaa, Aa1, Aa2, Aa3 Moody’s
AAA, AA+, AA, AA− Fitch
Standard grade A+, A, A−, BBB+, BBB, BBB− S&P
A1, A2, A3, Baa1, Baa2, Baa3 Moody’s
A+, A, A−, BBB+, BBB, BBB− Fitch
Substandard grade BB+, BB, BB−, B/B+, CCC, R, SD & D S&P
Ba1, Ba2, Ba3, B1, B2, R, SD & D Moody’s
BB+, BB, BB−, B/B+, CCC, R, SD & D Fitch

Following is the credit rating scale applicable for foreign banks, and government securities (aligned with S&P ratings):
AAA − An obligor has extremely strong capacity to meet its financial commitments.

AA − An obligor has very strong capacity to meet its financial commitments. It differs from the highest−rated obligors at a minimal degree.

A − An obligor has strong capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than obligors in higher−rated categories.

BBB and below:

BBB − An obligor has adequate capacity to meet its financial commitments. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments.

BB − An obligor is less vulnerable in the near term than other lower−rated obligors. However, it faces major ongoing uncertainties and
exposure to adverse business, financial, or economic conditions which could lead to the obligor’s inadequate capacity to meet its financial
commitments.

B − An obligor is more vulnerable than the obligors rated ‘BB’, but the obligor currently has the capacity to meet its financial commitments.
Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitments.

43
 CCC − An obligor is currently vulnerable and is dependent upon favorable business, financial, and economic conditions for the obligor to
meet its financial commitments.

CC − An obligor is currently vulnerable. The rating is used when a default has not yet occurred, but expects default to be a virtual certainty,
regardless of the anticipated time to default.

R − An obligor is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision, the
regulators may have the power to favor one class of obligations over others or pay some obligations and not others.

SD and D − An obligor is in default on one or more of its financial obligations including rated and unrated financial obligations but excluding
hybrid instruments classified as regulatory capital or in non−payment according to terms.

Due from other banks and government securities

The external risk rating of the Group’s depository accounts with counterparty banks, trading and investment securities, is grouped as follows
(aligned with the Philippine Ratings System):

Credit Quality Rating External Credit Risk Rating

High grade PRSAAA, PRSAa+, PRSAa, PRSAa−
Standard grade PRSA+, PRSA, PRSA−, PRSBaa+, PRSBaa, PRSBaa−
Substandard grade PRSBa+, PRSBa, PRSBa−, PRSB+, PRSB, PRSB−, PRSCaa+, PRSCaa,
PRSCaa−, PRSCa+, PRSCa, PRSCa−, PRSC+, PRSC, PRSC−

PRSAaa − The obligor’s capacity to meet its financial commitment on the obligation is extremely strong.

PRSAa − The obligor’s capacity to meet its financial commitment on the obligation is very strong.

PRSA − With favorable investment attributes and are considered as upper−medium grade obligations. Although obligations rated ‘PRSA’
are somewhat more susceptible to the adverse effects of changes in economic conditions, the obligor’s capacity to meet its financial
commitments on the obligation is still strong.

PRSBaa − An obligation rated ‘PRS Baa’ exhibits adequate protection parameters. However, adverse economic conditions and changing
circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. PRSBaa−
rated issues may possess certain speculative characteristics.

PRSBa − An obligation rated ‘PRSBa’ is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing
uncertainties relating to business, financial or economic conditions, which could lead to the obligor’s inadequate capacity to meet its financial
commitment on the obligation.

PRSB − An obligation rated ‘PRSB’ is more vulnerable to nonpayment than obligations rated ‘PRSBa’, but the obligor currently has the
capacity to meet its financial commitment on the obligation. Adverse economic conditions will likely impair the obligor’s capacity to meet its
financial commitment on the obligation. The issue is characterized by high credit risk.

PRSCaa − An obligation rated ‘PRSCaa’ is presently vulnerable to nonpayment and is dependent upon favorable business, financial and
economic conditions for the obligor to meet its financial commitments on the obligation. In the event of adverse economic conditions, the
obligor is not likely to have the capacity to meet its financial commitment on the obligation. The issue is considered to be of poor standing
and is subject to very high credit risk.

PRSCa − An obligation rated “PRSCa” is presently highly vulnerable to nonpayment. Likely already in or very near default with some prospect
for partial recovery of principal or interest.

PRSC − An obligation is already in default with very little prospect for any recovery of principal or interest.

44 CHINA BANKING CO RPORATI ON

The succeeding tables show the credit exposure of the Group and the Parent Company related to these financial assets.

Consolidated 2019
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Investment securities at amortized cost 12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade 25,859 - - 25,859
Standard grade 108,989 336 - 109,325
Sub-Standard 1,183 - - 1,183
Unrated 15,721 8,302 - 24,023
Past due but not impaired - - - -
Impaired - - - -
Gross carrying amount 151,752 8,638 - 160,390

Consolidated 2019
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Financial assets at FVOCI 12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade 1,205 - - 1,205
Standard grade 22,822 - - 22,822
Sub-Standard 107 - - 107
Unrated 1,980 - - 1,980
Past due but not impaired - - - -
Impaired - - 19 19
Gross carrying amount 26,114 - 19 26,133

Consolidated 2018
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Investment securities at amortized cost 12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade P7,913 P108 P- P8,021
Standard grade 111,072 - - 111,072
Sub-Standard 1,703 - - 1,703
Unrated 40,765 1,396 152 42,313
Gross carrying amount P161,453 P1,504 P152 P163,109

45
 Consolidated 2018
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Financial assets at FVOCI 12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade P674 P- P- P674
Standard grade 9,371 - - 9,371
Sub-Standard - - - -
Unrated 55 2 - 57
Past due but not impaired - - - -
Past due and impaired - - - -
Gross carrying amount P10,100 P2 P- P10,102

Parent Company 2019

ECL Staging
Stage 1 Stage 2 Stage 3 Total
Investment securities at amortized cost 12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade 24,491 - - 24,491
Standard grade 106,682 336 - 107,018
Sub-Standard 1,183 - - 1,183
Unrated 15,721 8,302 - 24,023
Past due but not impaired - - - -
Impaired - - - -
Gross carrying amount 148,077 8,638 - 156,715

Parent Company 2019

ECL Staging
Stage 1 Stage 2 Stage 3 Total
Financial assets at FVOCI 12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade 555 - - 555
Standard grade 21,528 - - 21,528
Sub-Standard 107 - - 107
Unrated 1,980 - - 1,980
Past due but not impaired - - - -
Impaired - - - -
Gross carrying amount 24,170 - - 24,170

46 CHINA BANKING CO RPORATI ON

 Parent Company 2018
ECL Staging
Investment securities at amortized cost Stage 1 Stage 2 Stage 3 Total
12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade P7,235 P108 P- P7,343
Standard grade 103,873 - - 103,873
Sub-Standard 1,303 - - 1,303
Unrated 40,765 1,396 - 42,161
Gross carrying amount P153,176 P1,504 P- P154,680

Parent Company 2018

ECL Staging
Stage 1 Stage 2 Stage 3 Total
Financial assets at FVOCI 12-month ECL Lifetime ECL Lifetime ECL
Neither past due nor impaired
High grade P15 P- P- P15
Standard grade 8,141 - - 8,141
Sub-Standard - - - -
Unrated 55 2 - 57
Past due but not impaired - - - -
Past due and impaired - - - -
Gross carrying amount P8,211 P2 P- P8,213

Parent Company 2019

High Standard Substandard
Unrated Total
Grade Grade Grade
Due from BSP P− P88,110 P− P− P88,110
Due from other banks 374 8,249 3 20 8,646
Interbank loans receivable and SPURA − 10,028 − − 10,028
Financial assets at FVPL 3,510 11,580 483 2,871 18,444
P3,884 P117,967 P486 P2,891 P125,228

Parent Company 2018

High Substandard
Standard Grade Unrated Total
Grade Grade
Due from BSP P− P95,093 P− P− P95,093
Due from other banks 696 7,119 17 7 7,839
Interbank loans receivable and SPURA − 7,000 − − 7,000
Financial assets at FVPL 1,447 4,100 − 1,143 6,690
P2,143 P113,312 P17 P1,150 P116,622

47
 The following table presents the carrying amount of financial assets of the Group and Parent Company as of December 31, 2019 and 2018
that would have been considered past due or impaired if not renegotiated:

Consolidated Parent Company

2019 2018 2019 2018
Loans and advances to customers
Corporate and commercial lending P312,787 P507,9 21 P35,673 P40,029
Consumer lending 115,370 110,885 114,185 110,885
Total renegotiated financial assets P428,157 P618,806 P149,858 P150,914

Impairment assessment
The Group recognizes a credit loss allowance on a financial asset based on whether it has had a significant increase in credit risk since
initial recognition. Accordingly, the Group categorizes its financial assets into three categories: stage 1 – financial asset that has not had a
significant increase in credit risk; stage 2 – financial asset that has had a significant increase in credit risk; and stage 3 – financial asset in
default.

Generally, the Group assesses the presence of a significant increase in credit risk based on the number of notches that a financial asset’s
credit risk rating has declined. When applicable, the Group also applies a rebuttable presumption that the credit risk on a financial asset
has increased significantly since initial recognition when contractual payments are more than 30 days past due.

The Group defines a financial instrument as in default, which is fully aligned with the definition of credit impaired, in all cases when the
borrower becomes at least 90 days past due on its contractual payments. As a part of a qualitative assessment of whether a customer is in
default, the Group also considers a variety of instances that may indicate unlikeliness to pay. When such events occur, the Group carefully
considers whether the event should result in treating the customer as defaulted. An instrument is considered to be no longer in default (i.e.,
to have cured) when it no longer meets any of the default criteria for a consecutive period of 180 days (i.e. consecutive payments from the
borrowers for 180 days).

The criteria for determining whether credit risk has increased significantly vary by portfolio and include quantitative changes in probabilities of
default and qualitative factors such as downgrade in the credit rating of the borrowers and a backstop based on delinquency. The credit risk
of a particular exposure is deemed to have increased significantly since initial recognition if, based on the Group’s internal credit assessment,
the borrower or counterparty is determined to require close monitoring or with well-defined credit weaknesses. For exposures without internal
credit grades, if contractual payments are more than a specified days past due threshold (i.e. 30 days), the credit risk is deemed to have
increased significantly since initial recognition. Days past due are determined by counting the number of days since the earliest elapsed due
date in respect of which full payment has not been received. In subsequent reporting periods, if the credit risk of the financial instrument
improves such that there is no longer a SICR since initial recognition, the Bank shall revert to recognizing a 12-month ECL.

Further, the Group considers a financial asset as in default when (a) as a result of one or more loss events, there is objective evidence that
its recoverable value is less than its carrying amount; (b) it is classified as doubtful or loss under prudential reporting; (c) it is in litigation; and/
or (d) full repayment of principal and interest is unlikely without foreclosure of collateral, if any. When applicable, the Group also applies a
rebuttable presumption that default does not occur later than when a financial asset is 90 days past due unless the Group has reasonable
and supportable information to demonstrate that a more lagging default criterion is more appropriate.

The Group then measures the credit loss allowance on a financial instrument at an amount equal to 12-month expected credit losses for
items categorized as stage 1 and lifetime credit losses to items categorized as stage 2 and stage 3.

The Group modeled the following inputs to the expected credit loss formula separately. The formula is applied to each financial asset, with
certain exceptions wherein a collective or other general approach is applied:

Exposure at Default (EAD)

The Group defines EAD as the principal and interests that would not be collected assuming the borrower’s defaults during a future point in
time. The Bank computes for a financial asset’s EAD using the expected contractual cash flows during the contractual life of the financial
instrument. A financial asset’s EAD is defined as the sum of EAD from principal and EAD from interest.

48 CHINA BANKING CO RPORATI ON

Probability of default (PD)
The Group uses forward-looking PD estimates that are unbiased and probability-weighted using a range of possible outcomes. The PD
for each individual instrument is modelled based on historical data and is estimated based on current market conditions and reasonable
and supportable information about future economic conditions. The Bank segmented its credit exposures based on homogenous risk
characteristics and developed a corresponding PD methodology for each portfolio. The PD methodology for each relevant portfolio is
determined based on the underlying nature or characteristic of the portfolio, behavior of the accounts and materiality of the segment as
compared to the total portfolio. The Group’s PDs are mainly categorized into three: (a) corporate; (b) sovereign; and (c) retail.

Loss given default (LGD)

The Group’s LGD model considers certain factors such as the historical cash flow recovery and reasonable and supportable information
about future economic conditions, where appropriate. Generally, the model utilizes the Bank’s existing loan exposure rating system which is
designed to capture these factors as well as the characteristics of collaterals related to an exposure. In cases wherein this does not apply,
the Group looks into the standard characteristics of collaterals (e.g., car and housing loans) in order to estimate an LGD factor. In the case
of exposures without collaterals (e.g., securities), the Group uses internationally-accepted standard LGD factors.

Credit Review
In accordance with BSP Circular 855, credit reviews are conducted on loan accounts to evaluate whether loans are granted in accordance
with the Bank’s policies, to assess loan quality and appropriateness of classification and adequacy of loan loss provisioning. Results of credit
reviews are promptly reported to management to apprise them of any significant findings for proper corrective actions.

Market Risk
Market risk is the risk of loss that may result from changes in the value of a financial product. The Parent Company’s market risk originates
from its holdings of domestic and foreign−denominated debt securities, foreign exchange instruments, equities, foreign exchange derivatives
and interest rate derivatives.

The RMG of the Parent Company is responsible for assisting the ROC with its responsibility for identifying, measuring, managing and
controlling market risk. Market risk management measures the Parent Company market risk exposures through the use of VaR. VaR is a
statistical measure that estimates the maximum potential loss from a portfolio over a holding period, within a given confidence level.

VaR assumptions
The Parent Company calculates the VaR in trading activities. The Parent Company uses the Historical Simulation Full Valuation approach to
measure VaR for all treasury traded instruments, using a 99.00% confidence level and a 1−day holding period.

The use of a 99.00% confidence level means that, within a one day horizon, losses exceeding the VaR figure should occur, on average, not
more than once every hundred days. The validity of the VaR model is verified through back testing, which examines how frequently actual
and hypothetical daily losses exceeds daily VaR. The Parent Company measures and monitors the VaR and profit and loss on a daily basis.

Since VaR is an integral part of the Parent Company’s market risk management, VaR limits have been established for all trading positions and
exposures are reviewed daily against the limits by management. Further, stress testing is performed for monitoring extreme events.

Limitations of the VaR Methodology

The VaR models are designed to measure market risk in a normal market environment using equally weighted historical data. The use of
VaR has limitations because it is based on historical correlations and volatilities in market prices and assumes that future price movements
will follow the same distribution. Due to the fact that VaR relies heavily on historical data to provide information and may not clearly predict
the future changes and modifications of the risk factors, the probability of large market moves may be underestimated if changes in risk
factors fail to align with the assumptions. VaR may also be under− or over−estimated due to the assumptions placed on risk factors and the
relationship between such factors for specific instruments. Even though positions may change throughout the day, the VaR only represents
the risk of the portfolios at the close of each business day, and it does not account for any losses that may occur beyond the 99.00%
confidence level.

In practice, the actual trading results will differ from the VaR calculation and, in particular, the calculation does not provide a meaningful
indication of profits and losses in stressed market conditions. To determine the reliability of the VaR models, actual outcomes are monitored
regularly to test the validity of the assumptions and the parameters used in the VaR calculation. Market risk positions are also subject to
regular stress tests to ensure that the Group would withstand an extreme market event.

49
 A summary of the VaR position of the trading portfolio of the Parent Company is as follows:

Foreign
Interest Rate1 Exchange2 Price3 Interest Rate4 Interest Rate5
(In Millions)
2019
31 December P69.41 P21.89 P17.85 P12.53 P5.54
Average daily 82.81 25.42 23.89 8.75 7.78
Highest 134.67 73.41 42.90 14.60 16.15
Lowest 44.49 1.84 17.29 3.36 5.22

2018
31 December P43.62 P4.54 P21.78 P13.78 P10.65
Average daily 52.11 18.69 30.17 6.35 4.40
Highest 121.89 63.74 56.30 13.78 19.03
Lowest 21.47 2.53 18.29 3.18 0.60

1
Interest rate VaR for debt securities (Interest rate VaR for foreign currency denominated debt securities are translated to PHP using daily closing rate)
2
FX VaR is the bankwide foreign exchange risk
3
Price VaR for equity securities and futures
4
Interest rate VaR for FX swaps and FX forwards
5
Interest rate VaR for IRS

Interest Rate Risk

The Group’s interest rate risk originates from its holdings of interest rate sensitive assets and interest rate sensitive liabilities. The Parent
Company follows prudent policies in managing its exposures to interest rate fluctuations, and constantly monitors and discusses its exposure
in Asset and Liability Committee (ALCO) meetings held every week.

As of December 31, 2019 and 2018, 72.55% and 64.57% of the Group’s total loan portfolio, respectively, comprised of floating rate loans
which are repriced periodically by reference to the transfer pool rate which reflects the Group’s internal cost of funds. In keeping with banking
industry practice, the Group aims to achieve stability and lengthen the term structure of its deposit base, while providing adequate liquidity
to cover transactional banking requirements of customers.

Interest is paid on demand accounts, which constituted 24.76% and 22.81% of total deposits of the Parent Company as of December 31,
2019 and 2018, respectively.

Interest is paid on savings accounts and time deposits accounts, which constitute 30.56% and 44.68%, respectively, of total deposits of the
Parent Company as of December 31, 2019, and 35.56% and 41.64%, respectively, as of December 31, 2018.

Savings account interest rates are set by reference to prevailing market rates, while interest rates on time deposits and special savings
accounts are usually priced by reference to prevailing rates of short-term government bonds and other money market instruments, or, in the
case of foreign currency deposits, inter-bank deposit rates and other benchmark deposit rates in international money markets with similar
maturities.

50 CHINA BANKING CO RPORATI ON

The Group is likewise exposed to fair value interest rate risk due to its holdings of fixed rate government bonds as part of its financial assets at
FVOCI and FVTPL portfolios. Market values of these investments are sensitive to fluctuations in interest rates. The following table provides
for the average effective interest rates of the Group and of the Parent Company as of December 31, 2019 and 2018:

Consolidated Parent Company

2019 2018 2019 2018
Peso
Assets
Due from BSP 0.29% 0.17% 0.07% 0.06%
Due from banks 0.22% 0.26% 0.11% 0.11%
Investment securities* 5.47% 4.52% 5.47% 4.36%
Loans and receivables 7.09% 7.26% 6.89% 6.18%

Liabilities
Deposit liabilities 2.63% 1.96% 2.54% 1.71%
Bills payable 4.86% 3.59% 4.86% 3.59%
Bonds payable 3.02% – 3.02% –

USD
Assets
Due from banks 0.99% 0.75% 1.02% 0.61%
Investment securities* 3.58% 4.16% 3.56% 3.88%
Loans and receivables 4.13% 4.07% 4.07% 3.93%

Liabilities
Deposit liabilities 1.66% 1.48% 1.66% 1.45%
Bills payable 4.99% 2.89% 4.00% 2.86%
Bonds payable 1.71% – 1.71% –
* Consisting of financial assets at FVPL, Financial assets at FVOCI and Investment securities at amortized cost.

The repricing gap analysis method is used by the Group to measure the sensitivity of its assets and liabilities to interest rate fluctuations. This
analysis measures the Group’s susceptibility to changes in interest rates. The repricing gap is calculated by first distributing the assets and
liabilities contained in the Group’s balance sheet into tenor buckets according to the time remaining to the next repricing date (or the time
remaining to maturity if there is no repricing), and then obtaining the difference between the total of the repricing (interest rate sensitive) assets
and the total of repricing (interest rate sensitive) liabilities.

A gap is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets. A gap
is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate sensitive liabilities.

Accordingly, during a period of rising interest rates, a bank with a positive gap would be in a position to invest in higher yielding assets earlier
than it would need to refinance its interest rate sensitive liabilities. During a period of falling interest rates, a bank with a positive gap would
tend to see its interest rate sensitive assets repricing earlier than its interest rate sensitive liabilities, restraining the growth of its net income or
resulting in a decline in net interest income.

51
 The following tables set forth the repricing gap position of the Group and Parent Company as of December 31, 2019 and 2018 (in millions):

Consolidated
2019
Up to 3 >3 to 12 >12
Months Months Months Total
Financial Assets
Due from BSP P96,254 P− P3,921 P100,175
Due from other banks 9,901 − − 9,901
Investment securities 3,815 6,637 202,384 212,836
Loans and receivables 257,385 111,758 199,776 568,919
Total financial assets 367,355 118,395 406,081 891,831
Financial Liabilities
Deposit liabilities 313,164 37,636 424,628 775,428
Bills payable 18,409 14,972 − 33,381
Bonds payable − 7,394 30,000 37,394
Total financial liabilities 331,573 60,002 454,628 846,203
Repricing gap P35,782 P58,393 (P48,547) P45,628

Consolidated
2018
Up to 3 >3 to 12 >12
Months Months Months Total
Financial Assets
Due from BSP P101,89 0 P− P− P101,89 0
Due from other banks 9,455 − − 9,455
Investment securities 12,301 3,432 174,500 190,233
Loans and receivables 255,491 38,683 211,634 505,808
Total financial assets 379,137 42,115 386,134 807,386
Financial Liabilities
Deposit liabilities 291,698 17,89 3 412,532 722,123
Bills payable 34,505 4,507 815 39,827
Total financial liabilities 326,203 22,400 413,347 761,950
Repricing gap P52,934 P19,715 (P27,213) P45,436

Parent Company
2019
Up to 3 >3 to 12 >12
Months Months Months Total
Financial Assets
Due from BSP P88,110 P– P– P88,110
Due from other banks 8,646 – – 8,646
Investment securities 3,815 4,671 198,360 206,846
Loans and receivables 248,190 81,756 172,984 502,930
Total financial assets 348,761 86,427 371,344 806,532
Financial Liabilities
Deposit liabilities 288,787 16,873 382,105 687,765
Bills payable 18,409 14,972 – 33,381
Bonds payable – 7,394 30,000 37,394
Total financial liabilities 307,196 39,239 412,105 758,540
Repricing gap P41,565 P47,188 (P40,761) P47,992

52 CHINA BANKING CO RPORATI ON

 Parent Company
2018
Up to 3 >3 to 12 >12
Months Months Months Total
Financial Assets
Due from BSP P95,093 P– P– P95,093
Due from other banks 7,838 – – 7,838
Investment securities 5,782 3,355 169,588 178,725
Loans and receivables 232,067 26,695 182,672 441,434
Total financial assets 340,780 30,050 352,260 723,090
Financial Liabilities
Deposit liabilities 241,100 14,877 382,266 638,243
Bills payable 34,505 4,507 815 39,827
Total financial liabilities 275,605 19,384 383,081 678,070
Repricing gap P65,175 P10,666 (P30,821) P45,020

The Group monitors its exposure to fluctuations in interest rates by using scenario analysis to estimate the impact of interest rate movements
on its interest income. This is done by modeling the impact to the Group’s interest income and interest expenses to parallel changes in the
interest rate curve in a given 12-month period. Interest rate risk exposure is managed through approved limits.

The following tables set forth the estimated change in the Group’s and Parent Company’s annualized net interest income due to a parallel
change in the interest rate curve as of December 31, 2019 and 2018:

Consolidated
2019
Change in interest rates (in basis points)
100bp rise 50bp rise 50bp fall 100bp fall
Change in annualized net interest income P796 P398 (P398) (P796)
As a percentage of the Group’s net interest income
for the year ended December 31, 2019 2.95% 1.48% (1.48%) (2.95%)

Consolidated
2018
Change in interest rates (in basis points)
100bp rise 50bp rise 50bp fall 100bp fall
Change in annualized net interest income P645 P322 (P322) (P645)
As a percentage of the Group’s net interest income
for the year ended December 31, 2018 2.80% 1.40% (1.40%) (2.80%)

Parent Company
2019
Change in interest rates (in basis points)
100bp rise 50bp rise 50bp fall 100bp fall
Change in annualized net interest income P770 P385 (P385) (P770)
As a percentage of the Parent Company’s net
interest income for the year ended
December 31, 2019 3.25% 1.63%% (1.63%) (3.25%)

53
 Parent Company
2018
Change in interest rates (in basis points)
100bp rise 50bp rise 50bp fall 100bp fall
Change in annualized net interest income P996 P498 (P498) (P996)
As a percentage of the Parent Company’s net interest
income for the year ended December 31, 2018 4.95% 2.48% (2.48%) (4.95%)

The following tables set forth the estimated change in the Group’s and Parent Company’s income before tax and equity due to a reasonably
possible change in the market prices of quoted bonds classified under financial assets at FVPL and financial assets at FVOCI, brought about
by movement in the interest rate curve as of December 31, 2019 and 2018 (in millions):

Consolidated
2019
Change in interest rates (in basis points)
25bp rise 10bp rise 10bp fall 25bp fall
Change in income before tax (P183) (P73) P73 P183
Change in equity (369) (148) 148 369

Consolidated
2018
Change in interest rates (in basis points)
25bp rise 10bp rise 10bp fall 25bp fall
Change in income before tax (P51) (P20) P20 P51
Change in equity (113) (45) 45 113

Parent Company
2019
Change in interest rates (in basis points)
25bp rise 10bp rise 10bp fall 25bp fall
Change in income before tax (P183) (P73) P73 P183
Change in equity (356) (142) 142 356
Parent Company
2018
Change in interest rates (in basis points)
25bp rise 10bp rise 10bp fall 25bp fall
Change in income before tax (P51) (P20) P20 P51
Change in equity (103) (41) 41 103

Foreign Currency Risk

The Group’s foreign exchange risk originates from its holdings of foreign currency-denominated assets (foreign exchange assets) and foreign
currency-denominated liabilities (foreign exchange liabilities).

Foreign exchange liabilities generally consist of foreign currency-denominated deposits in the Group’s FCDU account made in the Philippines
or generated from remittances to the Philippines by persons overseas who retain for their own benefit or for the benefit of a third party, foreign
currency deposit accounts with the Group.

54 CHINA BANKING CO RPORATI ON

Foreign currency liabilities are generally used to fund the Group’s foreign exchange assets which generally consist of foreign currency-
denominated loans and investments in the FCDU. Banks are required by the BSP to match the foreign currency-denominated assets with
liabilities held in the FCDU that are denominated in the same foreign currency. In addition, the BSP requires a 30.00% liquidity reserve on all
foreign currency-denominated liabilities held in the FCDU.

The Group’s policy is to maintain foreign currency exposure within existing regulations, and within acceptable risk limits. The Group believes
in ensuring its foreign currency is at all times within limits prescribed for financial institutions who are engaged in the same types of businesses
in which the Group and its subsidiaries are engaged.

The table below summarizes the Group’s and Parent Company’s exposure to foreign exchange risk. Included in the table are the Group’s
and Parent Company’s assets and liabilities at carrying amounts (stated in US Dollars), categorized by currency with its PHP equivalent:

Consolidated
2019 2018
Other Other
USD Currencies* Total PHP USD Currencies* Total PHP
Assets
Cash and other cash items $2,258 2,377 4,635 P234,704 $2,204 2,095 4,299 P226,044
Due from other banks 118,692 4,983 123,675 6,262,264 42,189 7,705 49,894 2,623,437
Financial assets at FVPL 15,396 34,582 49,978 2,530,668 15,988 – 15,988 840,625
Financial assets at FVOCI 13,543 2,284 15,827 801,358 14,640 – 14,640 769,771
Investment securities at
25,838 – 25,838 1,308,285
amortized cost 116,716 – 116,716 6,136,946
Loans and receivables 31,901 39,692 71,593 3,625,127 42,471 12,985 55,456 2,915,835
Accrued interest receivable 654 287 941 47,644 1,038 19 1,057 55,562
Other assets 1,156 2 1,158 58,661 753 18 771 40,523
$209,438 84,207 293,645 P14,868,711 $235,999 22,822 258,821 P13,608,743
Liabilities
Deposit liabilities 64,221 32,506 96,727 4,897,774 66,162 109,191 175,353 9,220,065
Bills payables 388,225 62,731 450,956 22,834,146 354,416 57,130 411,546 21,639,069
Accrued interest and other
2,227 1 2,228 112,788
expenses 1,554 7 1,561 82,090
Other liabilities 7,790 793 8,583 434,593 8,710 1,466 10,176 535,013
462,463 96,031 558,494 28,279,301 430,842 167,79 4 598,636 31,476,237
Currency spot (21,103) 103 (21,000) (1,063,314) (6,789) (316) (7,105) (373,621)
Currency forwards 284,866 32,397 317,263 16,064,529 185,313 145,250 330,563 17,380,980
Net Exposure $10,738 20,676 31,414 P1,590,625 ($16,319) (38) (16,357) (P860,135)
*Other currencies include EUR, CNY, JPY, GBP, AUD, SGD, CHF, CAD, NZD, AED, HKD.

55
 Parent Company
2019 2018
Other Other
USD Currencies* Total PHP USD Currencies* Total PHP
Assets
Cash and other cash items $148 2,377 2,525 P127,857 $123 2,095 2,218 P116,611
Due from other banks 98,334 4,983 103,317 5,231,428 38,240 7,705 45,945 2,415,755
Financial assets at FVPL 15,396 34,582 49,978 2,530,668 15,988 – 15,988 840,625
Financial assets at FVOCI – 2,284 2,284 115,629 – – – –
Investment securities at
amortized cost – – – – 69,961 – 69,961 3,678,571
Loans and receivables 24,445 39,692 64,137 3,247,606 35,151 12,985 48,136 2,530,985
Accrued interest receivable 103 287 390 19,737 75 19 94 4,967
Other assets 1,137 2 1,139 57,691 560 18 578 30,411
$139,563 84,207 223,770 P11,330,616 $160,098 22,822 182,920 P9,617,925
Liabilities
Deposit liabilities 140 32,506 32,646 1,653,048 402 109,191 109,593 5,762,373
Bills payables 388,225 62,731 450,956 22,834,146 354,416 57,130 411,546 21,639,069
Accrued interest and other
2,126 1 2,127 107,687
expenses 1,433 7 1,440 75,729
Other liabilities 7,597 793 8,390 424,785 8,611 1,466 10,077 529,836
398,088 96,031 494,119 25,019,666 364,862 167,79 4 532,656 28,007,007
Currency spot (21,103) 103 (21,000) (1,063,314) (6,789) (316) (7,105) (373,621)
Currency forwards 284,866 32,397 317,263 16,064,529 185,313 145,250 330,563 17,380,980
Net Exposure $5,238 20,676 25,914 P1,312,165 ($26,240) (38) (26,278) (P1,381,723)
*Other currencies include EUR, CNY, JPY, GBP, AUD, SGD, CHF, CAD, NZD, AED, HKD.

The following table sets forth, for the period indicated, the impact of the range of reasonably possible changes in the US$ exchange rate and
other currencies per Philippine peso on the pre-tax income and equity (in millions).

Consolidated
Change in
Foreign Sensitivity of Sensitivity of
Exchange Rate Pretax Income Equity
2019
USD 2% 126 238
Other 1% – 1
USD (2%) (126) (238)
Other (1%) – (1)

2018
USD 2% 33 110
Other 1% – –
USD (2%) (33) (110)
Other (1%) – –

56 CHINA BANKING CO RPORATI ON

 Parent Company
Change in
Foreign Sensitivity of Sensitivity of
Exchange Rate Pretax Income Equity
2019
USD 2% 126 225
Other 1% – 1
USD (2%) (126) (225)
Other (1%) – (1)

2018
USD 2% 33 95
Other 1% – –
USD (2%) (33) (95)
Other (1%) – –

The impact in pre−tax income and equity is due to the effect of foreign currency behaviour to Philippine peso.

Equity Price Risk

Equity price risk is the risk that the fair values of equities change as a result of movements in both the level of equity indices and the value of
individual stocks. The non−trading equity price risk exposure arises from the Group’s investment portfolio.

The effect on the Group and Parent Company’s equity as a result of a change in the fair value of equity instruments held as FVOCI due to a
reasonably possible change in equity indices, with all other variables held constant, is as follows (in millions):

Consolidated
Change in Effect on
equity index Equity
2019 +10% 9.7
−10% (0.3)
2018 +10% 6.8
−10% 1.2
Parent Company
Change in Effect on
equity index Equity
2019 +10% 10.0
−10% (2.5)
2018 +10% 7.7
−10% 0.2

Liquidity Risk and Funding Management

Liquidity risk is generally defined as the current and prospective risk to earnings or capital arising from the Parent Company’s inability to meet
its obligations when they become due without incurring unacceptable losses or costs.

The Parent Company’s liquidity management involves maintaining funding capacity to accommodate fluctuations in asset and liability levels
due to changes in the Parent Company’s business operations or unanticipated events created by customer behavior or capital market
conditions. The Parent Company seeks to ensure liquidity through a combination of active management of liabilities, a liquid asset portfolio
composed of deposits reserves and high quality securities, the securing of money market lines, and the maintenance of repurchase facilities
to address any unexpected liquidity situations.

57
 The tables below show the maturity profile of the Parent Company’s assets and liabilities, based on contractual undiscounted cash flows
(in millions):

December 31, 2019

Less than
On demand 1 year 1 to 2 years 2 to 3 years 3 to 5 years Total
Financial Assets
Cash and other cash items P14,857 P– P– P– P– P14,857
Due from BSP 88,110 – – – – 88,110
Due from other banks 8,646 – – – – 8,646
SPURA – 10,028 – – – 10,028
Financial assets at FVPL – 1,971 1,795 3,564 15,642 22,972
Financial assets at FVOCI – 993 4,517 523 26,443 32,476
Loans and receivables – 144,745 25,030 45,970 337,036 552,781
P111,613 P157,737 P31,342 P50,057 P379,121 P729,870
Financial Liabilities
Deposit liabilities
Demand 170,280 – – – – 170,280
Savings 210,191 – – – – 210,191
Time – 308,305 253 6 4 308,568
Bills payable – 33,381 – – – 33,381
Manager’s checks – 1,536 – – – 1,536
Accrued interest and other expenses – 3,600 – – – 3,600
Derivative liabilities – 1,036 – – – 1,036
Bonds payable – 29,828 – – 7,566 37,394
Other liabilities:
Lease payable – 543 – 1,899 714 3,156
Accounts payable – 2,179 – – – 2,179
Acceptances payable – 413 – – – 413
Due to PDIC – 692 – – – 692
Margin deposits – 6 – – – 6
Other credits − dormant – 447 – – – 4477
Due to the Treasurer of the Philippines – 417 – – – 417
Miscellaneous – 323 – – – 323

58 CHINA BANKING CO RPORATI ON

 December 31, 2019
Less than
On demand 1 year 1 to 2 years 2 to 3 years 3 to 5 years Total
Total liabilities P380,471 P382,706 P253 P1,905 P8,284 P773,619
Net Position (P268,858) (P224,969) P31,089 P48,152 P370,837 (P43,749)

December 31, 2018

Less than
On demand 1 year 1 to 2 years 2 to 3 years 3 to 5 years Total
Financial Assets
Cash and other cash items P13,705 P– P– P– P– 13,705
Due from BSP 95,093 – – – – 95,093
Due from other banks 7,838 – – – – 7,838
SPURA – – – – 8,998
Financial assets at FVPL – 1,700 378 1,079 4,296 7,453
Financial assets at FVOCI – 1,382 389 3,258 4,502 9,531
Loans and receivables – 166,040 30,097 45,970 337,036 579,143
P116,636 P178,120 P30,864 P50,307 P345,834 P721,761
Financial Liabilities
Deposit liabilities
Demand 145,560 – – – – 145,560
Savings 226,944 – – – – 226,944
Time – 235,885 4,764 16,552 16,102 273,303
Bills payable – 40,108 – – – 40,108
Manager’s checks – 2,070 – – – 2,070
Accrued interest and other expenses – 3,279 – – – 3,279
Derivative liabilities – 455 – – – 455
Other liabilities:
Accounts payable – 2,249 – – – 2,249
Acceptances payable – 358 – – – 358
Due to PDIC – 628 – – – 628
Margin deposits – 3 – – – 3
Other credits − dormant – 242 – – – 242
Due to the Treasurer of the Philippines – 379 – – – 379
Miscellaneous – 1,922 – – – 1,922
Total liabilities P372,504 P287,578 P4,764 P16,552 P16,102 P697,500
Net Position (255,868) (109,458) 26,100 33,755 329,732 24,261

Liquidity risk is monitored and controlled primarily by a gap analysis of maturities of relevant assets and liabilities reflected in the MCO
report, as well as an analysis of available liquid assets. Instead of relying solely on contractual maturities profile, the Parent Company uses
Behavioral MCO to capture a going concern view. Furthermore, internal liquidity ratios and monitoring of large fund providers have been set
to determine sufficiency of liquid assets over deposit liabilities. The Bank started monitoring and reporting to the BSP the Liquidity Coverage
Ratio in 2017 and the Net Stable Funding Ratio in 2019. Liquidity is managed by the Parent and its subsidiaries on a daily basis, while
scenario stress tests and sensitivity analysis are conducted periodically.

59
7. DUE FROM BSP AND OTHER BANKS

Due from BSP

This account consists of:

Consolidated Parent Company

2019 2018 2019 2018
Demand deposit account (Note 17) P92,674,383 P99,889,758 P80,609,635 P93,092,929
Special deposit account 7,500,000 2,000,000 7,500,000 2,000,000
Others 15 15 15 15
P100,174,398 P101,889,773 P88,109,650 P95,092,944

Due from Other Banks

This comprises of deposit accounts with:

Consolidated Parent Company

2019 2018 2019 2018
Local banks P3,067,833 P5,284,825 P2,224,644 P4,140,002
Foreign banks 6,832,809 4,170,622 6,420,903 3,697,89 2
P9,900,642 P9,455,447 P8,645,547 P7,837,89 4

Interest Income on Due from BSP and Other Banks

This account consists of:

Consolidated Parent Company

2019 2018 2017 2019 2018 2017
Due from BSP P884,009 P124,557 P213,879 P539,713 P67,039 P112,851
Due from other banks 229,197 135,818 138,850 162,709 101,994 50,296
P1,113,206 P260,375 P352,729 P702,422 P169,033 P163,147

8. INTERBANK LOANS RECEIVABLE AND SECURITIES PURCHASED UNDER RESALE AGREEMENT

Consolidated Parent Company

2019 2018 2019 2018
Interbank loans receivable P4,580,316 P1,998,040 P4,580,316 P1,998,040
SPURA 12,456,144 10,000,000 5,447,293 7,000,000
P17,036,460 P11,9 9 8,040 P10,027,609 P8,998,040

Interbank Loans Receivable

As of December 31, 2019 and 2018, interbank loans receivable consists of short-term foreign currency-denominated loans granted to other
banks with annual interest rates ranging from 1.9% to 2.1% and 2.2%, respectively.

Securities Purchased Under Resale Agreement

This account represents overnight placements with the BSP where the underlying securities cannot be sold or repledged to parties other
than the BSP.

In 2019, 2018 and 2017, the interest rates of SPURA equals to 4.00%, 4.75%, and 3.50%, respectively, for the Group and Parent Company.

60 CHINA BANKING CO RPORATI ON

9. TRADING AND INVESTMENT SECURITIES

Financial Assets at FVPL

This account consists of:

Consolidated Parent Company

2019 2018 2019 2018
Held for trading
Government bonds (Note 28) P8,451,126 P633,893 P8,451,126 P633,893
Treasury notes 2,386,226 838,662 2,386,226 838,662
Treasury bills 1,378,137 1,214,170 1,378,137 1,214,170
Private bonds 4,372,734 3,189,063 4,372,734 2,282,598
Quoted equity shares 1,243,938 1,312,625 1,187,928 1,312,625
17,832,161 7,188,413 17,776,151 6,281,948
Derivative assets (Note 25) 667,950 407,848 667,950 407,848
Total P18,500,111 P7,596,261 P18,444,101 P6,689,796

As of December 31, 2019 and 2018, HFT securities include fair value loss of P22.14 million and P55.35 million, respectively, for the Group
and Parent Company.

Effective interest rates for peso−denominated financial assets at FVPL for both the Group and the Parent Company range from 1.41% to
7.26% in 2019 and from 0.06% to 7.11% in 2018. Effective interest rates for foreign currency−denominated financial assets at FVPL for the
Group range from 0.71% to 5.81% in 2019 and from 0.71% to 6.28% in 2018. Effective interest rates for foreign currency−denominated
financial assets at FVTPL for the Parent Company range from 0.71% to 5.81% in 2019 and from 0.71% to 6.28% in 2018.

Financial Assets at FVOCI

This account consists of:

Consolidated Parent Company

2019 2018 2019 2018
Quoted
Government bonds (Notes 18 and 28) P22,540,516 P9,944,507 P21,052,633 P8,141,359
Private bonds 2,953,271 35,370 2,512,588 1,676
Equities 621,208 103,285 587,043 51,610
26,114,995 10,083,162 24,152,264 8,19 4,645
Unquoted
Equities - net * 18,365 18,365 18,365 18,365
18,365 18,365 18,365 18,365
Total P26,133,360 P10,101,527 P24,170,629 P8,213,010

Unquoted equity securities

This account comprises of shares of stocks of various unlisted private corporations. The Group has designated these equity securities as at
FVOCI because they will not be sold in the foreseeable future.

Net unrealized gains (losses)

Financial assets at FVOCI include fair value gains of P417.58 million for the Group and Parent Company as of December 31, 2019 and fair
value losses of P702.51 million for the Group and Parent Company as of December 31, 2018. The fair value gains or losses are recognized
under OCI. Impairment loss on debt financial assets at FVOCI of the Group and the Parent Company amounted to P18.52 million and
P18.47 million in 2019, respectively and P9.82 million for the Parent Company in 2018.

61
 Effective interest rates for peso−denominated financial assets at FVOCI for both the Group and Parent Company range from 3.94% to 6.87%
in 2019, from 4.25% to 5.58% in 2018 and 2.95% to 8.92% in 2017.

Effective interest rates for foreign currency−denominated financial assets at FVOCI for both the Group and Parent Company range from
0.83% to 5.65% in 2019, from 2.33% to 8.48% in 2018 and from 0.99% to 5.75% in 2017.

Investment Securities at Amortized Cost

This account consists of:

Consolidated Parent Company

2019 2018 2019 2018
Government bonds (Note 18) P108,061,363 P107,9 86,234 P105,602,176 P101,388,184
Private bonds 52,381,323 55,122,532 51,112,073 53,291,150
160,442,686 163,108,766 156,714,249 154,679,334
Unamortized premium − net 8,848,025 9,803,371 8,600,024 9,360,070
Allowance (1,087,983) (375,101) (1,082,690) (214,938)
P168,202,728 P172,537,036 P164,231,583 P163,824,466

Effective interest rates for peso−denominated investment securities at amortized cost for the Group range from 1.06% to 8.92% in 2019,
1.06% to 8.92% in 2018, and from 2.82% to 7.75% in 2017. Effective interest rates for foreign currency−denominated investment securities at
amortized cost range from 1.82% to 6.97% in 2019, 0.58% to 7.37% in 2018, and from 8.50% to 8.93% in 2017.

Sale of Investment Securities at Amortized Cost

The Group and the Parent Company sold the following investment securities at amortized cost in 2019 (figures in millions):

Group Parent Company

Carrying Carrying
Reason for selling amount Gain on sale amount Gain on sale
An increase in the financial assets’ credit risk due to political
uncertainty affecting the sovereign issuer’s environment P1,169 P43 P1,169 P43
A change in the funding profile of the Parent Company 10,445 1,156 10,445 1,156
A potential breach in the regulatory or internal limits of the Group and
the Parent Company 6,275 168 982 86
A highly probable change in regulations with a potentially adverse
impact to the financial assets’ contractual cash flows 729 14 729 14
Total P18,618 P1,381 P13,325 P1,299

These disposals in the investment securities at amortized cost are consistent with the portfolios’ business models with respect to the
conditions and reasons for which the disposals were made as discussed above (see Note 3).

Interest Income on Investment Securities

This account consists of:

Consolidated Parent Company

2019 2018 2017 2019 2018 2017
Financial assets at FVOCI P665,379 P596,864 P– P600,160 P525,774 P–
AFS financial assets – – 1,309,755 – – 1,176,831
Investment securities at
amortized cost 9,162,697 5,279,064 – 8,762,267 5,034,083 –
HTM financial assets – – 2,246,355 – – 2,09 8,19 4
P9,828,076 P 5,875,928 P 3,556,110 P9,362,427 P5,559,857 P3,275,025

62 CHINA BANKING CO RPORATI ON

10. LOANS AND RECEIVABLES

This account consists of:

Consolidated Parent Company

2019 2018 2019 2018
Loans and discounts
Corporate and commercial lending P459,683,487 P411,800,451 P434,474,621 P381,404,349
Consumer lending 106,901,801 87,214,9 39 64,748,163 52,684,530
Trade−related lending 11,196,919 13,817,866 10,902,568 12,9 37,606
Others* 46,830 56,516 34,341 39,761
577,829,037 512,889,772 510,159,693 447,066,246
Unearned discounts (349,897) (255,536) (290,711) (208,377)
577,479,140 512,634,236 509,868,982 446,857,869
Allowance for impairment and credit losses (Note 16) (8,559,976) (6,829,280) (6,938,785) (5,425,713)
P568,919,164 P505,804,956 P502,930,197 P441,432,156
*Others include employee loans and foreign bills purchased.

As of December 31, 2019 and 2018, loans of the Parent Company amounting to P3.28 billion and P5.17 billion, respectively, are rediscounted
with the BSP (Note 19).

Information on the amounts of secured and unsecured loans and receivables (gross of unearned discounts and allowance for impairment
and credit losses) of the Group and Parent Company are as follows

Consolidated Parent Company

2019 2018 2019 2018
Amounts % Amounts % Amounts % Amounts %
Loans secured by
Real estate P100,722,095 17.43 P92,960,218 18.12 P75,049,610 14.71 P66,332,530 14.84
Chattel mortgage 26,294,676 4.55 25,512,590 4.97 10,602,721 2.08 12,063,924 2.70
Guarantee by the
Republic of the Philippines 4,574,220 0.79 5,746,500 1.12 4,574,220 0.90 5,746,500 1.29
Deposit hold out 3,166,911 0.55 3,839,704 0.75 2,286,342 0.45 3,027,9 64 0.68
Shares of stock of
other banks 2,345,300 0.41 2,347,650 0.46 2,345,300 0.46 2,347,650 0.53
Others 119,011,685 20.60 105,253,810 20.52 118,675,412 23.26 102,901,498 23.02
256,114,887 44.33 235,660,472 45.95 213,533,605 41.86 192,420,066 43.04
Unsecured loans 321,714,150 55.67 277,229,304 54.05 296,626,089 58.14 254,646,180 56.96
P577,829,037 100.00 P512,889,776 100.00 P510,159,694 100.00 P447,066,246 100.00

63
 Information on the concentration of credit as to industry of the Group and Parent Company follows:

Consolidated
2019 2018
Amounts % Amounts %
Real estate, renting and business services P131,554,263 22.77 P114,735,281 22.37
Electricity, gas and water 80,765,270 13.98 72,863,548 14.21
Wholesale and retail trade 59,338,753 10.27 55,339,970 10.79
Transportation, storage and communication 57,770,004 10.00 50,516,030 9.85
Financial intermediaries 63,584,082 11.00 49,687,486 9.69
Manufacturing 32,405,226 5.61 28,277,9 54 5.51
Arts, entertainment and recreation 17,899,693 3.10 25,456,962 4.96
Accommodation and food service activities 12,818,682 2.22 12,218,029 2.38
Construction 13,131,855 2.27 11,287,124 2.20
Mining and quarrying 9,995,905 1.73 9,839,723 1.92
Agriculture 6,636,029 1.15 7,134,717 1.39
Education 6,321,842 1.09 5,717,621 1.11
Public administration and defense 4,100,000 0.71 5,166,000 1.01
Professional, scientific and technical activities 771,566 0.13 4,319,666 0.84
Others* 80,735,867 13.98 60,329,660 11.26
P577,829,037 100.00 P512,889,771 100.00
*Others consist of administrative and support service, health, household and other activities.

Parent Company
2019 2018
Amounts % Amounts %
Real estate, renting and business services P108,067,826 21.18 P90,654,316 20.28
Electricity, gas and water 78,802,898 15.45 70,79 8,136 11.04
Financial intermediaries 62,178,902 12.19 48,096,511 10.76
Wholesale and retail trade 55,222,983 10.82 49,365,453 11.04
Transportation, storage and communication 55,429,738 10.86 47,756,466 10.68
Manufacturing 29,757,318 5.83 25,115,956 5.62
Arts, entertainment and recreation 17,799,562 3.49 25,318,150 5.66
Accommodation and food service activities 11,591,121 2.27 10,563,067 2.36
Construction 11,985,485 2.35 9,965,323 2.23
Mining and quarrying 9,991,633 1.96 9,835,453 2.20
Agriculture 5,076,970 1.00 5,321,124 1.19
Public administration and defense 4,100,000 0.80 5,166,000 1.16
Education 5,667,447 1.11 4,872,451 1.09
Professional, scientific and technical activities 685,031 0.13 4,221,842 0.94
Others* 53,806,348 10.55 40,015,998 8.95
P510,163,262 100.00 P447,066,246 100.00
*Others consist of administrative and support service, health, household and other activities.

64 CHINA BANKING CO RPORATI ON

 As of December 31, 2019 and 2018, the Parent Company does not have credit concentration in any particular industry.

Interest Income on Loans and Receivables

This account consists of:

Consolidated Parent Company

2019 2018 2017 2019 2018 2017
Receivables from customers P36,051,051 P28,195,915 21,663,571 P30,824,138 P23,488,872 P17,455,018
Unquoted debt securities – – 88,076 – – 81,999
P36,051,051 P28,195,915 21,751,647 P30,824,138 P23,488,872 P17,537,017

As of December 31, 2019 and 2018, 72.55% and 67.40%, respectively, of the total receivables from customers of the Group were subject to
interest repricing. As of December 31, 2019 and 2018, 75.54% and 71.76%, respectively, of the total receivables from customers of the Parent
Company were subject to interest repricing. Remaining receivables carry annual fixed interest rates ranging from 1.66% to 10.50% in 2019,
from 1.65% to 10.50% in 2018, and from 2.08% to 10.50% in 2017 for foreign currency−denominated receivables and from 0.95% to 30.00%
in 2019 and from 0.95% to 30.00% in 2018, and from 0.95% to 30.00% in 2017 for peso−denominated receivables.

11. EQUITY INVESTMENTS

This account consists of investments in:

A. Subsidiaries
2019 2018
Equity Method:
Balance at beginning of the year
CBSI P12,117,074 P11,618,713
CBCC 1,846,455 1,512,899
CBC−PCCI 42,739 27,9 05
CIBI 327,299 401,215
14,333,567 13,560,732
Share in net income
CBSI 345,165 328,663
CBCC 350,421 358,796
CBC−PCCI 18,061 14,834
CIBI 56,981 (6,938)
770,628 695,355
Share in Other Comprehensive Income
Items that recycle to profit or loss in subsequent periods:
Net unrealized gain (loss) on FVOCI
CBSI 143,236 (25,338)
CBCC 34,527 (27,584)
CIBI 12,732 (16,978)
190,495 (69,900)
Cumulative translation adjustments
CBSI 17,015 5,791
P17,015 P5,791
(Forward)

65
 2019 2018
Items that do not recycle to profit or loss in subsequent periods:
Remeasurement gain on defined benefit assets
CBSI (P66,609) P86,299
CBCC 5,499 2,344
CIBI 4,758 –
(56,352) 88,643
Realized loss on sale of equity securities at FVOCI (76,597) (397,055)
(76,597) (397,055)
Additional Investments
CBSI 363 500,000
363 500,000
Cash Dividends
CBSI – 86,299
CIBI (50,000) (50,000)
(50,000) 36,299
Balance at end of the year
CBSI 12,479,647 12,117,074
CBCC 2,236,902 1,846,455
CBC−PCCI 60,800 42,739
CIBI 351,769 327,29 9
P15,129,118 P14,333,567

B. Associates:

2019 2018
Equity Method:
Balance at beginning of the year P335,092 P329,422
Share in net income 184,661 101,009
Share in OCI:
Items that do not recycle to profit or loss in subsequent periods
Remeasurement gain (loss) on life insurance reserves (11,021) 31,374
Items that recycle to profit or loss in subsequent periods:
Net unrealized gain (loss) on FVOCI 152,452 (126,713)
Remeasurement on defined benefit plan 2,985 –
Additional investments 40,000 –
Balance at end of the year P704,169 P335,092

CBSI
Cost of investment includes the original amount incurred by the Parent Company from its acquisition of CBSI in 2007 amounting to
P1.07 billion. The capital infusion to CBSI in 2018 amounting to P500 million was approved by the Parent Company’s BOD on June 6, 2018.

Merger of CBSI with PDB

The BOD of both CBSI and PDB, in their meeting held on June 26, 2014, approved the proposed merger of PDB with CBSI, with the latter
as the surviving bank. On November 6, 2015, the BSP issued the Certificate of Authority on the Articles of Merger and the Plan of Merger,
as amended, of CBSI and PDB. On December 17, 2015, CBSI obtained SEC’s approval of its merger with PDB, whereby the entire assets
and liabilities of PDB shall be transferred to and absorbed by CBSI.

66 CHINA BANKING CO RPORATI ON

Acquisition of PDB
In 2014, the Parent Company made tender offers to non−controlling stockholders of PDB. As of December 31, 2014, the Parent Company
owns 99.85% and 100.00% of PDB’s outstanding common and preferred stocks, respectively.

As of December 31, 2014, the Parent Company’s cost of investment in PDB consists of:

Acquisition of majority of PDB’s capital stock P1,421,346

Additional capital infusion 1,300,000
Tender offers 255,354
P2,976,700

On March 31, 2015, the Parent Company made additional capital infusion to PDB amounting to P1.70 billion. Of the total cost of
investment, the consideration transferred for the acquisition of PDB follows:

Acquisition of majority of PDB’s capital stock P1,421,346

Tender offers 255,354
P1,676,700

In 2015, the MB of the BSP granted to the Group investment and merger incentives in the form of waiver of special licensing fees for
67 additional branch licenses in restricted areas. This is in addition to the initial investment and merger incentives of 30 new branches in
restricted areas and 35 branches to be transferred from unrestricted to restricted areas granted to the Parent Company by the MB in 2014.
These branch licenses were granted under the Strengthening Program for Rural Bank (SPRB) Plus Framework.

The branch licenses have the following fair values:

114 Commercial Bank branch licenses P2,280,000

18 Thrift Bank branch licenses 270,000
2,550,000
Deferred tax liability 765,000
P1,785,000

On April 6, 2016, the Parent Company’s BOD has approved the allocation of the 67 additional branch licenses in restricted areas as follows:
49 to the Parent Company and 18 to CBSI.  Pursuant to a memorandum dated March 18, 2017, the 67 branch licenses were awarded as
incentives by the Monetary Board as a result of the Parent Company’s acquisition of PDB. Goodwill from acquisition of PDB is computed as
follows:

Consideration transferred P1,676,700

Less: Fair value of identifiable assets and liabilities acquired (Note 15)
Net liabilities of PDB (P725,207)
Branch licenses, net of deferred tax liability (Note 13) 1,785,000 1,059,793
P616,907

CIBI
On October 16, 2019, the BOD declared and approved cash dividend of P50 million for stockholders on record as of declaration date,
payable on December 19, 2019.

On December 7, 2018, the BOD of CIBI approved the declaration of the cash dividends of P50 million from the CIBI’s unrestricted retained
earnings for Stockholders on record as of December 15, 2018 and payable on December 26, 2018.

CBCC
On April 1, 2015, the BOD approved the investment of the Parent Company in an investment house subsidiary, CBCC, up to the amount of
P500.00 million, subject to the requirements of relevant regulatory agencies. On April 30, 2015, the BSP approved the request of the Parent
Company to invest up to 100% or up to P500.00 million common shares in CBCC, subject to certain conditions. On November 27, 2015,
the SEC approved the Articles of Incorporation and By−Laws of CBCC. It also granted CBCC the license to operate as an investment house.
Actual capital infusion to CBCC amounted to P200.00 million and P300.00 million in 2016 capital stock of CBCC from P500.00 million to
P2.00 billion to enable CBCC to handle bigger and 2015, respectively.

67
 On January 19, 2017, the BOD of CBCC approved the increase in authorized deals. The approval was ratified by the BOD of the Parent
Company on February 1, 2017. On April 27, 2017, the Parent Company paid CBCC P500.00 million for additional subscription of
50,000,000 shares.

CBCC acquisition of CBCSec (formerly ATC Securities, Inc.)

On May 19, 2016, the BOD of CBCC approved the acquisition of ATC Securities, Inc. (ATC).

On June 29, 2016, CBCC and the shareholders of ATC (the Original Shareholders) entered into an Agreement for the Purchase of Shares
(Agreement), whereby CBCC agreed to buy, and the Original Shareholders agreed to sell, 3,800,000 shares representing 100% of the issued
and outstanding shares of ATC.

On July 6, 2017, the SEC approved the change of name from ATC Securities, Inc. to China Bank Securities Corporation.

CBC Assets One (SPC) Inc.

CBC Assets One (SPC) Inc. was incorporated on June 15, 2016 as a wholly−owned special purpose company of CBCC for asset−backed
securitization. It has not yet commenced commercial operations.

Investment in Associates
Investment in associates in the consolidated and Parent Company’s financial statements pertain to investment in MCB Life and CBC−PCCI’s
investment in Urban Shelters (accounted for by CBC−PCCI in its financial statements as an investment in an associate). Investment in Urban
Shelters is carried at nil amount as of December 31, 2019 and 2018.MCB Life

On August 2, 2006, the BOD approved the joint project proposal of the Parent Company with Manufacturers Life Insurance Company
(Manulife). Under the proposal, the Parent Company will invest in a life insurance company owned by Manulife, and such company will be
offering innovative insurance and financial products for health, wealth and education through the Parent Company’s branches nationwide.
The life insurance company was incorporated as The Pramerica Life Insurance Company Inc. in 1998. The name was changed to Manulife
China Bank Life Assurance Corporation on March 23, 2007. The Parent Company acquired 5.00% interest in MCB Life on August 8, 2007.
This investment is accounted for as an investment in an associate by virtue of the Bancassurance Alliance Agreement which provides the
Parent Company to be represented in MCB Life’s BOD and, thus, exercise significant influence over the latter.

The BSP requires the Parent Company to maintain a minimum of 5.00% ownership over MCB Life in order for MCB Life to be allowed to
continue distributing its insurance products through the Parent Company’s branches.

On September 12, 2014, the BSP approved the request of the Parent Company to raise its capital investment in MCB Life from 5.00% to
40.00% of its authorized capital through purchase of P1.75 million common shares.

On December 5, 2018, the Parent Company’s BOD approved the additional capital infusion in the amount of P40.00 million in MCB Life.
This represents 40% of the P100.00 million total capital infusion in MCB Life with the balance of P60.00 million to be provided by Manulife
Philippines. On top of complying with the higher capital requirements for insurance companies, the additional capital will improve MCB Life’s
capacity to underwrite more business and enhance its competitive position. On February 22, 2019, the BSP approved the Bank’s capital
infusion of P40.0 million to MCB Life to comply with the capitalization requirement of the Insurance Commission for insurance companies,
which was paid on March 21, 2019.

The following tables show the summarized financial information of MCB Life:

2019 2018
Total assets P39,276,563 P34,832,490
Total liabilities 37,565,561 34,007,106
Equity 1,711,002 825,384

2019 2018
Revenues P8,628,345 P9,176,931
Benefits, claims and operating expenses 8,104,905 8,898,029
Income before income tax 523,441 278,902
Net income 483,173 252,522

68 CHINA BANKING CO RPORATI ON

 Commission income earned by the Group from its bancassurance agreement amounting to P303.45 million, P357.79 million, P360.01 million
in 2019, 2018 and 2017, respectively, is included under ‘Miscellaneous income’ in the statements of income (Note 22).

12. BANK PREMISES, FURNITURE, FIXTURES AND EQUIPMENT AND RIGHT-OF-USE ASSETS

The composition of and movements in this account follow:

Consolidated

Furniture, Right-of-use Right-of-use

Land Fixtures and Leasehold Construction− Assets Land Assets Bldg. 2019
(Note 23) Equipment Buildings Improvements in−Progress (Note 2) (Note 2) Total
Cost
Balance at beginning of year P3,218,263 P7,909,078 P1,789,412 P2,189,884 P24,727 P181,451 P3,260,478 P18,573,293
Additions – 388,704 95,138 108,863 82,649 – 247,311 922,665
Disposals/transfers (Note 14)* 18,732 (1,315,540) 77,268 27,824 (47,937) – (1,396) (1,241,049)
Balance at end of year 3,236,995 6,982,242 1,961,818 2,326,571 59,439 181,451 3,506,393 18,254,909
Accumulated Depreciation
and Amortization
Balance at beginning of year – 6,360,109 1,063,973 1,256,824 – – – 8,680,906
Depreciation and amortization – 581,985 108,578 233,081 – 13,556 657,228 1,594,428
Disposals/transfers (Note 14)* – (1,139,495) (14,911) (22,304) – – 1,052 (1,175,658)
Balance at end of year – 5,802,599 1,157,640 1,467,601 – 13,556 658,280 9,099,676
Net Book Value at End of Year P3,236,995 P1,179,643 P804,178 P858,970 P59,439 P167,895 P2,848,113 P9,155,233
*Includes transfers from investment properties amounting to P28.90 million.

Consolidated
Furniture,
Land Fixtures and Leasehold Construction− 2018
(Note 23) Equipment Buildings Improvements in−Progress Total
Cost
Balance at beginning of year P3,345,404 P7,893,528 P1,941,742 P1,855,565 P61,489 P11,752,324
Additions 631,734 23,978 315,486 86,804 1,058,002
Disposals/transfers* (127,141) (616,184) (176,307) 18,832 (123,565) (1,024,365)
Balance at end of year 3,218,286 7,9 09,078 1,789,413 2,189,883 24,728 11,785,9 61
Accumulated Depreciation
and Amortization
Balance at beginning of year − 6,079,049 1,103,650 1,038,017 − 8,220,716
Depreciation and amortization − 704,124 94,836 211,9 07 − 1,010,867
Disposals/transfers* − (423,065) (134,512) 6,901 − (550,676)
Balance at end of year − 6,360,108 1,063,974 1,256,825 − 8,680,907
Allowance for Impairment Losses
(Note 16)
Balance at beginning of year − − 1,148 − − 1,148
Reclassification − − (1,148) − − (1,148)
Balance at end of year − − − − − −
Net Book Value at End of Year P3,218,286 P1,548,970 P725,439 P933,058 P24,728 P6,450,458
*Includes transfers from investment properties amounting to P20.13 million.

69
 Parent Company

Furniture, Right-of-use Right-of-use

Land Fixtures and Leasehold Construction− Assets Land Assets Bldg. 2019
(Note 23) Equipment Buildings Improvements in−Progress (Note 2) (Note 2) Total
Cost
Balance at beginning of year P2,786,310 P6,628,787 P1,104,030 P1,536,024 P24,727 P181,451 P2,544,985 P14,806,314
Additions – 292,340 90,988 80,222 42,494 – 185,549 691,593
Disposals/transfers (Note 14)* 103,395 (1,256,060) 40,672 26,633 (47,851) – – (1,133,211)
Balance at end of year 2,889,705 5,665,067 1,235,690 1,642,879 19,370 181,451 2,730,534 14,364,696
Accumulated Depreciation
and Amortization
Balance at beginning of year – 5,381,253 580,504 852,735 – – – 6,814,492
Depreciation and amortization – 455,240 61,486 165,524 – 13,556 491,975 1,187,781
Disposals/transfers (Note 14)* – (1,087,258) 3,610 (22,573) – – – (1,106,221)
Balance at end of year – 4,749,235 645,600 995,686 – 13,556 491,975 6,896,052
Net Book Value at End of Year P2,889,705 P915,832 P590,090 P647,193 P19,370 P167,895 P2,238,559 P7,468,644
*Includes transfers from investment properties amounting to P28.90 million

Parent Company
Furniture,
Land Fixtures and Leasehold Construction− 2018
(Note 23) Equipment Buildings Improvements in−Progress Total
Cost
Balance at beginning of year P2,786,310 P6,668,301 P1,085,668 P1,351,869 P61,486 P11,9 53,634
Additions − 49 8,101 16,235 223,957 86,804 825,097
Disposals/transfers* − (537,615) 2,127 (39,802) (123,565) (698,855)
Balance at end of year 2,786,310 6,628,787 1,104,030 1,536,024 24,725 12,079,876
Accumulated Depreciation and Amortization
Balance at beginning of year − 5,189,416 543,875 755,761 − 6,489,052
Depreciation and amortization − 557,586 36,010 148,934 − 742,530
Disposals/transfers* − (365,749) 618 (51,961) − (417,09 2)
Balance at end of year − 5,381,253 580,503 852,734 − 6,814,49 0
Net Book Value at End of Year P2,786,310 P1,247,534 P523,527 P683,290 P24,725 P5,265,386
*Includes transfers from investment properties amounting to P20.13 million.

The Group adopted the deemed cost model as of January 1, 2004 and considered the carrying value of the land determined under its
previous accounting method (revaluation method) as the deemed cost of the asset as of January 1, 2005. Accordingly, revaluation increment
amounting to P1.28 billion was closed to surplus (Note 24) in 2011.

As of December 31, 2019 and 2018, the gross carrying amount of fully depreciated furniture, fixtures and equipment still in use amounted to
P2.73 billion and P3.47 billion, respectively, for the Group and P1.99 billion and P2.61 billion, respectively, for the Parent Company.

Gain on sale of furniture, fixtures and equipment amounting to P1.44 million, P1.81 million and P2.11 million in 2019, 2018 and 2017,
respectively, for the Group and P1.44 million, P1.60 million and P1.69 million in 2019, 2018 and 2017, respectively, for the Parent Company
are included in the statements of income under ‘Miscellaneous income’ account (Note 22).

In 2017, depreciation and amortization amounting to P932.39 million and P877.24 million for the Group and Parent Company, respectively,
are included in the statements of income under ‘Depreciation and amortization’ account.

70 CHINA BANKING CO RPORATI ON

13. INVESTMENT PROPERTIES

The composition of and movements in this account follow:

Consolidated
Buildings and 2019
Land Improvements Total
Cost
Balance at beginning of year P4,285,852 P2,659,748 P6,945,600
Additions 405,996 445,622 851,618
Disposals/write−off/transfers* (1,041,905) (374,652) (1,416,557)
Balance at end of year 3,649,943 2,730,718 6,380,661
Accumulated Depreciation and Amortization
Balance at beginning of year – 880,766 880,766
Depreciation and amortization – 173,378 173,378
Disposals/write−off/transfers* – (139,679) (139,679)
Balance at end of year – 914,465 914,465
Allowance for Impairment Losses (Note 16)
Balance at beginning of year 942,559 332,673 1,275,232
Disposals/write−off/reclassification* (68,196) (11,164) (79,360)
Reclassification (66,861) (66,861)
Balance at end of year 874,363 254,648 1,129,011
Net Book Value at End of Year P2,775,580 P1,561,605 P4,337,185
*Includes transfers to bank premises amounting to P28.90 million (Note 12).

Consolidated
Buildings and 2018
Land Improvements Total
Cost
Balance at beginning of year P4,605,061 P2,646,549 P7,251,610
Additions 135,099 408,334 543,433
Disposals/write−off/transfers* (454,309) (395,136) (849,445)
Balance at end of year 4,285,851 2,659,747 6,945,598
Accumulated Depreciation and Amortization
Balance at beginning of year – 742,071 742,071
Depreciation and amortization – 170,978 170,978
Disposals/write−off/transfers* – (32,285) (32,285)
Balance at end of year – 880,764 880,764
Allowance for Impairment Losses (Note 16)
Balance at beginning of year 1,028,013 409,370 1,437,383
Disposals/write−off/reclassification* (85,454) (76,697) (162,151)
Balance at end of year 942,559 332,673 1,275,232
Net Book Value at End of Year P3,343,292 P1,446,310 P4,789,602
*Includes transfers to bank premises amounting to P20.13 million (Note 12).

71
 Parent Company
Buildings and 2019
Land Improvements Total
Cost
Balance at beginning of year P1,420,279 P1,329,938 P2,750,217
Additions 174,610 315,738 490,348
Disposals/write−off/transfers* (66,810) (106,911) (173,721)
Balance at end of year 1,528,079 1,538,765 3,066,844
Accumulated Depreciation and Amortization
Balance at beginning of year – 440,455 440,455
Depreciation and amortization – 101,933 101,933
Disposals/write−off/transfers* – (87,046) (87,046)
Balance at end of year – 455,342 455,342
Allowance for Impairment Losses (Note 16)
Balance at beginning and end of year 919,276 201,689 1,120,965
Disposals/write−off/reclassification* (6,450) – (6,450)
Balance at end of year 912,826 201,689 1,114,515
Net Book Value at End of Year P615,253 P881,734 P1,496,987
*Includes transfers to bank premises amounting to P28.90 (Note 12).

Parent Company
Buildings and 2018
Land Improvements Total
Cost
Balance at beginning of year P1,859,355 P1,397,668 P3,257,023
Additions 135,099 125,671 260,770
Disposals/write−off/transfers* (574,177) (193,400) (767,577)
Balance at end of year 1,420,277 1,329,939 2,750,216
Accumulated Depreciation and Amortization
Balance at beginning of year – 500,102 500,1022
Depreciation and amortization – 89,928 89,928
Disposals/write−off/transfers* – (149,575) (149,575)
Balance at end of year – 440,455 440,455
Allowance for Impairment Losses (Note 16)
Balance at beginning and end of year 1,004,729 201,689 1,206,4188
Disposals/write−off/reclassification* (85,454) – (85,454)
Balance at end of year 919,275 201,689 1,120,9 64
Net Book Value at End of Year P501,002 P687,79 5 P1,188,797
*Includes transfers to bank premises amounting to P20.13 million (Note 12).

The Group’s investment properties consist entirely of real estate properties acquired in settlement of loans and receivables. The difference
between the fair value of the investment property upon foreclosure and the carrying value of the loan is recognized under ‘Gain on asset
foreclosure and dacion transactions’ in the statements of income.

In 2017, depreciation and amortization amounting to P191.34 million and P104.64 million for the Group and Parent Company, respectively,
are included in the statements of income under ‘Depreciation and amortization’ account.

72 CHINA BANKING CO RPORATI ON

 In 2019, expense relating to short-term leases amounting to P523.71 million and P388.83 million for the Group and Parent Company,
respectively, are included in the ‘Occupancy cost’ account. Total cash outflows for leases amount to P1.51 billion and P1.18 billion for the
Group and Parent Company, respectively.

Details of rental income earned and direct operating expenses incurred on investment properties follow:

Consolidated
2019 2018 2017
Rent income on investment properties P38,288 P35,323 P32,499
Direct operating expenses on investment properties
generating rent income 12,952 1,451 924
Direct operating expenses on investment properties not
generating rent income 55,424 66,011 52,029

Parent Company
2019 2018 2017
Rent income on investment properties P8,460 P10,994 P8,250
Direct operating expenses on investment properties
generating rent income 12,150 649 799
Direct operating expenses on investment properties not
generating rent income 20,503 29,584 33,405

Rent income earned from leasing out investment properties is included under ‘Miscellaneous income’ in the statements of income (Note 22).

On August 26, 2011, the Parent Company was registered as an Economic Zone Information Technology (IT) Facilities Enterprise with the
Philippine Economic Zone Authority (PEZA) to operate and maintain a proposed 17−storey building located inside the CBP−IT Park in
Barangays Mabolo, Luz, Hipodromo, Carreta, and Kamputhaw, Cebu City, for lease to PEZA−registered IT enterprises, and to be known as
Chinabank Corporate Center. This registration is under PEZA Registration Certificate No. 11−03−F.

Under this registration, the Parent Company is entitled to five percent (5.00%) final tax on gross income earned from locator IT enterprises
and related operations in accordance with existing PEZA rules. The Parent Company shall also be exempted from the payment of all national
and local taxes in relation to this registered activity.

14. GOODWILL AND INTANGIBLE ASSETS

Goodwill
Goodwill represents the excess of the acquisition costs over the fair value of the identifiable assets and liabilities of companies acquired by
the Group.

The Group attributed the goodwill arising from its acquisition of CBSI and PDB to factors such as increase in geographical presence and
customer base due to the branches acquired. None of the goodwill recognized is expected to be deductible for income tax purposes. CBSI
as surviving entity from the merger with PDB, is the identified CGU for this goodwill. The Parent Company’s Retail Banking Business (RBB)
has been identified as the CGU for impairment testing of the goodwill from its acquisition of CBSI.

As of December 31, 2019 and 2018, amount of goodwill per CGU follows:

Consolidated Parent Company

RBB P222,841 P222,841
CBSI 616,907 –
Total P839,748 P222,841

73
 The recoverable amount of the CGUs have been determined based on a value−in−use calculation using cash flow projections from financial
budgets approved by senior management covering a five−year period, which do not include restructuring activities that the Group is not yet
committed to or significant future investments that will enhance the asset base of the CGU being tested. Other than loans and deposits
growth rates, the significant assumptions, and the most sensitive, used in computing for the recoverable values of the CGUs follow:

2019 2018
RBB CBSI RBB CBSI
Discount rate 6.29% 10.19% 7.12% 9.81%
Long-term growth rate 1.00% 1.00% 1.00% 1.00%

With regard to the assessment of value−in−use of the CGU, management believes that no reasonably possible change in any of the above
key assumptions would cause the carrying value of the goodwill to materially exceed its recoverable amount as of December 31, 2019
and 2018.

Branch Licenses
Branch licenses of the Group arose from the acquisitions of CBSI, Unity Bank, and PDB. As of December 31, 2019 and 2018, details of
branch licenses (gross of allowance for impairment) in the Group’s and Parent Company’s financial statements follow:

Consolidated Parent Company

Branch license from CBSI acquisition P420,600 P398,000
Branch license from Unity Bank acquisition 347,400 –
Branch license from PDB acquisition* 2,839,500 –
Total P3,607,500 P398,000
*mostly attributable to the Parent Company

The calculation of the value−in−use of the CGU is most sensitive to the following assumptions:

• Discount rates
• Long-term growth rate used to extrapolate cash flows beyond the budget period

As of December 31, 2019, the Group provided allowance for probable losses amounting to P160 million related to certain branch licenses
granted by the BSP in restricted areas arising from the acquisition of CBSI.

Capitalized software costs

The movements in the account follow:

Consolidated Parent Company

2019 2018 2019 2018
Cost
Balance at beginning of year P1,000,739 P714,230 P895,105 P591,256
Additions 96,460 144,123 79,070 154,055
Disposals/Write-off/Reclass (Note 12) 794,174 142,386 811,256 149,794
Balance at end of year 1,891,373 1,000,739 1,785,431 89 5,105
Accumulated Depreciation and Amortization
Balance at beginning of year 407,277 217,697 377,574 188,395
Depreciation and amortization 174,855 115,840 173,378 115,450
Disposals/Write-off/Reclass (Note 12) 686,563 73,740 686,563 73,729
Balance at end of year 1,268,695 407,277 1,237,514 377,574
Net Book Value at End of Year P622,678 P593,462 P547,917 P517,531

74 CHINA BANKING CO RPORATI ON

15. OTHER ASSETS

This account consists of:

Consolidated Parent Company

2019 2018 2019 2018
Financial assets
Accounts receivable P2,394,849 P2,595,023 P1,464,942 P1,480,760
SCR 1,162,106 1,121,035 235,049 224,035
RCOCI 424,364 129,142 342,018 117,227
Others 966,441 491,475 330,363 175,540
4,947,760 4,336,675 2,372,372 1,9 97,562
Nonfinancial assets
Net plan assets (Note 25) 543,471 777,827 499,711 756,160
Prepaid expenses 338,754 246,053 303,794 208,632
Creditable withholding taxes 544,634 338,618 476,107 338,618
Security deposit 268,602 272,541 189,277 193,216
Documentary stamps 198,093 215,696 157,020 149,078
Sundry debits 278,761 358,051 278,761 166,951
Miscellaneous 332,751 433,502 – –
2,505,066 2,642,288 1,904,670 1,812,655
7,452,826 6,978,963 4,277,042 3,810,217
Allowance for impairment and credit losses (Note 16) (565,319) (759,404) (294,913) (477,454)
P6,887,507 P6,219,559 P3,982,129 P3,332,763

Accounts receivable
Accounts receivable also includes non−interest bearing advances to officers and employees, with terms ranging from 1 to 30 days and
receivables of the Parent Company from automated teller machine (ATM) transactions of clients of other banks that transacted through any
of the Parent Company’s ATM terminals.

Sales Contract Receivable

This refers to the amortized cost of assets acquired in settlement of loans through foreclosure or dation in payment and subsequently sold on
installment basis whereby the title to the said property is transferred to the buyers only upon full payment of the agreed selling price.

SCR bears fixed interest rate per annum in 2019 and 2018 ranging from 5% to 10.25% and 5.00% to 10.00%, respectively.

Miscellaneous
Miscellaneous consists mainly of unissued stationery and supplies, inter−office float items, and deposits for various services.

75
16. ALLOWANCE FOR IMPAIRMENT AND CREDIT LOSSES

Changes in the allowance for impairment and credit losses are as follows:

Consolidated Parent Company

2019 2018 2019 2018
Balances at beginning of year
Loans and receivables P6,829,280 P8,121,175 P5,425,713 P6,500,542
Investment properties 1,275,232 1,437,383 1,120,965 1,206,418
Accrued interest receivable 303,555 201,647 45,247 58,269
Financial Assets at FVOCI (4,023) 128,171 – 6,323
Investment securities at amortized cost 375,102 – 214,938 83,618
Bank premises, furniture, fixtures and equipment – 1,148 – –
Other assets 772,004 781,424 477,454 540,960
9,551,150 10,670,948 7,284,317 8,39 6,130
Provisions charged to operations 2,570,168 141,076 2,205,062 (1,957)
Accounts charged off and others (305,722) (1,260,874) (746) (1,109,856)
2,264,446 (1,119,798) 2,204,316 (1,111,813)
Balances at end of year
Loans and receivables (Note 10) 8,559,976 6,829,280 6,938,785 5,425,713
Investment properties (Note 13) 1,129,012 1,275,232 1,114,514 1,120,9 65
Accrued interest receivable 275,888 303,555 39,261 45,247
Financial Assets at FVPL 6,297 – – –
Financial Assets at FVOCI (Note 9) 18,521 (4,023) 18,471 –
Investment securities at amortized cost 1,087,983 375,102 1,082,690 214,938
Intangible assets 172,600 – – –
Other assets (Note 15) 565,319 772,004 294,912 477,454
P11,815,596 P9,551,150 P9,488,633 P7,284,317

At the current level of allowance for impairment and credit losses, management believes that the Group has sufficient allowance to cover
any losses that may be incurred from the non−collection or non−realization of its loans and receivables and other risk assets.

The separate valuation allowance of acquired loans and receivables from PDB amounting to P1.59 billion was not recognized by the Group
on the effectivity date of acquisition as these receivables were measured at fair value at acquisition date. Any uncertainties about future
cash flows of these receivables were included in their fair value measurement (Note 11). Also, the separate valuation allowance of acquired
investment properties from PDB amounting to P199.15 million was not recognized by the Group on the effectivity date of acquisition as
these properties were measured at fair value on acquisition date.

76 CHINA BANKING CO RPORATI ON

The tables below illustrate the movements of the allowance for impairment and credit losses during the year (effect of movements in ECL
due to transfers between stages are shown in the total column):

Consolidated
ECL Staging  
Stage 1 Stage 2 Stage 3 Total
Corporate and commercial lending 12-month ECL Lifetime ECL Lifetime ECL
Loss allowance at January 1, 2019 2,775,127 983,660 1,590,107 5,348,894
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (52,828) 117,697 - 64,869
Transfer from Stage 1 to Stage 3 (1,359) - 128,216 126,857
Transfer from Stage 2 to Stage 1 161,584 (806,673) - (645,089)
Transfer from Stage 2 to Stage 3 - (35,349) 466,611 431,262
Transfer from Stage 3 to Stage 1 11,821 - (18,807) (6,986)
Transfer from Stage 3 to Stage 2 - 207 (207) -
New financial assets originated * 1,653,940 153,502 654,294 2,461,736
Changes in PDs/LGDs/EADs (173,129) 119,883 518,155 464,909
Financial assets derecognized during the period (968,397) (39,618) (205,387) (1,213,402)
Fx and other movements 17,673 20 12,19 2 29,885
Total net P&L charge during the period 649,305 (490,331) 1,555,067 1,714,041
Other movements without P&L impact
Write-offs, Foreclosures and other movements (17,716) (17) (127,758) (145,491)
Total movements without P&L impact (17,716) (17) (127,758) (145,491)

Loss allowance at December 31, 2019 3,406,716 493,312 3,017,416 6,917,444

* Stage classification of new financial assets originated pertains to the stage as of end of year

Consolidated
ECL Staging  
Stage 1 Stage 2 Stage 3 Total
Consumer lending 12-month ECL Lifetime ECL Lifetime ECL

Loss allowance at January 1, 2019 223,382 16,576 1,141,577 1,381,535

Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (5,909) 11,613 - 5,704
Transfer from Stage 1 to Stage 3 (3,345) - 74,421 71,076
Transfer from Stage 2 to Stage 1 2,134 (2,300) - (166)
Transfer from Stage 2 to Stage 3 - (7,011) 17,168 10,157
Transfer from Stage 3 to Stage 1 12,565 - (32,749) (20,184)
Transfer from Stage 3 to Stage 2 - 3,004 (10,610) (7,606)
New financial assets originated* 80,141 8,549 102,033 190,723
(Forward)

77
 Consolidated
ECL Staging  
Stage 1 Stage 2 Stage 3 Total
Consumer lending 12-month ECL Lifetime ECL Lifetime ECL
Changes in PDs/LGDs/EADs (59,675) 4,088 (127,824) (183,411)
Financial assets derecognized during the period (22,734) (3,584) (86,203) (112,521)
Fx and other movements (15) - 2,016 2,001
Total net P&L charge during the period 3,162 14,359 (61,748) (44,227)
Other movements without P&L impact
Write-offs, Foreclosures and other movements - - (31,668) (31,668)
Total movements without P&L impact - - (31,668) (31,668)

Loss allowance at December 31, 2019 226,544 30,935 1,048,161 1,305,640

* Stage classification of new financial assets originated pertains to the stage as of end of year

Consolidated
ECL Staging  
Stage 1 Stage 2 Stage 3 Total
Trade-related lending 12-month ECL Lifetime ECL Lifetime ECL
Loss allowance at January 1, 2019 53,678 25,774 19,400 98,852
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (14) 88 - 74
Transfer from Stage 1 to Stage 3 (242) - 46,387 46,145
Transfer from Stage 2 to Stage 1 - - - -
Transfer from Stage 2 to Stage 3 - - - -
Transfer from Stage 3 to Stage 1 - - - -
Transfer from Stage 3 to Stage 2 - - - -
New financial assets originated* 127,018 341 141,229 268,588
Changes in PDs/LGDs/EADs 17 - (1) 16
Financial assets derecognized during the period (53,384) (25,774) - (79,158)
Fx and other movements 297 - - 297
Total net P&L charge during the period 73,692 (25,345) 187,615 235,962
Other movements without P&L impact
Write-offs, foreclosures and other movements (297) - - (297)
Total movements without P&L impact (297) - - (297)

Loss allowance at December 31, 2019 127,073 429 207,015 334,517

* Stage classification of new financial assets originated pertains to the stage as of end of year

78 CHINA BANKING CO RPORATI ON

 Consolidated
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Investments measured at Amortized Cost 12-month ECL Lifetime ECL Lifetime ECL
Loss allowance at January 1, 2019 208,949 14,317 151,836 375,102
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (12,351) 697,085 - 684,734
Transfer from Stage 1 to Stage 3 - - - -
Transfer from Stage 2 to Stage 1 29 (486) - (457)
Transfer from Stage 2 to Stage 3 - - - -
Transfer from Stage 3 to Stage 1 - - - -
Transfer from Stage 3 to Stage 2 - - - -
New financial assets originated or purchased* 14,762 101,535 - 116,297
Changes in PDs/LGDs/EADs 78,542 4,099 - 82,641
Financial assets derecognized during the period (18,712) (4,722) (151,836) (175,270)
Fx and other movements 23,248 1,681 - 24,929
Total net P&L charge during the period 85,518 799,192 (151,836) 732,874
Other movements without P&L impact
Write-offs, foreclosures and other movements (18,379) (1,681) - (20,060)
Total movements without P&L impact (18,379) (1,681) - (20,060)

Loss allowance at December 31, 2019 276,088 811,828 - 1,087,916

* Stage classification of new financial assets originated or purchased pertains to the stage as of end of year

Consolidated
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Investments measured at FVOCI (Debt) 12-month ECL Lifetime ECL Lifetime ECL
Loss allowance at January 1, 2019 3,496 2 - 3,498
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 - - - -
Transfer from Stage 1 to Stage 3 - - - -
Transfer from Stage 2 to Stage 1 19 (2) - 17
Transfer from Stage 2 to Stage 3 - - - -
Transfer from Stage 3 to Stage 1 - - - -
Transfer from Stage 3 to Stage 2 - - - -
New financial assets originated or purchased* 9,688 - - 9,688
Changes in PDs/LGDs/EADs (96) - - (96)
Financial assets derecognized during the period (909) - - (909)
Fx and other movements 1,637 - - 1,637
Total net P&L charge during the period 10,339 (2) - 10,337
Other movements without P&L impact
Write-offs, foreclosures and other movements (1,637) - - (1,637)
Total movements without P&L impact (1,637) - - (1,637)

Loss allowance at December 31, 2019 12,198 - - 12,198

* Stage classification of new financial assets originated or purchased pertains to the stage as of end of year

79
 Parent
ECL Staging  
Stage 1 Stage 2 Stage 3 Total
Corporate and commercial lending 12-month ECL Lifetime ECL Lifetime ECL
Loss allowance at January 1, 2019 2,646,168 961,778 909,762 4,517,708
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (51,341) 116,210 – 64,869
Transfer from Stage 1 to Stage 3 (862) – 127,719 126,857
Transfer from Stage 2 to Stage 1 161,245 (806,334) – (645,089)
Transfer from Stage 2 to Stage 3 – (33,631) 464,893 431,262
Transfer from Stage 3 to Stage 1 10 – (6,996) (6,986)
Transfer from Stage 3 to Stage 2 – – – –
New financial assets originated * 1,625,381 153,094 633,358 2,411,833
Changes in PDs/LGDs/EADs (161,930) 116,189 (9,589) (55,330)
Financial assets derecognized during the period (901,968) (21,640) (64,352) (987,960)
Fx and other movements 17,673 17 12,193 29,883
Total net P&L charge during the period 688,208 (476,095) 1,157,226 1,369,339
Other movements without P&L impact
Write-offs, foreclosures and other movements (17,716) (17) (127,758) (145,491)
Total movements without P&L impact (17,716) (17) (127,758) (145,491)

Loss allowance at December 31, 2019 3,316,660 485,666 1,939,230 5,741,556

* Stage classification of new financial assets originated pertains to the stage as of end of year

Parent
ECL Staging  
Stage 1 Stage 2 Stage 3 Total
Consumer lending 12-month ECL Lifetime ECL Lifetime ECL
Loss allowance at January 1, 2019 94,166 5,721 714,022 813,909
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (1,968) 7,672 – 5,704
Transfer from Stage 1 to Stage 3 (2,068) – 73,144 71,076
Transfer from Stage 2 to Stage 1 599 (765) – (166)
Transfer from Stage 2 to Stage 3 – (621) 10,778 10,157
Transfer from Stage 3 to Stage 1 192 – (20,376) (20,184)
Transfer from Stage 3 to Stage 2 – 94 (7,700) (7,606)
New financial assets originated* 67,474 2,365 83,338 153,177
Changes in PDs/LGDs/EADs (3,877) (342) (32,708) (36,927)
Financial assets derecognized during the period (9,452) (1,701) (86,110) (97,263)
Fx and other movements (15) – 2,016 2,001
Total net P&L charge during the period 50,885 6,702 22,382 79,969
Other movements without P&L impact
Write-offs, foreclosures and other movements – – (31,668) (31,668)
Total movements without P&L impact – – (31,668) (31,668)

Loss allowance at December 31, 2019 145,051 12,423 704,736 862,210

* Stage classification of new financial assets originated pertains to the stage as of end of year

80 CHINA BANKING CO RPORATI ON

 Parent
ECL Staging  
Stage 1 Stage 2 Stage 3 Total
Trade-related lending 12-month ECL Lifetime ECL Lifetime ECL
Loss allowance at January 1, 2019 48,922 25,774 19,400 94,096
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (14) 88 – 74
Transfer from Stage 1 to Stage 3 (242) – 46,387 46,145
Transfer from Stage 2 to Stage 1 – – – –
Transfer from Stage 2 to Stage 3 – – – –
Transfer from Stage 3 to Stage 1 – – – –
Transfer from Stage 3 to Stage 2 – – – –
New financial assets originated* 127,018 341 141,229 268,588
Changes in PDs/LGDs/EADs 17 – (1) 16
Financial assets derecognized during the period (48,628) (25,774) – (74,402)
Fx and other movements 297 – – 297
Total net P&L charge during the period 78,448 (25,345) 187,615 240,718
Other movements without P&L impact
Write-offs, foreclosures and other movements (297) – – (297)
Total movements without P&L impact (297) – – (297)

Loss allowance at December 31, 2019 127,073 429 207,015 334,517

Parent
ECL Staging  
Stage 1 Stage 2 Stage 3 Total
12-month ECL Lifetime ECL Lifetime ECL
Investments in debt instruments (AC)
Loss allowance at January 1, 2019 200,622 14,317 – 214,939
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (12,351) 697,085 – 684,734
Transfer from Stage 1 to Stage 3 – – – –
Transfer from Stage 2 to Stage 1 29 (486) – (457)
Transfer from Stage 2 to Stage 3 – – – –
Transfer from Stage 3 to Stage 1 – – – –
Transfer from Stage 3 to Stage 2 – – – –
New financial assets originated or purchased* 13,489 101,535 – 115,024
Changes in PDs/LGDs/EADs 78,542 4,099 – 82,641
Financial assets derecognized during the period (9,536) (4,721) – (14,257)
Fx and other movements 18,379 1,681 – 20,060
Total net P&L charge during the period 88,552 799,193 – 887,745
Write-offs, foreclosures and other movements (18,379) (1,681) – (20,060)
Total movements without P&L impact (18,379) (1,681) – (20,060)

Loss allowance at December 31, 2019 270,795 811,829 – 1,082,624

* Stage classification of new financial assets originated or purchased pertains to the stage as of end of year

81
 Parent
ECL Staging
Stage 1 Stage 2 Stage 3 Total
12-month ECL Lifetime ECL Lifetime ECL
Investments in debt instruments (FVOCI)
Loss allowance at January 1, 2019 3,496 2 – 3,498
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 – – – –
Transfer from Stage 1 to Stage 3 – – – –
Transfer from Stage 2 to Stage 1 19 (2) – 17
Transfer from Stage 2 to Stage 3
Transfer from Stage 3 to Stage 1
Transfer from Stage 3 to Stage 2
New financial assets originated or purchased* 9,638 – – 9,638
Changes in PDs/LGDs/EADs (96) – – (96)
Financial assets derecognized during the period (909) – – (909)
Fx and other movements 1,637 – – 1,637
Total net P&L charge during the period 10,289 (2) – 10,287
Write-offs, foreclosures and other movements (1,637) – – (1,637)
Total movements without P&L impact (1,637) – – (1,637)

Loss allowance at December 31, 2019 12,148 – – 12,148

* Stage classification of new financial assets originated or purchased pertains to the stage as of end of year

The corresponding movement of the gross carrying amount of the financial asset are shown below:

Consolidated
ECL Staging Total
Stage 1 Stage 2 Stage 3
Corporate and commercial lending 12-month ECL Lifetime ECL Lifetime ECL
Gross carrying amount at January 1, 2019 390,540,527 17,424,690 3,835,233 411,800,450
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (9,834,545) 9,834,545 – –
Transfer from Stage 1 to Stage 3 (718,875) – 718,875 –
Transfer from Stage 2 to Stage 1 9,676,644 (9,676,644) – –
Transfer from Stage 2 to Stage 3 – (138,087) 138,087 –
Transfer from Stage 3 to Stage 1 76,817 – (76,817) –
Transfer from Stage 3 to Stage 2 – 2,092 (2,092) –
New financial assets originated* 210,489,202 6,683,212 979,440 218,151,854
(Forward)

82 CHINA BANKING CO RPORATI ON

 Consolidated
ECL Staging Total
Stage 1 Stage 2 Stage 3
Corporate and commercial lending 12-month ECL Lifetime ECL Lifetime ECL
Changes in PDs/LGDs/EADs (18,208,483) (1,851,903) (156,935) (20,217,321)
Financial assets derecognized during the period (146,536,480) (2,839,497) (473,862) (149,849,839)
Fx and other movements (49,238) – 49,238 –
Total movements with P&L impact 44,895,042 2,013,718 1,175,934 48,084,694
Other movements without P&L impact
Write-offs, Foreclosures and other movements – – (226,471) (226,471)
Total movements without P&L impact – – (226,471) (226,471)

Gross carrying amount at December 31, 2019 435,435,569 19,438,408 4,784,696 459,658,673
* Stage classification of new financial assets originated pertains to the stage as of end of year

Consolidated
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Consumer lending 12-month ECL Lifetime ECL Lifetime ECL
Gross carrying amount at January 1, 2019 80,691,641 3,210,598 3,312,700 87,214,939
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (2,665,015) 2,665,015 – –
Transfer from Stage 1 to Stage 3 (1,116,995) – 1,116,995 –
Transfer from Stage 2 to Stage 1 449,278 (449,278) – –
Transfer from Stage 2 to Stage 3 – (147,540) 147,540 –
Transfer from Stage 3 to Stage 1 197,297 – (197,297) –
Transfer from Stage 3 to Stage 2 – 61,078 (61,078) –
New financial assets originated* 39,667,155 649,833 206,737 40,523,725
Changes in PDs/LGDs/EADs (6,141,036) (598,191) (254,693) (6,993,920)
Financial assets derecognized during the period (11,957,718) (788,449) (676,052) (13,422,219)
Fx and other movements (4,345) – 4,345 –
Total movements w/ P&L impact during the period 18,428,621 1,392,468 286,497 20,107,586
Other movements without P&L impact
Write-offs, Foreclosures and other movements – – (101,692) (101,692)
Total movements without P&L impact – – (101,692) (101,692)

Gross carrying amount at December 31, 2019 99,120,262 4,603,066 3,497,505 107,220,833
* Stage classification of new financial assets originated pertains to the stage as of end of year

83
 Consolidated
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Trade-related lending 12-month ECL Lifetime ECL Lifetime ECL
Gross carrying amount at January 1, 2019 12,110,169 1,684,378 23,319 13,817,866
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (11,355) 11,355 – –
Transfer from Stage 1 to Stage 3 (57,565) – 57,565 –
Transfer from Stage 2 to Stage 1 – – – –
Transfer from Stage 2 to Stage 3 – – – –
Transfer from Stage 3 to Stage 1 – – – –
Transfer from Stage 3 to Stage 2 – – – –
New financial assets originated* 10,583,215 64,584 160,927 10,808,726
Changes in PDs/LGDs/EADs (3,548) (1,442) (5,905) (10,895)
Financial assets derecognized during the period (12,028,751) (1,684,378) – (13,713,129)
Fx and other movements – – – –
Total movements w/ P&L impact during the period (1,518,004) (1,609,881) 212,587 (2,915,298)
Other movements without P&L impact
Write-offs, Foreclosures and other movements – – – –
Total movements without P&L impact – – – –

Gross carrying amount at December 31, 2019 10,592,165 74,497 235,906 10,902,568
* Stage classification of new financial assets originated pertains to the stage as of end of year

Consolidated
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Investments measured at Amortized Cost 12-month ECL Lifetime ECL Lifetime ECL
Gross carrying amount at January 1, 2019 158,916,818 4,040,112 151,836 163,108,766
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (7,275,056) 7,275,056 – –
Transfer from Stage 1 to Stage 3 – – – –
Transfer from Stage 2 to Stage 1 60,759 (60,759) – –
Transfer from Stage 2 to Stage 3 – – – –
Transfer from Stage 3 to Stage 1 – – – –
Transfer from Stage 3 to Stage 2 – – – –
New financial assets originated or purchased* 26,085,288 469,763 – 26,555,051
Changes in PDs/LGDs/EADs (5,655,491) (259,085) – (5,914,576)
Financial assets derecognized during the period (20,380,991) (2,826,926) (151,836) (23,359,753)
Fx and other movements 15 – – 15
Total movements w/ P&L impact during the period (7,165,476) 4,598,049 (151,836) (2,719,263)
Other movements without P&L impact
Write-offs, Foreclosures and other movements – – – –
Total movements without P&L impact – – – –

Gross carrying amount at December 31, 2019 151,751,342 8,638,161 – 160,389,503

* Stage classification of new financial assets originated or purchased pertains to the stage as of end of year

84 CHINA BANKING CO RPORATI ON

 Consolidated
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Investments measured at FVOCI (Debt) 12-month ECL Lifetime ECL Lifetime ECL
Gross carrying amount at January 1, 2019 9,978,200 1,676 – 9,979,876
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 – – – –
Transfer from Stage 1 to Stage 3 – – – –
Transfer from Stage 2 to Stage 1 1,676 (1,676) – –
Transfer from Stage 2 to Stage 3 – – – –
Transfer from Stage 3 to Stage 1 – – – –
Transfer from Stage 3 to Stage 2 – – – –
New financial assets originated or purchased* 19,413,175 – – 19,413,175
Changes in PDs/LGDs/EADs 163,055 – – 163,055
Financial assets derecognized during the period (4,109,314) – – (4,109,314)
Fx and other movements 27,254 – – 27,254
Total movements w/ P&L impact during the period 15,495,846 (1,676) – 15,49 4,170
Other movements without P&L impact
Write-offs, Foreclosures and other movements 19,742 – – 19,742
Total movements without P&L impact 19,742 – – 19,742

Gross carrying amount at December 31, 2019 25,493,788 – – 25,493,788

* Stage classification of new financial assets originated pertains to the stage as of end of year

Parent
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Corporate and commercial lending 12-month ECL Lifetime ECL Lifetime ECL
Gross carrying amount as at January 1, 2019 363,535,045 16,801,373 1,067,931 381,404,349
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (9,329,629) 9,329,629 – –
Transfer from Stage 1 to Stage 3 (211,470) – 211,470 –
Transfer from Stage 2 to Stage 1 9,561,196 (9,561,196) – –
Transfer from Stage 2 to Stage 3 – (531,115) 531,115 –
Transfer from Stage 3 to Stage 1 6,996 – (6,996) –
Transfer from Stage 3 to Stage 2 – – – –
New financial assets originated* 200,668,864 6,559,799 759,822 207,988,485
Changes in PDs/LGDs/EADs (18,203,940) (1,850,720) (36,121) (20,090,783)
Financial assets derecognized during the period (131,739,122) (2,742,800) (120,500) (134,602,422)
Fx and other movements (49,238) – 49,238 –
Total net P&L charge during the period 50,703,657 1,203,597 1,388,028 53,295,282
Other movements without P&L impact
Write-offs, foreclosures and other movements – – (225,010) (225,010)
Total movements without P&L impact – – (225,010) (225,010)

Gross carrying amount as at December 31, 2019 414,238,702 18,004,970 2,230,949 434,474,621
* Stage classification of new financial assets originated pertains to the stage as of end of year

85
 Parent
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Consumer lending 12-month ECL Lifetime ECL Lifetime ECL
Gross carrying amount as at January 1, 2019 47,908,408 2,823,817 1,952,306 52,684,531
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (1,992,394) 1,992,394 – –
Transfer from Stage 1 to Stage 3 (930,638) – 930,638 –
Transfer from Stage 2 to Stage 1 361,429 (361,429) – –
Transfer from Stage 2 to Stage 3 – (90,866) 90,866 –
Transfer from Stage 3 to Stage 1 168,023 – (168,023) –
Transfer from Stage 3 to Stage 2 – 48,004 (48,004) –
New financial assets originated* 23,337,705 421,402 176,486 23,935,593
Changes in PDs/LGDs/EADs (6,130,304) (596,418) (175,417) (6,902,139)
Financial assets derecognized during the period (4,019,642) (606,707) (240,319) (4,866,668)
Fx and other movements (4,345) – 4,345 –
Total net P&L charge during the period 10,789,834 806,380 570,572 12,166,786
Other movements without P&L impact
Write-offs, foreclosures and other movements – – (103,154) (103,154)
Total movements without P&L impact – – (103,154) (103,154)

Gross carrying amount as at December 31, 2019 58,698,242 3,630,197 2,419,724 64,748,163
* Stage classification of new financial assets originated pertains to the stage as of end of year

Parent
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Trade-related lending 12-month ECL Lifetime ECL Lifetime ECL
Gross carrying amount as at January 1, 2019 11,229,908 1,684,378 23,319 12,937,605
Movements with P&L impact
Transfers:
Transfer from Stage 1 to Stage 2 (11,355) 11,355 – –
Transfer from Stage 1 to Stage 3 (57,565) – 57,565 –
Transfer from Stage 2 to Stage 1 – – – –
Transfer from Stage 2 to Stage 3 – – – –
Transfer from Stage 3 to Stage 1 – – – –
Transfer from Stage 3 to Stage 2 – – – –
New financial assets originated* 10,583,215 64,584 160,927 10,808,726
Changes in PDs/LGDs/EADs (3,548) (1,442) (5,905) (10,895)
Financial assets derecognized during the period (11,148,490) (1,684,378) – (12,832,868)
Fx and other movements – – – –
Total net P&L charge during the period (637,743) (1,609,881) 212,587 (2,035,037)
Other movements without P&L impact
Write-offs, foreclosures and other movements – – – –
Total movements without P&L impact – – – –

Gross carrying amount as at December 31, 2019 10,592,165 74,497 235,906 10,902,568
* Stage classification of new financial assets originated pertains to the stage as of end of year

86 CHINA BANKING CO RPORATI ON

 Parent
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Investments in amortized cost 12-month ECL Lifetime ECL Lifetime ECL
Gross carrying amount as at January 1, 2019 150,639,222 4,040,112 – 154,679,334
Movements with P&L impact
Transfers: –
Transfer from Stage 1 to Stage 2 (7,275,056) 7,275,056 – –
Transfer from Stage 1 to Stage 3 – – – –
Transfer from Stage 2 to Stage 1 60,759 (60,759) – –
Transfer from Stage 2 to Stage 3 – – – –
Transfer from Stage 3 to Stage 1 – – – –
Transfer from Stage 3 to Stage 2 – – – –
New financial assets originated or purchased* 25,123,628 469,763 – 25,593,391
Changes in PDs/LGDs/EADs (5,655,491) (259,085) – (5,914,576)
Financial assets derecognized during the period (14,816,974) (2,826,926) – (17,643,900)
Fx and other movements – – – –
Total net P&L charge during the period (2,563,134) 4,598,049 – 2,034,915
Other movements without P&L impact
Write-offs, foreclosures and other movements – – – –
Total movements without P&L impact – – – –

Gross carrying amount as at December 31, 2019 148,076,088 8,638,161 – 156,714,249

* Stage classification of new financial assets originated pertains to the stage as of end of year

Parent
ECL Staging
Stage 1 Stage 2 Stage 3 Total
Investments at FVOCI (debt) 12-month ECL Lifetime ECL Lifetime ECL
Gross carrying amount as at January 1, 2019 8,141,359 1,676 – 8,143,035
Movements with P&L impact
Transfers: –
Transfer from Stage 1 to Stage 2 – – – –
Transfer from Stage 1 to Stage 3 – – – –
Transfer from Stage 2 to Stage 1 1,676 (1,676) – (496)
Transfer from Stage 2 to Stage 3 – – – –
Transfer from Stage 3 to Stage 1 – – – –
Transfer from Stage 3 to Stage 2 – – – –
New financial assets originated or purchased* 18,997,616 – – 18,997,616
Changes in PDs/LGDs/EADs 136,794 – – 136,794
Financial assets derecognized during the period (3,712,224) – – (3,712,224)
Fx and other movements – – – –
Total net P&L charge during the period 15,423,862 (1,676) – 15,422,186
Other movements without P&L impact
Write-offs, foreclosures and other movements – – – –
Total movements without P&L impact – – – –

Gross carrying amount as at December 31, 2019 23,565,221 – – 23,565,221

* Stage classification of new financial assets originated pertains to the stage as of end of year

87
 While the Group recognizes through the statement of income the movements in the expected credit losses computed using the models, the
Group also complies with BSP’s regulatory requirement to appropriate a portion of its retained earnings at an amount necessary to bring to
at least 1% the allowance for credit losses on loans (Note 24).

Consolidated Parent
2019 2018 2017 2019 2018 2017
Provision for Impairment and Credit
Losses P2,570,168 P141,076 P754,171 P2,205,062 (P1,957) P423,922
Retained Earnings, appropriated 468,442 340,409 – 468,442 340,409 –
P3,038,610 P481,485 P754,171 P2,673,504 P338,452 P423,922

17. DEPOSIT LIABILITIES

As of December 31, 2019 and 2018, 38.34% and 33.64% respectively, of the total deposit liabilities of the Group and 40.85% and 37.56%
of the Parent Company are subject to periodic interest repricing. The remaining deposit liabilities bear annual fixed interest rates ranging from
0.13% to 4.55% in 2019, 0.13% to 4.55% in 2018 and 0.13% to 3.65% in 2017.

Interest Expense on Deposit Liabilities

This account consists of:

Consolidated Parent Company

2019 2018 2017 2019 2018 2017
Demand P242,838 P257,380 P233,984 P189,776 P182,521 P163,524
Savings 6,356,024 3,490,378 1,120,422 6,247,134 3,429,446 1,072,849
Time 11,968,306 7,873,305 5,167,529 9,478,197 6,124,047 3,974,430
P18,567,168 P11,621,063 P6,521,935 P15,915,107 P9,736,014 P5,210,803

BSP Circular No. 830 requires reserves against deposit liabilities. As of December 31, 2019 and 2018, Due from BSP amounting to
P92.67 billion and P99.89 billion, respectively, for the Group and P80.61 billion and P93.09 billion, respectively, for the Parent Company
were set aside as reserves for deposit liabilities per latest report submitted BSP. As of December 31, 2019 and 2018, the Group is in
compliance with such regulation.

Long Term Negotiable Certificates of Deposits (LTNCD)

On August 3, 2016, the BOD of the Parent Company approved the issuance of Long Term Negotiable Certificates of Deposits (LTNCD) of up
to P20.00 billion in tranches of P5.00 billion to P10.00 billion each and with tenors ranging from 5 to 7 years to support the Group’s strategic
initiatives and business growth. On October 27, 2016, the Monetary Board of the BSP approved the LTNCD issuances. On November 18,
2016, the Parent Company issued the first tranche at par with aggregate principal amount of P9.58 billion due May 18, 2022. The LTNCDs
bear a fixed coupon rate of 3.65% per annum, payable quarterly in arrears. Subject to BSP rules, the Group has the option to pre−terminate
the LTNCDs as a whole but not in part, prior to maturity and on any interest payment date at face value plus accrued interest covering the
accrued and unpaid interest.

On June 2, 2017, the Parent Company issued at par LTNCDs with aggregate principal amount of P6.35 billion due December 22, 2022,
representing the second tranche of the P20.00 billion.

On March 7, 2018, the Board of Directors approved the Bank’s Peso funding program of up to P50 billion via a combination of Long−Term
Negotiable Certificate of Time Deposit and/or Retail Bonds and/or Commercial Papers.

On July 12, 2018, the Parent Company issued at par LTNCDs with aggregate principal amount of 10.25 billion due January 12, 2024,
representing the first tranche of the 20 billion LTNCD approved by BSP on June 14, 2018. The LTNCDs bear a fixed coupon rate of 4.55%
per annum, payable quarterly in arrears. The P20.00 billion LTNCD program is part of the Group’s funding program amounting to P50 billion.

The LTNCDs are included under the ‘Time deposit liabilities’ account.

88 CHINA BANKING CO RPORATI ON

18. BONDS PAYABLE

P30 Billion Peso Fixed Rate Bonds

On July 10, 2019, the Parent Company issued P30 billion peso fixed rate bonds, which bears a fixed coupon rate of 5.70% per annum,
payable monthly, and is due on January 2021. The Parent Company incurred transaction costs amounting to P257.73 million. In 2019,
amortization of this transaction costs amounted to P81.86 million.

$150 Million Bonds Payable to IFC

On June 18, 2019, the Parent Company issued a $150 million, seven-year bond to International Finance Corporation. The bond carries an
interest rate of 120 basis points over 6-month LIBOR.

Shortly thereafter, the Parent Company entered into a seven-year pay-fixed, receive-floating interest rate swap (see Note 26) with the
same principal terms to hedge the exposure to variable cash flow payments on the floating-rate bonds payable attributable to interest rate
risk (Note 6). The Parent Company incurred transaction costs amounting to 30.62 million. In 2019, amortization of this transaction costs
amounted to P12.08 million.

The Bond Subscription Agreement contains certain financial covenants that the Parent Company should comply during the term of the Bond,
including the following:

• Risk Weighted Capital Adequacy Ratio of not less than ten per cent (10%);
• Equity to Assets Ratio of not less than five per cent (5%);
• Aggregate Large Exposures Ratio of not more than four hundred per cent (400%);
• Open Credit Exposures Ratio of not more than twenty five per cent (25%);
• Fixed Assets Plus Equity Participations Ratio of not more than thirty five per cent (35%);
• Aggregate Foreign Exchange Risk Ratio of not more than twenty five per cent (25%);
• Single Currency Foreign Exchange Risk Ratio of not more than ten per cent (10%);
• Interest Rate Risk Ratio of not less than negative twenty five per cent (-25%) and not more than twenty five per cent (25%);
• Aggregate Interest Rate Risk Ratio of not less than negative fifty per cent (-50%) and not more than twenty per cent (20%);
• Open FX Position of not more than $50,000,000.

In addition, the Parent Company should also comply with the regulatory requirements related to Economic Group Exposure and Related
Party Exposure set by the BSP or the Bond Subscription Agreement, whichever is more stringent.

Noncompliance of these obligations may require the Parent Company to pay the bond immediately. As of December 31, 2019, the Parent
Company is in compliance with these covenants and regulatory requirements.

Interest expense on bonds payable amounted to P1.03 billion in 2019.

19. BILLS PAYABLE

The Group’s and the Parent Company’s bills payable consist of:

Consolidated Parent Company

2019 2018 2019 2018
Interbank loans payable P21,867,053 P28,426,800 P21,867,053 P28,426,800
Trade finance 6,152,153 5,804,832 6,152,153 5,804,832
BSP rediscounting (Note 10) 3,280,000 4,132,800 3,280,000 4,132,800
Promissory Notes 2,082,200 1,462,100 2,082,200 1,462,100
P33,381,406 P39,826,532 P33,381,406 P39,826,532

Interbank loans payable

Interbank loans payable consists of short−term dollar−denominated borrowings of the Parent Company with annual interest ranging from
1.30% to 3.15% and from 3.11% to 4.73% in 2019 and 2018, respectively.

89
 As of December 31, 2019, the carrying amount of foreign currency−denominated investment securities at amortized cost pledged by the
Parent Company as collateral for its interbank borrowings amounted to P9.00 billion. The carrying amount of peso−denominated investment
securities at amortized cost pledged by the Parent Company as collateral for its interbank borrowings amounted to P10.39 billion. The fair
value of investment securities at amortized cost pledged as collateral amounted to P19.71 billion as of December 31, 2019.

As of December 31, 2018, the carrying amount of foreign currency−denominated investment securities at amortized cost and FVOCI
pledged by the Parent Company as collateral for its interbank borrowings amounted to P13.32 billion and P0.73 billion, respectively.
The carrying amount of peso−denominated investment securities at amortized cost pledged by the Parent Company as collateral for its
interbank borrowings amounted to P20.69 billion. The fair value of investment securities at amortized cost pledged as collateral amounted
to P31.86 billion as of December 31, 2019.

As of December 31, 2019 and 2018, margin deposits amounting to P992.56 million and P930.82 million, respectively, are deposited with
various counterparties to meet the collateral requirements for its interbank loans payable.

Trade finance
As of December 31, 2019 and 2018, trade finance consists of the Parent Company’s borrowings from financial institutions using bank
trade assets as the basis for borrowing foreign currency. The refinancing amount should not exceed the aggregate amount of trade assets.

20. ACCRUED INTEREST AND OTHER EXPENSES

This account consists of:

Consolidated Parent Company
2019 2018 2019 2018
Accrued interest payable P1,889,291 P1,737,659 P1,702,098 P1,513,147
Accrued payable for employee benefits 1,651,271 958,643 1,651,271 958,643
Accrued taxes and other licenses 316,535 229,059 195,979 149,088
Accrued lease payable – 198,759 – 198,759
Accrued other expenses payable 264,205 718,405 100,992 522,515
P4,121,302 P3,842,525 P3,650,340 P3,342,152

21. OTHER LIABILITIES

This account consists of:

Consolidated Parent Company

2019 2018 2019 2018
Financial liabilities
Lease liabilities P3,394,925 P– P2,719,524 P–
Accounts payable 3,221,353 3,426,924 2,178,540 2,248,710
Expected credit losses on off−balance sheet
exposures 1,239,967 1,629,150 1,229,949 1,619,131
Due to PDIC 692,262 628,142 692,262 628,142
Other credits−dormant 447,346 241,720 447,346 241,720
Due to the Treasurer of the Philippines 435,287 386,930 416,444 378,871
Acceptances payable 413,149 348,738 413,149 357,832
Margin deposits 5,586 3,359 5,586 3,359
Miscellaneous (Note 23) 807,734 682,487 323,284 301,701
10,657,609 7,347,450 8,426,084 5,779,4666
Nonfinancial liabilities
Withholding taxes payable 341,901 325,508 296,613 270,346
Retirement liabilities (Note 25) 15,191 8,686 – –
357,092 334,19 4 296,613 270,346
P11,014,701 P7,681,644 P8,722,696 P6,049,812

90 CHINA BANKING CO RPORATI ON

 Movements in the lease liabilities account follows:

2019
Consolidated Parent Company
As of January 1, 2019 P3,669,457 P2,915,844
Additions 247,310 185,549
Interest expenses 265,539 207,744
Payments (787,381) (589,613)
Ending Balance P3,394,925 P2,719,524

Accounts payable includes payables to suppliers and service providers, and loan payments and other charges received from customers in
advance.

Off-balance sheet exposures (see Note 31) subject to ECL include syndicated and long-term lines. ECL for these exposures that was
recognized on January 1, 2018 amounted to P1.67 billion for the Group and P1.61 billion for the Parent Company.

Miscellaneous mainly includes sundry credits, inter−office float items, and dormant deposit accounts.

22. OTHER OPERATING INCOME AND MISCELLANEOUS EXPENSES

Service Charges, Fees and Commissions

Details of this account are as follows:

Consolidated Parent Company

2019 2018 2017 2019 2018 2017
Service and collection charges:
Deposits P510,517 P606,051 540,323 P510,517 P606,051 P539,941
Loans 806,509 303,817 276,054 46,967 47,397 34,758
Remittances 315,050 330,520 311,768 315,050 330,520 311,768
Others 252,254 109,290 112,725 228,734 107,652 99,116
1,884,320 1,349,677 1,240,870 1,101,268 1,091,620 985,583
Fees and commissions 1,412,344 1,427,607 1,200,854 523,435 438,107 409,415
P3,296,674 P2,777,283 2,441,724 P1,624,703 P1,529,727 1,394,998

Trading and Securities Gain – Net

This account consists of:

Consolidated Parent Company

2019 2018 2017 2019 2018 2017
Financial assets at FVOCI P269,478 (P2,104) P– P240,310 (P2,451) P–
AFS financial assets – – 363,350 – – 340,351
Financial assets designated at FVPL
(Note 9) – (36,766) 170,352 – (40,831) 170,352
Held−for−trading (Note 9) 703,982 (224,583) (55,257) 712,910 (224,583) (55,257)
Derivative assets (Note 25) (88,978) (19,827) (3,510) (115,346) (19,827) (3,510)
Investment securities at amortized – –
– 11,728 11,728 –
cost
HTM financial assets – 5,025 – – 5,025
P884,482 (P271,552) P479,960 P837,874 (P275,964) P399,760

91
 Miscellaneous Income
Details of this account are as follows:

Consolidated Parent Company

2019 2018 2017 2019 2018 2017
Bancassurance (Note 11) P303,454 P357,786 P360,009 P300,664 P 357,786 P360,009
Recovery of charged off assets 244,947 144,924 199,014 219,055 100,517 184,272
Rental on bank premises 121,507 111,572 111,651 88,848 80,388 83,911
Dividends (Note 9) 107,969 127,084 91,073 107,050 126,386 91,073
Fund transfer fees 52,976 49,171 59,682 52,976 49,171 59,682
Rental safety deposit boxes 28,987 26,341 24,933 28,987 26,341 24,825
Miscellaneous income
333,217 444,863 670,161 265,215 389,545 587,884
(Notes 12, 13 and 15)
P1,193,057 P1,261,741 P1,516,523 P1,062,795 P1,130,134 P1,391,656

On April 11, 2017, the BTr paid the Group the final tax withheld (FWT) from the proceeds of the Poverty Eradication and Alleviation
Certificates (PEACe) bonds last October 18, 2011, plus 4.00% interest per annum from October 19, 2011 to April 10, 2017. Total
settlement amount were paid in the form of 3−year Retail Treasury Bonds with interest of 4.25% per annum. The settlement resulted
in gain amounting to P381.65 million and P356.77 million for the Group and Parent Company, respectively, which is presented under
‘Miscellaneous income’ in 2017.

Miscellaneous Expenses
Details of this account are as follows:

Consolidated Parent Company

2019 2018 2017 2019 2018 2017
Information technology P635,422 P500,459 P402,314 P575,316 P452,540 P339,214
Service charges 207,782 231,895 219,430 206,754 231,895 219,430
Litigations 243,124 198,011 176,602 60,811 65,157 22,815
Freight 58,397 37,593 38,909 38,911 24,352 27,953
Broker’s fee 27,370 35,843 39,129 27,370 31,891 39,128
Clearing and processing fee 15,331 22,024 21,252 15,331 17,355 16,320
Membership fees and dues 21,525 17,756 18,642 17,369 16,260 17,160
Miscellaneous expense 1,113,988 1,011,053 951,274 948,159 779,702 808,638
P2,322,939 P2,054,634 P1,867,552 P1,890,021 P1,619,152 P1,490,658

92 CHINA BANKING CO RPORATI ON

23. MATURITY ANALYSIS OF ASSETS AND LIABILITIES

The following tables present both the Group’s and Parent Company’s assets and liabilities as of December 31, 2019 and 2018 analyzed
according to when they are expected to be recovered or settled within one year and beyond one year from the respective reporting date:

Consolidated
2019 2018
Within Over Within Over
Twelve Months Twelve Months Total Twelve Months Twelve Months Total
Financial assets
Cash and other cash items P16,839,755 P– P16,839,755 P15,639,474 P– P15,639,474
Due from BSP 100,174,398 – 100,174,398 101,889,773 – 101,889,773
Due from other banks 9,900,642 – 9,900,642 9,455,447 – 9,455,447
Interbank loans receivable and SPURA 17,036,460 – 17,036,460 11,998,040 – 11,998,040
Financial assets at FVPL 17,302,294 1,197,817 18,500,111 6,273,368 1,322,894 7,596,262
Financial assets at FVOCI 894,386 25,238,974 26,133,360 1,364,962 8,732,542 10,097,504
Investment securities at amortized cost 5,173,756 164,116,954 169,290,710 9,893,261 163,018,876 172,912,137
Loans and receivables – gross 167,801,401 410,027,636 577,829,037 166,260,382 346,629,390 512,889,772
Accrued interest receivable – gross 7,434,382 – 7,434,382 6,000,736 – 6,000,736
Other assets – gross 3,744,259 1,203,502 4,947,761 3,294,964 1,121,036 4,416,000
346,301,733 601,784,883 948,086,616 332,070,407 520,824,738 852,895,145
Nonfinancial assets
Bank premises, furniture, fixtures
and equipment − net of accumulated
depreciation and amortization – 9,155,234 9,155,234 – 6,450,458 6,450,458
Investment properties − net of accumulated
depreciation – 5,466,196 5,466,196 – 6,064,835 6,064,835
Deferred tax assets – 3,370,949 3,370,949 – 2,514,889 2,514,889
Investments in associates – 704,169 704,169 – 335,092 335,092
Intangible assets – 4,078,678 4,078,678 – 4,215,199 4,215,199
Goodwill – 839,748 839,748 – 839,748 839,748
Other assets – gross 1,628,844 876,221 2,505,065 1,351,634 1,211,331 2,562,965
1,628,844 24,491,195 26,120,039 1,351,634 21,631,552 22,983,186
Allowance for impairment and credit losses (Note 16) (11,630,778) (9,551,150)
Unearned discounts (Note 10) (349,896) (255,535)
(11,980,674) (9,806,685)
P962,225,981 P866,071,646
Financial liabilities
Deposit liabilities 764,810,192 10,617,669 775,427,861 682,760,286 39,363,010 722,123,296
Bills payable 33,381,406 – 33,381,406 39,826,532 – 39,826,532
Bonds payable 29,828,359 7,566,039 37,394,398
Manager’s checks 1,998,678 – 1,998,678 2,577,175 – 2,577,175
Accrued interest and other expenses* 2,153,496 – 2,153,496 2,098,994 352,335 2,451,329
Derivative liabilities 1,036,052 – 1,036,052 455,150 – 455,150
Derivative Contracts Designated as Hedges 51,949 – 51,949
Other liabilities 10,657,609 – 10,657,609 6,110,225 1,213,812 7,324,037
843,917,741 18,183,708 862,101,449 733,828,362 40,929,157 774,757,519
Nonfinancial liabilities
Accrued interest and other expenses 316,535 1,651,271 1,967,806 161,542 1,229,654 1,391,196
Deferred tax liabilities – 1,083,378 1,083,378 – 1,231,145 1,231,145
Income tax payable 540,662 – 540,662 477,585 – 477,585
Other liabilities 217,076 140,016 357,092 325,508 32,102 357,610
P844,992,014 P21,058,373 P866,050,387 P734,792,997 P43,422,058 P778,215,055
*Accrued interest and other expenses include accrued interest payable and accrued other expenses payable (Note 19).

93
 Parent Company
2019 2018
Within Over Within Over
Twelve Months Twelve Months Total Twelve Months Twelve Months Total
Financial assets
Cash and other cash items P14,856,844 P– P14,856,844 P13,705,304 P– P13,705,304
Due from BSP 88,109,650 – 88,109,650 95,092,944 – 95,092,944
Due from other banks 8,645,547 – 8,645,547 7,837,894 – 7,837,894
SPURA 10,027,609 – 10,027,609 8,998,040 – 8,998,040
Financial assets at FVPL 17,246,285 1,197,817 18,444,102 5,366,903 1,322,894 6,689,797
Financial assets at FVOCI 410,565 23,760,064 24,170,629 1,059,474 7,153,536 8,213,010
Investment securities at amortized cost 4,645,719 160,668,554 165,314,273 6,852,074 157,187,330 164,039,404
Loans and receivables – gross 144,905,958 365,253,735 510,159,693 144,064,744 303,001,501 447,066,245
Accrued interest receivable − gross 6,565,736 – 6,565,736 5,171,374 – 5,171,374
Other assets – gross 2,137,322 235,049 2,372,371 1,773,527 224,035 1,997,562
297,551,235 551,115,219 848,666,454 289,922,275 468,889,296 758,811,574
Nonfinancial assets
Bank premises, furniture, fixtures
and equipment − net of accumulated
depreciation and amortization – 7,468,646 7,468,646 – 5,265,386 5,265,386
Investment properties − net of accumulated –
depreciation 2,611,501 2,611,501 – 2,309,762 2,309,762
Deferred tax assets – 2,287,956 2,287,956 – 1,739,219 1,739,219
Investments in subsidiaries – 15,129,118 15,129,118 – 14,333,567 14,333,567
Investment in associates – 704,169 704,169 – 335,092 335,092
Intangible assets – 945,916 945,916 – 915,531 915,531
Goodwill – 222,841 222,841 – 222,841 222,841
Other assets – gross 1,404,959 499,711 1,904,670 1,056,495 756,160 1,812,655
1,404,959 29,869,858 31,274,817 1,056,495 25,877,558 26,934,053
Allowances for impairment and credit losses (Note 16) (9,470,163) (7,284,317)
Unearned discounts (Note 10) (290,711) (208,377)
(9,760,874) (7,492,694)
P870,180,397 P778,252,935
Financial liabilities
Deposit liabilities 687,530,863 233,590 687,764,453 606,235,158 32,008,204 638,243,362
Bills payable 33,381,406 – 33,381,406 39,826,532 – 39,826,532
Bonds payable 29,828,359 7,566,039 37,394,398
Manager’s checks 1,535,936 – 1,535,936 2,069,812 – 2,069,812
Accrued interest and other expenses* 1,803,090 – 1,803,090 2,035,662 – 2,035,662
Derivative liabilities 1,036,052 – 1,036,052 455,150 – 455,150
Derivative Contracts Designated as Hedges 51,949 – 51,949
Other liabilities 8,426,083 – 8,426,083 5,779,467 – 5,779,467
763,593,738 7,799,629 771,393,367 656,401,781 32,008,204 688,409,985
Nonfinancial liabilities
Accrued interest and other expenses 195,979 1,651,271 1,847,250 149,088 1,157,402 1,306,490
Income tax payable 479,923 – 479,923 414,233 – 414,233
Other liabilities 296,613 – 296,613 270,346 – 270,346
P764,566,253 P9,450,900 P774,017,153 P657,235,447 P33,165,606 P690,401,054
*Accrued interest and other expenses include accrued interest payable and accrued other expenses payable (Note 19).

94 CHINA BANKING CO RPORATI ON

24. EQUITY

The Parent Company’s capital stock consists of (amounts in thousands, except for number of shares):

2019 2018
Shares Amount Shares Amount
Common stock − P10.00 par value
Authorized – shares 3,300,000,000 3,300,000,000
Issued and outstanding
Balance at beginning of year 2,685,899,812 P26,858,998 2,684,771,716 P26,847,717
Stock rights – – – –
Additional issuance of shares – – 1,128,096 11,281
Stock dividends* – – – –
2,685,899,812 P26,858,998 2,685,899,812 P26,858,998
*The stock dividends declared include fractional shares equivalent to 1,009 in 2018.

The Parent Company shares are listed in the Philippine Stock Exchange.

On June 7, 2017, the Parent Company and the Trust and Asset Management Group (on behalf of the CBC Employees Retirement Plan)
entered into a subscription agreement whereas the latter will subscribe to 1,128,096 new common shares of the Parent Company at a
subscription price per share equal to the higher between the closing price of the Parent Company’s stock dividend or the par value of 10.00
per share.

On January 24, 2018, the BOD of the Parent Company, during a special board meeting, confirmed the issuance of the shares to CBC
Employees Retirement Plan in accordance with the subscription agreement which was paid at a subscription price of P33.40 per share
(closing price of the Group’s shares at the Philippine Stock Exchange on October 20, 2018 which is the record date of the Parent Company’s
stock dividend).

The summarized information on the Parent Company’s registration of securities under the Securities Regulation Code follows:

Date of SEC Approval Authorized Shares*

April 12, 1991 100,000
October 7, 1993 150,000
August 30, 1994 200,000
July 26, 1995 250,000
September 12, 1997 500,000
September 5, 2005 1,000,000
September 14, 2007 1,600,000
September 5, 2008 2,000,000
August 29, 2014 2,500,000
September 29, 2018 3,300,000
* Restated to show the effects of the ten−for−one stock split in 2012

As reported by the Parent Company’s transfer agent, Stock Transfer Service, Inc., the total number of stockholders is 1,902 and 1,928 as
of December 31, 2019 and 2018, respectively.

95
 Dividends
Details of the Parent Company’s cash dividend payments follow:

Cash Dividends

Date of Date of Date of Cash Dividend

Declaration Record Payment Per Share
May 02, 2019 May 17, 2019 May 31, 2019 0.88
May 03, 2018 May 17, 2018 June 01, 2018 0.83
May 04, 2017 May 18, 2017 June 02, 2017 0.80
May 05, 2016 May 23, 2016 June 03, 2016 1.00
May 07, 2015 August 12, 2015 September 09, 2015 1.00
May 08, 2014 September 19, 2014 October 15, 2014 1.00
May 02, 2013 July 19, 2013 August 14, 2013 1.20

Stock Dividends

Date of Date of Date of Stock Dividend

Declaration Record Payment Per Share
March 15, 2017 October 20, 2017 November 03, 2017 8%
May 05, 2016 May 23, 2016 June 03, 2016 8%
May 07, 2015 August 12, 2015 September 09, 2015 8%
May 08, 2014 September 19, 2014 October 15, 2014 8%
May 02, 2013 July 19, 2013 August 14, 2013 10%

Surplus
The computation of surplus available for dividend declaration in accordance with SEC Memorandum Circular No. 11 issued in December
2008 differs to a certain extent from the computation following BSP guidelines.

As of December 31, 2019 and 2018, surplus includes the amount of P1.28 billion, net of deferred tax liability of P547.40 million, representing
transfer of revaluation increment on land which was carried at deemed cost when the Group transitioned to PFRS in 2005 (Note 12). This
amount will be available to be declared as dividends upon sale of the underlying land.

In the consolidated financial statements, a portion of the Group’s surplus corresponding to the net earnings of the subsidiaries and associates
amounting to P1.02 billion and P1.64 billion as of December 31, 2019 and 2018, respectively, is not available for dividend declaration. The
accumulated equity in net earnings becomes available for dividends upon declaration and receipt of cash dividends from the investees.

Reserves
In compliance with BSP regulations, 10.00% of the Parent Company’s profit from trust business is appropriated to surplus reserve. This
annual appropriation is required until the surplus reserves for trust business equals 20.00% of the Parent Company’s authorized capital stock.

Upon adoption of PFRS 9, BSP requires appropriation of a portion of the Group’s Retained Earnings at an amount necessary to bring to at
least 1% the allowance for credit losses on loans (Note 16).

Capital Management
The primary objectives of the Group’s capital management are to ensure that it complies with externally imposed capital requirements and
that it maintains strong credit ratings and healthy capital ratios in order to support its business and to maximize shareholders’ value.

The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of
its activities. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividend payment to shareholders, return
capital to shareholders or issue capital securities. No changes were made in the objectives, policies and processes as of December 31, 2019
and 2018.

96 CHINA BANKING CO RPORATI ON

Regulatory Qualifying Capital
Under existing BSP regulations, the determination of the Parent Company’s compliance with regulatory requirements and ratios is based
on the amount of the Parent Company’s unimpaired capital (regulatory capital) as reported to the BSP. This is determined on the basis of
regulatory accounting policies which differ from PFRS in some respects.

In addition, the risk−based capital ratio of a bank, expressed as a percentage of qualifying capital to risk−weighted assets (RWA), should
not be less than 10.00% for both solo basis (head office and branches) and consolidated basis (Parent Company and subsidiaries
engaged in financial allied undertakings but excluding insurance companies). Qualifying capital and RWA are computed based on BSP
regulations. RWA consists of total assets less cash on hand, due from BSP, loans covered by hold−out on or assignment of deposits,
loans or acceptances under letters of credit to the extent covered by margin deposits and other non−risk items determined by the
Monetary Board of the BSP.

On August 4, 2006, the BSP, under BSP Circular No. 538, issued the prescribed guidelines implementing the revised risk−based capital
adequacy framework for the Philippine banking system to conform to Basel II capital adequacy framework. The BSP guidelines took effect
on July 1, 2007. Thereafter, banks were required to compute their CAR using these guidelines.

Standardized credit risk weights were used in the credit assessment of asset exposures. Third party credit assessments were based
on ratings by Standard & Poor’s, Moody’s and Fitch, while PhilRatings were used on peso−denominated exposures to Sovereigns,
MDBs, Banks, LGUs, Government Corporations, Corporates.

On January 15, 2013, the BSP issued Circular No. 781, Basel III Implementing Guidelines on Minimum Capital Requirements, which
provides the implementing guidelines on the revised risk−based capital adequacy framework particularly on the minimum capital and
disclosure requirements for universal banks and commercial banks, as well as their subsidiary banks and quasi−banks, in accordance
with the Basel III standards. The circular took effect on January 1, 2014.

The Circular sets out a minimum Common Equity Tier 1 (CET1) ratio of 6.00% and Tier 1 capital ratio of 7.50%. It also introduces a
capital conservation buffer of 2.50% comprised of CET1 capital. The BSP’s existing requirement for Total CAR remains unchanged at
10.00% and this ratio shall be maintained at all times.

Further, existing capital instruments as of December 31, 2010 which do not meet the eligibility criteria for capital instruments under the
revised capital framework shall no longer be recognized as capital upon the effectivity of Basel III. Capital instruments issued under BSP
Circular Nos. 709 and 716 (the circulars amending the definition of qualifying capital particularly on Hybrid Tier 1 and Lower Tier 2 capitals),
starting January 1, 2011 and before the effectivity of BSP Circular No. 781, shall be recognized as qualifying capital until December 31,
2017. In addition to changes in minimum capital requirements, this Circular also requires various regulatory adjustments in the calculation
of qualifying capital.

The CAR of the Group and the Parent Company as of December 31, 2019 as reported to the BSP are shown in the table below.

Consolidated Parent Company

2019 2018 2019 2018
(Amounts in Million Pesos)
CET 1 Capital P92,758 P84,726 P89,999 P81,957
Less: Regulatory Adjustments 11,492 10,492 19,496 17,208
81,266 74,234 70,503 64,749
Additional Tier 1 Capital − − − −
Less: Regulatory Adjustments − − − −
− − − −
Net Tier 1 Capital 81,266 74,234 70,503 64,749
Tier 2 Capital 5,799 5,659 5,118 4,982
Less: Regulatory Adjustments − − − −
Net Tier 2 Capital 5,799 5,659 5,118 4,982
Total Qualifying Capital P87,067 P79,893 P75,621 P69,731

97
 Consolidated Parent Company
2019 2018 2019 2018
(Amounts in Million Pesos)
Credit RWA P579,653 P565,777 P511,015 P498,030
Market RWA 11,433 5,154 11,434 5,204
Operational RWA 45,623 39,470 36,385 31,877
Total RWA P636,709 P610,401 P558,834 P535,111

CET 1 capital ratio 12.76% 12.16% 12.62% 12.10%

Tier 1 capital ratio 12.76% 12.16% 12.62% 12.10%
Total capital ratio 13.67% 13.09% 13.53% 13.03%

The Parent Company has complied with all externally imposed capital requirements throughout the period.

The issuance of BSP Circular No. 639 covering the ICAAP in 2009 supplements the BSP’s risk−based capital adequacy framework under
Circular No. 538. In compliance with this circular, the Parent Company has adopted and developed its ICAAP framework to ensure that
appropriate level and quality of capital are maintained by the Group. Under this framework, the assessment of risks extends beyond the
Pillar 1 set of credit, market and operational risks and onto other risks deemed material by the Parent Company. The level and structure of
capital are assessed and determined in light of the Parent Company’s business environment, plans, performance, risks and budget, as well
as regulatory edicts. BSP requires submission of an ICAAP document every March 31. The Group has complied with this requirement.

Leverage Ratio
On June 9, 2015, BSP issued circular No. 881, which approved the guidelines for the implementation of the Basel 3 Leverage Ratio in the
Philippines. The Basel III Leverage Ratio is designed to act as a supplementary measure to the risk-based capital requirements. The leverage
ratio intends to restrict the build-up of leverage in the banking sector to avoid destabilizing deleveraging processes which can damage the
broader financial system and the economy. Likewise, it reinforces the risk-based requirements with a simple, non-risk based “backstop”
measure. The Basel III leverage ratio is defined as the capital measure (the numerator) divided by the exposure measure (the denominator).
The monitoring of the leverage ratio shall be implemented as a Pillar 1 minimum requirement effective on 1 July 2018.

The BLR of the Group and the Parent Company as of December 31, 2019 as reported to the BSP are shown in the table below.

Consolidated Parent Company

2019 2018 2019 2018
(Amounts in Million Pesos)
Tier 1 Capital P81,266 P74,234 P70,503 P64,749
Exposure Measure 975,329 842,549 871,678 744,599
Leverage Ratio 8.33% 8.81% 8.09% 8.70%

Liquidity Coverage Ratio

On 18 February 2016, BSP issued circular no. 905 which approved the attached liquidity standards, which include guidelines on liquidity
coverage ratio (LCR), and LCR disclosure standards that are consistent with the Basel III framework. Banks are required to adopt Basel III’s
Liquidity Coverage Ratio (LCR) aimed at strengthening the short-term liquidity position of banks. This requires banks to have available High
Quality Liquid Assets (HQLA) to meet anticipated net cash outflow for a 30-day period under stress conditions. The standard prescribes that,
under a normal situation, the value of the liquidity ratio be no lower than 100% on a daily basis because the stock of unencumbered HQLA
is intended to serve as a defense against potential onset of liquidity stress. As of December 31, 2019 and 2018, the LCR in single currency
is 127.65% and 111.73%, respectively, for the Group and 126.29% and 112.79%, respectively, for the Parent Company.

Net Stable Funding Ratio

On 24 May 2018, BSP issued circular no. 1007 which approved the implementing guidelines on the adoption of the Basel III Framework
on Liquidity Standards - Net Stable Funding Ratio (NSFR). Banks are required to adopt Basel III’s Net Stable Funding Ratio (NSFR) aimed to
promote long-term resilience of banks against liquidity risk. Banks shall maintain a stable funding profile in relation to the composition of its
assets and off-balance sheet activities. The NSFR complements the Liquidity Coverage Ratio (LCR), which promotes short-term resilience of
a Bank’s liquidity profile. As of December 31, 2019 and 2018, the NSFR is 121.31% and 117.43%, respectively, for the Group and 120.01%
and 116.08%, respectively, for the Parent Company.

98 CHINA BANKING CO RPORATI ON

25. RETIREMENT PLAN

The Group has separate funded noncontributory defined benefit retirement plans covering substantially all its officers and regular employees.
The retirement plans are administered by the Parent Company’s Trust Group which acts as the trustee of the plans. Under these retirement
plans, all covered officers and employees are entitled to cash benefits after satisfying certain age and service requirements. The latest
actuarial valuation studies of the retirement plans were made as of December 31, 2019.

The Group’s annual contribution to the retirement plan consists of a payment covering the current service cost, unfunded actuarial accrued
liability and interest on such unfunded actuarial liability.

The amounts of net defined benefit asset in the balance sheets follow:

Consolidated Parent Company

2019 2018 2019 2018
Net plan assets (Note 15) P543,471 P777,827 P499,711 P756,159
Retirement liabilities (Note 21) (15,191) (8,686) – –
P528,280 P769,141 P499,711 P756,159

The movements in the defined benefit asset, present value of defined benefit obligation and fair value of plan assets follow:

Consolidated
2019

Remeasurements in OCI

Net benefit cost

Return on
plan assets Actuarial Actuarial Actuarial
(excluding changes arising changes arising changes arising
amount from from changes from changes Changes in
January 1, Current Net pension Benefits included experience in financial in demographic remeasurement Contribution December 31,
2019 service cost Net interest expense* paid in net interest) adjustments assumptions assumptions gains (losses) by employer 2019

(l) = a + b + e + f
(a) (c) (d) (e) = c + d (f) (g) (h) (i) (j) = g + h + i (k) +j+k
Fair value of plan
assets P4,859,249 P- P347,965 P347,965 (P307,702) (P188,983) P– P– P– (P188,983) P629,871 P5,340,401
Present value of
defined benefit
obligation 4,090,108 398,065 292,955 691,020 (307,702) – (48,548) 830,609 (443,366) 338,695 – 4,812,121
Net defined benefit
asset P769,141 (P398,065) P55,010 (P343,055) P– (P188,983) P48,548 (P830,609) P443,366 (P527,678) P629,871 PP528,280
*Presented under Compensation and fringe benefits in the statements of income.

Parent Company
2018

Remeasurements in OCI

Return on
plan assets Actuarial Actuarial Actuarial
Net benefit cost (excluding changes arising changes arising changes arising
amount from from changes from changes Changes in
January 1, Current Net pension Benefits included experience in demographic in financial remeasurement Contribution December 31,
2019 service cost Net interest expense* paid in net interest) adjustments assumptions assumptions gains (losses) by employer 2019

(l) = a + b + e + f
(a) (c) (d) (e) = c + d (f) (g) (h) (i) (j) = g + h + i (k) +j+k
Fair value of plan
assets P4,868,423 P− P272,914 P272,914 (P275,805) (P619,071) P− P− (P619,071) P612,788 P4,859,249
Present value of
defined benefit
obligation 3,992,824 431,972 223,936 655,907 (275,805) − 38,390 (321,209) (282,819) 4,090,108
Net defined benefit
asset P875,599 (P431,972) P382,993 (P382,994) P− (P619,071) (P38,390) P321,209 (P336,252) P612,788 P769,141
*Presented under Compensation and fringe benefits in the statements of income.

99
 Parent Company

2019

Remeasurements in OCI

Actuarial
changes arising
from changes
Return on in demographic
plan assets Actuarial Actuarial Assumptions
Net benefit cost (excluding changes arising changes arising
amount from from changes Changes in
January 1, Current Net pension Transfer from Benefits included experience in financial remeasurement Contribution December 31,
2019 service cost Net interest expense* Affiliates paid in net interest) adjustments assumptions gains (losses) by employer 2019

(m) = a + b + e + f
(a) (c) (d) (e) = c + d (f) (g) (h) (i) (j) (k) =f+g+h+i (l) +j+k

Fair value of plan

assets P4,467,637 P– P319,436 P319,436 P– (P286,575) (P196,884) P– P– (P196,884) P480,000 P4,783,615
Present value of
defined benefit
obligation 3,711,477 311,538 265,378 576,916 260 (286,575) – (29,515) 650,700 (339,360) 281,826 4,283,904

Net defined benefit

asset P756,160 (P311,538) P54,058 (P257,480) (P260) P– (P196,884) P29,515 (P650,700) P339,360 (P478,710) P480,000 P499,711
*Presented under Compensation and fringe benefits in the statements of income.

Parent Company
2018
Remeasurements in OCI

Return on
plan assets Actuarial Actuarial
Net benefit cost (excluding changes arising changes arising
amount from from changes Changes in
January 1, Current Net pension Benefits included experience in financial remeasurement Contribution December 31,
2019 service cost Net interest expense* paid in net interest) adjustments assumptions gains (losses) by employer 2019
(l) = a + b + e + f
(a) (c) (d) (e) = c + d (f) (g) (h) (i) (j) = g + h + i (k) +j+k
Fair value of plan assets P4,558,199 P− P255,259 P255,259 (P235,193) (P590,629) P− P− (P590,629) P480,000 4,467,637
Present value of defined
benefit obligation 3,566,814 324,756 199,742 324,956 (235,193) − 97,785 (245,646) (147,861) − 3,711,477
Net defined benefit asset P991,386 (P324,756) P55,517 (P69,697) P− (P590,629) P97,785 P245,646 (P442,768) P480,000 P756,160
*Presented under Compensation and fringe benefits in the statements of income.

The Group and the Parent Company is recommended to contribute to its defined benefit pension plan in 2020 amounting to P134.13 million
and P30.15 million, respectively.

In 2019 and 2018, the major categories of plan assets as a percentage of the fair value of total plan assets are as follows:

Consolidated Parent Company

2019 2018 2019 2018
Parent Company shares (Note 30) 25.06% 31.54% 28.58% 33.76%
Equity instruments 3.85% 23.83% 3.21% 21.76%
Cash and cash equivalents 0.99% 10.17% 0.82% 9.07%
Debt instruments 61.76% 19.39% 63.48% 19.39%
Other assets 7.80% 15.08% 3.91% 16.03%
100.00% 100.00% 100.00% 100.00%

100 CHINA BANKING CO RPORATI ON

The following table shows the breakdown of fair value of the plan assets:

Consolidated Parent Company

2019 2018 2019 2018
Deposits in banks P52,757 P560,672 P39,407 P399,395
Financial assets at FVPL
Quoted debt securities 2,981,233 – 2,754,412 –
Quoted equity securities 205,620 868,381 153,330 839,145
Parent Company shares 1,367,210 – 1,367,210 –
Investments in unit investment trust fund 316,929 – 282,059 –
Financial assets at FVOCI
Quoted debt securities – 977,735 – 832,834
Quoted equity securities – 46,101 – 15,023
Parent Company shares – 1,487,360 – 1,487,360
Investments in unit investment – 160,762 – 117,097
trust fund
Corporate bonds – 8,750 – 8,750
Loans and receivable 1,921 523,483 1,921 520,663
Investment properties* 162,323 162,323 162,323 162,323
Other assets 252,409 63,144 22,952 23,019
P5,340,402 P4,858,711 P4,783,614 P4,405,609
* Investment properties comprise properties located in Manila.

The carrying value of the plan assets of the Group and Parent Company amounted to P5.34 billion and P4.81 billion, respectively, as of
December 31, 2019, and P4.78 billion and P4.41 billion, respectively, as of December 31, 2019

The principal actuarial assumptions used in 2019 and 2018 in determining the retirement asset (liability) for the Group’s and Parent Company’s
retirement plans are shown below:

2019
Parent CBSI CIBI CBC−PCCI CBCC CBSC
Discount rate:
January 1 7.15% 7.27% 7.33% 7.33% 7.38% 7.40%
December 31 4.36% 4.47% 4.47% 4.76% 4.30% 4.24%
Salary increase rate 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%

2018
Parent CBSI CIBI CBC−PCCI CBCC CBSC
Discount rate:
January 1 5.60% 5.63% 5.82% 5.82% 5.85% 5.85%
December 31 7.15% 7.27% 7.33% 7.33% 7.38% 7.4%
Salary increase rate 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%

101
 The sensitivity analysis below has been determined based on the impact of reasonably possible changes of each significant assumption on
the defined benefit liability as of the end of the reporting period, assuming all other assumptions were held constant:

December 31, 2019 Parent CBSI CIBI CBC−PCCI CBCC CBSC

Discount rate
(+1%) (P227,157) (P45,326) (P723) (P4,021) (P1,330) (P234)
(−1%) 325,654 58,726 1,065 9,049 1,628 297

Salary increase rate

(+1%) 301,453 55,151 992 8,431 1,547 282
(−1%) (218,813) (43,755) (705) (3,918) (1,296) (228)

December 31, 2018 Parent CBSI CIBI CBC−PCCI CBCC CBSC

Discount rate
(+1%) (P84,696) (P28,746) (P469) (P1,980) (P1,001) (P206)
(−1%) 133,008 37,942 608 2,504 1,260 272

Salary increase rate

(+1%) 126,701 36,802 598 2,443 1,236 268
(−1%) (83,078) (28,456) (470) (1,969) (1,002) (207)

The weighted average duration of the defined benefit obligation are presented below:

December 31, 2019 December 31, 2018

Parent Company 9 13
CBSI 11 18
CIBI 11 19
CBC−PCCI 16 19
CBCC 8 23
CBSC 7 24

The maturity analyses of the undiscounted benefit payments as of December 31, 2019 and 2018 are as follows:

December 31, 2019 Parent CBSI CIBI CBC−PCCI CBCC CBSC

1 year and less P1,010,732 P10,639 P– P3,192 P– P–
More than 1 year – –
to 5 years 1,245,756 70,231 5,084 32,698
More than 5 years –
to 10 years 2,559,422 305,122 9,295 20,648 1,381
More than 10 years –
to 15 years 2,557,933 726,316 5,788 107,204 –
More than 15 years
to 20 years 4,691,189 896,080 7,612 118,326 106,708 3,986
More than 20 years 28,578,876 10,967,703 537,282 1,260,108 360,469 127,967

102 CHINA BANKING CO RPORATI ON

 December 31, 2018 Parent CBSI CIBI CBC−PCCI CBCC CBSC
1 year and less P1,020,830 P9,552 P1,578 P538 P– P–
More than 1 year
to 5 years 1,112,345 81,367 1,306 17,652 – –
More than 5 years
to 10 years 2,349,644 210,666 10,410 36,531 5,015 –
More than 10 years
to 15 years 2,537,302 715,066 5,796 54,937 – –
More than 15 years
to 20 years 4,117,126 972,734 – 141,549 103,091 3,741
More than 20 years 27,553,459 11,606,160 455,722 1,097,718 381,490 182,074

26. DERIVATIVE FINANCIAL INSTRUMENTS

Occasionally, the Parent Company enters into forward exchange contracts as an accommodation to its clients. These derivatives are not
designated as accounting hedges.

As of December 31, 2019 and 2018, the aggregate notional amount of outstanding forwards and its weighted average rate are as follows:

2019 2018
Notional Weighted Notional Weighted
Amount Average Rate Amount Average Rate
US Dollar
Buy $548,790 P51.52 $515,771 P53.52
Sell $297,009 P51.10 $313,379 P51.41
Euro
Buy €29,000 P56.56 €127,100 P59.95
Sell €17,709 P55.88 – –
Japanese Yen
Buy ¥2,189,180 P0.46 – –
Singapore Dollar
Sell SGD541 P37.66 – –

The aggregate notional amounts of the outstanding buy US Dollar NDF as of December 31, 2019 and 2018 amounted to nil and
US$40.00 million, respectively. The weighted average buy NDF rate as of December 31, 2018 is 52.93.

The aggregate notional amounts of the outstanding Futures as of December 31, 2019 and December 31, 2018 amounted to US$40 million
and US$5 million, respectively.

The aggregate notional amounts of the outstanding IRS as of December 31, 2019 and 2018 amounted to P26.524 billion and
P11.366 billion, respectively.

As of December 31, 2019 and 2018, the fair values of derivatives follow:

2019 2018
Derivative Derivative Derivative Derivative
Asset Liability Asset Liability
Currency forwards P113,384 P425,976 P339,190 P362,689
IRS 528,238 610,077 58,390 90,530
Futures 16,439 – – 1,931
Warrants 9,889 – 10,268 –
P667,950 P1,036,053 P407,848 P455,150

103
 Fair Value Changes of Derivatives
The net movements in fair value changes of derivative instruments are as follows:

2019 2018
Balance at beginning of year (P47,303) P66,053
Fair value changes during the year 326,366 (288,211)
Settled transactions (647,167) 174,855
Balance at end of year (P368,104) (P47,303)

The net movements in the value of the derivatives are presented in the statements of income under the following accounts:

2019 2018 2017

Foreign exchange gain (loss) (P289,093) (P82,585) P96,401
Trading and securities gain (loss)* (Note 21) (31,708) (30,771) (3,437)
(P320,801) (P113,356) P92,964
*Net movements in the value related to embedded credit derivatives and IRS.

In 2019, the Parent Company established a monitoring process to properly account for the net movements in the value of foreign exchange
contracts which pertain to funding and trading activities.

Funding activities pertain to activities undertaken by the Parent Company to obtain funds in one currency in exchange of another
currency through the use of foreign exchange derivatives. For the year ended December 31, 2019, the account “Foreign exchange
gains (losses)” in the statement of income consisted of the net movements in the value of foreign exchange contracts amounting to
P402.93 million loss and P646.69 million gain for funding and trading activities, respectively.

Derivative contracts designated as hedges

In 2019, the Parent Company designated an interest rate swap contract (IRS) to hedge the cash flow variability of its floating rate bonds
payable As of December 31, 2019, the fair value of the IRS designated as a hedging instrument amounted to P51.95 million with a notional
amount of US$150.00 million.

The IRS designated as cash flow hedges has the same principal terms as the hedged bonds payable (Note 18). Accordingly, as of December
31, 2019, the Parent Company assessed that the hedging relationship is expected to be highly effective and no ineffective portion was
recognized in profit or loss.

Net interest income on the derivative liabilities designated as hedges amounted to P14.27 million in 2019. Also, in 2019, the amount of gain
or loss reclassified from the cash flow hedge reserve to profit or loss under net interest income amounted to P0.50 million.

27. LEASE CONTRACTS

The lease contracts are for periods ranging from one to 25 years from the dates of contracts and are renewable under certain terms and
conditions. Various lease contracts include escalation clauses, most of which bear an annual rent increase of 5.00% to 10.00%.

Annual rentals on these lease contracts included in ‘Occupancy cost’ in the statements of income in 2018 and 2017 amounted to
P844.24 million and P782.30 million, respectively, for the Group, and P541.24 million and P518.47 million, respectively, for the Parent
Company.

As of December 31, 2018, future minimum rentals payable of the Group and the Parent Company under non−cancelable operating leases
follow:

Consolidated Parent Company

Within one year P578,761 P564,852
After one year but not more than five years 2,402,298 1,951,017
After five years 1,743,518 1,338,024
P4,724,577 P3,853,894

104 CHINA BANKING CO RPORATI ON

 The Group and the Parent Company have also entered into commercial property leases on its investment properties (Note 13).

Future minimum rentals receivable under noncancellable operating leases follow:

Consolidated Parent Company

2019 2018 2019 2018
Within one year 6,146 10,906 6,146 9,068
After one year but not more than five years 12,705 19,688 8,162 13,202
After more than five years 13,518 15,466 − −
32,369 46,060 14,308 22,270

28. INCOME AND OTHER TAXES

Income taxes include corporate income tax and FCDU final taxes, as discussed below, and final tax paid at the rate of 20.00% on gross
interest income from government securities and other deposit substitutes. These income taxes, as well as the deferred tax benefits and
provisions, are presented as ‘Provision for income tax’ in the statements of income.

Republic Act (RA) No. 9337, An Act Amending National Internal Revenue Code, provides that RCIT rate shall be 30.00% while interest
expense allowed as a deductible expense is reduced to 33.00% of interest income subject to final tax.

An MCIT of 2.00% on modified gross income is computed and compared with the RCIT. Any excess MCIT over RCIT is deferred and can
be used as a tax credit against future income tax liability for the next three years. In addition, the NOLCO is allowed as a deduction from
taxable income in the next three years from the year of inception.

Effective in May 2004, RA No. 9294 restored the tax exemption of FCDUs and offshore banking units (OBUs). Under such law, the income
derived by the FCDU from foreign currency transactions with nonresidents, OBUs, local commercial banks including branches of foreign
banks is tax−exempt while interest income on foreign currency loans from residents other than OBUs or other depository banks under the
expanded system is subject to 10.00% gross income tax.

Interest income on deposit placements with other FCDUs and OBUs is taxed at 7.50% (now 15% effective January 1, 2018), while all other
income of the FCDU is subject to the 30.00% corporate tax.

Relevant Tax Updates

Republic Act 10963, The Tax Reform for Acceleration and Inclusion (TRAIN), is first package of the comprehensive tax reform program of
the government. The bill was signed into law on December 19, 2018 and took effect on January 1, 2018, amending some provisions of the
old Philippine tax system.

Except for resident foreign corporations, which is still subject to the existing rate of 7.5%, tax on interest income of foreign currency deposit
was increased to 15% under TRAIN. Documentary stamp tax on bank checks, drafts, certificate of deposit not bearing interest, all debt
instruments, bills of exchange, letters of credit, mortgages, deeds and others are now subjected to a higher rate.

RR 4-2011
On March 15, 2011, the Bureau of Internal Revenue (BIR) issued Revenue Regulations (RR) No. 4−2011 which prescribed the attribution and
allocation of expenses between FCDUs/EFCDUs or OBU and RBU and within RBU.

On April 6, 2015, the Bank and other member banks of the Bankers Association of the Philippines (BAP), filed a Petition for Declaratory
Relief with Application for Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction with the Regional Trial Court of Makati
(Makati Trial Court). Further, in Civil Case No. 15-287, the Bank and other BAP member banks assailed the validity of RR 4-2011 on the
ground, among others, that (a) the RR violates the petitioner-banks substantive due process rights; (b) it is not only illegal but also unfair;
(c) that it serves as a deterrent to banks to invest in capital market transactions to the prejudice of the economy; (d) it sets a dangerous
precedent for the disallowance of full deductions due to the prescribes method of allocation; and (e) it violates the equal protection clause
of the Constitution.

On April 8, 2015, the Makati Trial Court issued a TRO enjoining the BIR from enforcing RR 4-2011. Also, on April 25, 2015, Makati Trial
Court issued a Writ of Preliminary Injunction enjoining the BIR from enforcing, carrying out, or implementing in any way or manner RR 4-2011
against the Bank and other BAP member banks, including issuing Preliminary Assessment Notice or Final Assessment Notice against them
during the pendency of the litigation, unless sooner dissolved.

105
 On June 10, 2015, the Makati Trial Court issued a Confirmatory Order stating that the TRO and Writ of Preliminary Injunction also prohibits
the BIR from ruling or deciding on any administrative matter pending before it in relation to the subject revenue regulations and insofar as the
Bank and other BAP member banks are concerned.

On May 25, 2019, the Makati Trial Court issued a decision annulling RR 4-2011 and making the Writ of Preliminary Injunction permanent.

Current tax regulations also provide for the ceiling on the amount of entertainment, amusement and recreation (EAR) expense that can be
claimed as a deduction against taxable income. Under the regulations, EAR expense allowed as a deductible expense is limited to the actual
EAR paid or incurred but not to exceed 1.00% of the Parent Company’s net revenue.

The provision for income tax consists of:

Consolidated Parent Company

2019 2018 2017 2019 2018 2017
Current
Final tax P1,420,644 P908,756 P677,450 P1,402,657 P836,560 P607,136
RCIT 962,712 1,070,191 977,9 68 680,187 926,792 829,109
MCIT − 46,051 − − − −
2,383,356 2,024,998 2,082,844 1,763,352
1,655,418 1,436,245

Deferred (870,707) 246,424 (166,241) (405,124) 495,882 206,239

P1,512,649 P2,271,422 P1,489,177 P1,677,720 P2,259,234 P1,642,484

The details of net deferred tax assets (liabilities) follow:

Consolidated Parent Company

2019 2018 2019 2018
Net deferred tax assets on:
Allowance for impairment and credit losses P3,670,628 P2,806,637 P2,845,003 P2,340,436
Revaluation Increment on land (Notes 11 and 22) (547,405) (547,405) (547,405) (547,405)
Fair value adjustments on asset foreclosure and
dacion transactions - net of depreciated portion 271,947 346,238 23,376 25,437
Net defined benefit asset (166,955) (243,812) (151,420) (228,277)
Others 142,734 151,231 118,402 149,029
P3,370,949 P2,514,889 P2,287,956 P1,739,220

Deferred tax liabilities of the Group arose mainly from fair value adjustments related to the acquisition of PDB and Unity Bank.

The Group did not set up deferred tax assets on the following temporary differences as it believes that it is highly probable that these
temporary differences will not be realized in the near foreseeable future:

Consolidated Parent Company

2019 2018 2019 2018

Allowance for impairment and credit losses P1,684,183 P2,809,469 P− P163,062

Accrued compensated absences 57,182 − − −
NOLCO − 329,959 − −
Excess of MCIT over RCIT 83,204 46,122 − −
Others 34,065 34,572 − −
P1,858,634 P3,220,122 P− P163,062

106 CHINA BANKING CO RPORATI ON

 As of December 31, 2019, details of the Subsidiary’s NOLCO are as follows:

Original Used Expiry

Inception Year Amount Amount Expired Amount Remaining Balance Year
2016 P− P− P− P− 2016
2017 − − − − 2017
2018 288,559 288,559 − − 2018
2019 − − − − 2019
P288,559 P288,559 P− P−

As of December 31, 2019, details of the excess of MCIT over RCIT of the Subsidiary follow:

Inception Year Original Used Expired Amount Remaining Balance Expiry

Amount Amount Year
2016 P35,414 P35,313 P101 P− 2016
2017 − − − − 2017
2018 46,643 − − 46,643 2018
2019 36,560 − − 36,560 2019
P118,618 P35,313 P101 P83,203

The reconciliation of the statutory income tax to the provision for income tax follows:

Consolidated Parent Company

2019 2018 2017 2019 2018 2017
Statutory income tax P3,476,286 P3,116,258 P2,703,632 P3,524,004 P3,110,883 P2,746,937
Tax effects of
FCDU income (730,776) (250,305) (498,029) (714,703) (252,809) (496,062)
Non−taxable income (690,059) (984,372) (939,179) (1,458,268) (895,392) (837,850)
Interest income
(1,609,292) (318,857) (279,914) (622,878) (276,675) (266,103)
subjected to final tax
Nondeductible expenses 1,439,020 827,904 771,915 1,244,697 676,253 612,065
Others (372,530) (119,204) (269,248) (295,132) (103,027) (116,503)
Provision for income tax P1,512,649 P2,271,424 P1,489,177 P1,677,720 P2,259,233 P1,642,484

29. TRUST OPERATIONS

Securities and other properties (other than deposits) held by the Parent Company in fiduciary or agency capacities for clients and
beneficiaries are not included in the accompanying balance sheets since these are not assets of the Parent Company (Note 31).

In compliance with the requirements of current banking regulations relative to the Parent Company’s trust functions : (a) government
bonds included under HFT financial assets and financial assets at FVOCI with total face value of P1.87 billion and P1.78 billion as of
December 31, 2019 and 2018, respectively, are deposited with the BSP as security for the Parent Company’s faithful compliance with
its fiduciary obligations (Note 9); and (b) a certain percentage of the Parent Company’s trust fee income is transferred to surplus reserve.
This yearly transfer is required until the surplus reserve for trust function equals 20.00% of the Parent Company’s authorized capital stock.

107
30. RELATED PARTY TRANSACTIONS

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence
over the other party in making financial and operating decisions. The Group’s related parties include:

• key management personnel, close family members of key management personnel and entities which are controlled, significantly
influenced by or for which significant voting power is held by key management personnel or their close family members,
• significant investors
• subsidiaries, joint ventures and associates and their respective subsidiaries, and
• post−employment benefit plans for the benefit of the Group’s employees.

The Group has several business relationships with related parties. Transactions with such parties are normally made in the ordinary course
of business and based on the terms and conditions discussed below.

Transactions with Retirement Plans

Under PFRS, certain post−employment benefit plans are considered as related parties. The Group has business relationships with a number
of its retirement plans pursuant to which it provides trust and management services to these plans. Income earned by the Group and
Parent Company from such services amounted to P50.78 million and P44.70 million, respectively, in 2019, P47.60 million and P44.38 million,
respectively, in 2018, and P42.89 million and P41.69 million, respectively, in 2017.

The Group’s retirement funds may hold or trade the Parent Company’s shares or securities. Significant transactions of the retirement fund,
particularly with related parties, are approved by the Trust Investment Committee (TIC) of the Parent Company. The members of the TIC are
directors and key management personnel of the Parent Company.

A summary of transactions with related party retirement plans follows:

Consolidated Parent Company

2019 2018 2019 2018
Deposits in banks P52,757 P560,672 P39,407 P399,395
Financial assets at FVOCI 1,367,210 1,479,097 1,367,210 1,479,097
Dividend income 48,126 45,301 48,126 45,301
Interest income 21,484 16,882 18,975 13,311
Total market value of shares 1,367,210 1,479,097 1,367,210 1,479,097
Number of shares held P54,688 P54,579 P54,688 P54,579

In 2017, dividend income and interest income of the retirement plan from investments and placements in the Parent Company amounted
to P45.75 million and P2.07 million, respectively, for the Group, and P47.75 million and P1.52 million, respectively, for the Parent Company.

Financial assets at FVOCI represent shares of stock of the Parent Company. Voting rights over the Parent Company’s shares are exercised
by an authorized trust officer.

Remunerations of Directors and other Key Management Personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities
of the Group, directly or indirectly. The Group considers the members of the ManCom to constitute key management personnel for
purposes of PAS 24.

Total remunerations of key management personnel are as follows:

Consolidated Parent Company

2019 2018 2017 2019 2018 2017
Short−term employee benefits P550,767 P533,995 P482,345 P468,271 P441,361 P408,311
Post−employment benefits 5,395 5,064 2,501 4,718 4,418 2,501
P556,162 P539,059 P484,846 P472,989 P445,779 P410,812

108 CHINA BANKING CO RPORATI ON

Members of the BOD are entitled to a per diem of P500.00 for attendance at each meeting of the Board or of any committees and to
four percent (4.00%) of the Parent Company’s net earnings, with certain deductions in accordance with BSP regulation. Non−executive
directors do not receive any performance−related compensation. Directors’ remuneration covers all Parent Company’s Board activities and
membership of committees and subsidiary companies.

The Group also provides banking services to directors and other key management personnel and persons connected to them. These
transactions are presented in the tables below.

Other Related Party Transactions

Transactions between the Parent Company and its subsidiaries meet the definition of related party transactions. Transactions between the Group
and its associated companies also qualify as related party transactions. Details of the Parent Company’s subsidiaries and associate are disclosed in
Notes 1 and 10.

Group
Related party transactions of the Group by category of related party are presented below.

December 31, 2019

Category Amount / Volume Outstanding Terms and Conditions
Balance
Significant Investor
Loans and receivables P– P2,345,300 Partially secured Loans with interest rate of
Issuances – – 2 − 5.12% and maturity of two to seven
years.
Repayments (4,421,200) –
Deposit liabilities – 1,496 These are checking accounts with annual
Deposits 1,123 – average rate of 0.13%.
Withdrawals – –
Associate
Deposit liabilities – 300,620 These are savings accounts with annual
Deposits 666,996 – average interest rates ranging from 0.25%
to 1.00%.
Withdrawals (532,748) –
Key Management Personnel
Loans and receivables – 427 Unsecured Officer’s accounts from Credit
Issuances – – card with interest of 3% and currently
maturing and Fully secured OEL
Repayments (61) –
accounts with interest of 6%;Secured; no
impairment; with annual fixed interest rates
ranging from 0% to 5.50%
Deposit liabilities – 78,763 These are checking, savings and time
Deposits 255,582 – deposits with annual average interest rates
ranging from 0.25% to 1.00%.
Withdrawals (257,836) –
Other Related Parties
Deposit liabilities – 389,714 These are checking and savings accounts
Deposits 22,632,109 – with annual average interest rates ranging
from 0.13% to 1.00%.
Withdrawals (22,523,755) –

109
 December 31, 2018
Outstanding
Category Amount / Volume Balance Terms and Conditions
Significant Investor
Loans and receivables P6,766,500 Partially secured Loans with interest rate of
Issuances P86,125,000 2 − 5.12% and maturity of two to seven
years.
Repayments (2,350,000)
Deposit liabilities 374 These are checking accounts with annual
Deposits 2,532,609 average rate of 0.13%.
Withdrawals (2,532,493)
Associate
Deposit liabilities 166,372 These are savings accounts with annual
Deposits 487,691 average interest rates ranging from 0.25%
to 1.00%.
Withdrawals (399,123)
Key Management Personnel
Loans and receivables 488 Unsecured Officer’s accounts from Credit
Issuances 388 card with interest of 3% and currently
maturing and Fully secured OEL
Repayments (39,213)
accounts with interest of 6%;Secured; no
impairment; with annual fixed interest rates
ranging from 0% to 5.50%
Deposit liabilities 79,241 These are checking, savings and time
Deposits 406,225 deposits with annual average interest rates
ranging from 0.25% to 1.00%.
Withdrawals (350,120)
Other Related Parties
Deposit liabilities 238,933 These are checking and savings accounts
Deposits 35,337,503 with annual average interest rates ranging
from 0.13% to 1.00%.
Withdrawals (35,165,054)

Interest income earned and interest expense incurred from the above loans and deposit liabilities in 2019, 2018, and 2017 follow:

Significant Investor Associate

2019 2018 2017 2019 2018 2017
Interest income P46,906 P42,601 P169,706 P– P– P–
Interest expense 2 3 61 655 168 1,849

Key Management Personnel Other Related Parties

2019 2018 2017 2019 2018 2017
Interest income 26 P7,921 P17,102 P– P– P–
Interest expense 1,952 2,121 47 2,376 2,129 69

Related party transactions of the Group with significant investor, associate and other related parties pertain to transactions of the Parent
Company with these related parties.

110 CHINA BANKING CO RPORATI ON

Parent Company
Related party transactions of the Parent Company by category of related party, except those already presented in the Group disclosures,
are presented below.

December 31, 2019

Category Amount / Volume Outstanding Balance Nature, Terms and Conditions
Significant Investor
Loans and receivables P2,345,300.00 Partially secured Loans with interest rate of 2 -
Issuances 5.25% and maturity of two to seven years.
Repayments (4,421,200.00)
Deposit liabilities 1.496 These are checking accounts with annual
Deposits 1,123 average rate of 0.13%.
Withdrawals
Subsidiaries
Deposit liabilities 481,247 These are checking and savings accounts
Deposits 3,673,806 with annual average interest rates ranging
from 0.13% to 1.00%.
Withdrawals (3,306,898)
Associate
Deposit liabilities 300,538 These are savings accounts with annual
Deposits 666,995 average interest rates ranging from0.25% to
1.00%.
Withdrawals (532,748)
Key Management Personnel
Loans and receivables 426.50 Unsecured Officer’s accounts from Credit card
Issuances with interest of 3% and currently maturing
and Fully secured OEL accounts with
Repayments (61.14)
interest of 6%
Deposit liabilities 27,009 These are savings account with annual
Deposits 229,243 average interest rates ranging from 0.25%
to 1.00%.
Withdrawals (216,803)
Other Related Parties
Deposit liabilities 168,085 These are checking and savings accounts with
Deposits 22,528,359 annual average interest rates ranging from
0.13% to 1.00%.
Withdrawals (22,474,211)

December 31, 2018

Category Amount / Volume Outstanding Balance Nature, Terms and Conditions
Significant Investor
Loans and receivables P6,766,500 These are secured loans with interest rate
Issuances 86,125,000 of 5.13% and maturity of four years;
collateral includes shares of stocks with fair
Repayments (2,350,000)
value of P28.44 billion
Deposit liabilities 374 These are checking accounts with annual
Deposits 2,532,609 average rate of 0.13%.
Withdrawals (2,532,493)
(Forward)

111
 December 31, 2018
Category Amount / Volume Outstanding Balance Nature, Terms and Conditions
Subsidiaries
Deposit liabilities P114,339 These are checking and savings accounts
Deposits 3,668,567 with annual average interest rates ranging
from 0.13% to 1.00%.
Withdrawals (3,587,029)
Associate
Deposit liabilities 166,291 These are savings accounts with annual
Deposits 487,691 average interest rates ranging from0.25% to
1.00%.
Withdrawals (399,123)
Key Management Personnel
Loans and receivables 488 Unsecured Officer’s accounts from Credit card
Issuances 388 with interest of 3% and currently maturing
and Fully secured OEL accounts with
Repayments (39,213)
interest of 6%
Deposit liabilities 14,569 These are savings account with annual
Deposits 365,236 average interest rates ranging from 0.25%
to 1.00%.
Withdrawals (369,439)
Other Related Parties
Deposit liabilities These are checking and savings accounts with
Deposits 35,229,849 113,937 annual average interest rates ranging from
0.13% to 1.00%.
Withdrawals (35,167,475)

In 2019 and 2017, the Parent Company sold its investment property to a related party for a total cash selling price of P382.33 million and
P161.58 million, respectively, and recognized gain of P377.18 million and P142.61 million, respectively.

The related party transactions shall be settled in cash. There are no provisions for credit losses in 2019, 2018 and 2017 in relation to amounts
due from related parties.

Interest income earned and interest expense incurred from the above loans and deposit liabilities in 2019, 2018 and 2017 follow:

Subsidiaries Associate
2019 2018 2017 2019 2018 2017
Interest expense P743 P375 P46 P654 P168 P1,849

Key Management Personnel Other Related Parties

2019 2018 2017 2019 2018 2017
Interest income P26 P11,277 P46 P– P– P–
Interest expense 36 19 47 210 131 69

Significant Investor
2019 2018 2017
Interest income P46,906 42,601 P169,706
Interest expense 2 3 61

112 CHINA BANKING CO RPORATI ON

 Outright purchases and outright sale of debt securities of the Parent Company with its subsidiaries in 2019 and 2018 follow:

Subsidiaries
2019 2018
Peso−denominated
Outright purchase P3,390,547 P817,030
Outright sale 854,135 4,246,628
Dollar – denominated (equity)
Outright purchase 6,550 5,117
Outright sale 450 41,400

The following table shows the amount and outstanding balance of other related party transactions included in the financial statements:

Subsidiaries
2019 2018 Nature, Terms and Conditions
Balance Sheet
Accounts receivable P1,144 P1,242 This pertains to various expenses advanced by CBC in behalf of CBSI
Security deposits 2,270 2,270 This pertains to the rental deposits with CBSI for office space leased out
to the Parent Company
Accounts payable 12,941 4,858 This pertains to various unpaid rental to CBSI

Subsidiaries
2019 2018 2017 Nature, Terms and Conditions
Income Statement
Miscellaneous income 1,800 1,800 1,800 Human resources functions provided by the Parent
Company to its subsidiaries (except CBC Forex and
Unity Bank) such as recruitment and placement, training
and development, salary and benefits development,
systems and research, and employee benefits. Under
the agreementbetween the Parent Company and
its subsidiaries, the subsidiaries shall pay the Parent
Company an annual fee
Occupancy cost 20,067 19,937 24,532 Certain units of the condominium owned by CBSI are being
leased to the Parent Company for a term of five years,
with no escalation clause
Miscellaneous expense 222,414 204,749 193,651 This pertains to the computer and general banking services
provided by CBC−PCCI to the Parent Company to
support its reporting requirements

31. COMMITMENTS AND CONTINGENT ASSETS AND LIABILITIES

In the normal course of the Group’s operations, there are various outstanding commitments and contingent liabilities which are not reflected
in the accompanying financial statements. Management does not anticipate any material losses as a result of these transactions.

There are several suits, assessments or notices and claims that remain contested. Management believes, based on the opinion of its legal
counsels, that the ultimate outcome of such suits, assessments and claims will not have a material effect on the Group’s and the Parent
Bank’s financial position and results of operations.

113
32. SEGMENT INFORMATION

The Group’s operating businesses are recognized and managed separately according to the nature of services provided and the markets
served, with each segment representing a strategic business unit.

The Group’s business segments are as follows:

a. Lending Business – principally handles all the lending, trade finance and corollary banking products and services offered to corporate
and institutional customers as well as selected middle market clients. It also handles home loans, contract−to−sell receivables, auto
loans and credit cards for individual and/or corporate customers. Aside from the lending business, it also provides cash management
services and remittance transactions;
b. Retail Banking Business – principally handles retail and commercial loans, individual and corporate deposits, overdrafts and funds
transfer facilities, trade facilities and all other services for retail customers;

c. Financial Markets – principally provides money market, trading and treasury services, manages the Group’s funding operations by the
use of government securities, placements and acceptances with other banks as well as offers advisory and capital−raising services to
corporate clients and wealth management services to high−net−worth customers; and

d. Others – handles other services including but not limited to trust and investment management services, asset management, insurance
brokerage, credit management, thrift banking business, operations and financial control, and other support services.

The Group’s businesses are organized to cater to the banking needs of market segments, facilitate customer engagement, ensure timely
delivery of products and services as well as achieve cost efficiency and economies of scale. Accordingly, the corresponding segment
information for all periods presented herein are restated to reflect such change.

The Group reports its primary segment information to the Chief Operating Decision Maker (CODM) on the basis of the above−mentioned
segments. The CODM of the Group is the President.

Segment assets are those operating assets that are employed by a segment in its operating activities that are either directly attributable to
the segment or can be allocated to the segment on a reasonable basis.

Segment liabilities are those operating liabilities that result from the operating activities of a segment and that either are directly attributable
to the segment or can be allocated to the segment on a reasonable basis.

Interest income is reported net as management primarily relies on the net interest income as performance measure, not the gross income
and expense.

The segment results include internal transfer pricing adjustments across business units as deemed appropriate by management. Transactions
between segments are conducted at estimated market rates on an arm’s length basis. Interest is charged/credited to the business units
based on its assets’ and liabilities’ repricing or maturity date using market-based yield curve approved by the Asset Liability Committee
(ALCO).

Other operating income mainly consists of trading and securities gain (loss) − net, service charges, fees and commissions, trust fee income
and foreign exchange gain − net. Other operating expense mainly consists of compensation and fringe benefits, provision for impairment
and credit losses, taxes and licenses, occupancy, depreciation and amortization, stationery, supplies and postage and insurance. Other
operating income and expense are allocated between segments based on equitable sharing arrangements.

The Group has no significant customers which contributes 10.00% or more of the consolidated revenues.

The Group’s asset producing revenues are located in the Philippines (i.e., one geographical location); therefore, geographical segment
information is no longer presented.

114 CHINA BANKING CO RPORATI ON

The following tables present relevant financial information regarding business segments measured in accordance with PFRS as of and for
the years ended December 31, 2019, 2018 and 2017:

Lending Business Retail Banking Business

2019 2018 2017 2019 2018 2017
Results of Operations
Net interest income
Third party P24,613,498 P19,034,015 P13,876,995 (P5,338,849) (P871,505) P855,933
Intersegment (18,388,536) (12,956,205) (8,438,704) 18,020,023 11,763,393 7,915,744
6,224,962 6,077,810 5,438,291 12,681,174 10,891,888 8,771,677
Other operating income 2,281,689 1,794,959 1,317,298 2,209,567 1,619,591 1,465,962
Total revenue 8,506,651 7,872,769 6,755,589 14,890,741 12,511,479 10,237,639
Other operating expense (5,608,740) (1,559,750) (2,294,490) (10,229,225) (7,138,661) (6,536,859)
Income before income tax 2,897,911 6,313,019 4,461,099 4,661,516 5,372,818 3,700,780
Provision for income tax (45,149) 210,176 236,856 (419,750) − −
Net income P2,852,762 P6,523,195 P4,697,955 P4,241,766 P5,372,818 P3,700,780
Total assets P438,731,372 P376,187,705 299,052,197 P516,900,229 P471,540,704 P431,622,883
Total liabilities 5,042,977 4,819,787 1,171,742 569,897,912 499,955,967 444,030,414
Depreciation and amortization 54,477 73,475 61,988 1,185,539 437,201 378,597
Provision for impairment and
credit losses P1,836,780 (P328,404) P668,360 P443,621 P103,780 P238,645
Capital expenditures P29,405 P66,105 P63,136 P177,348 P148,179 P118,378

Financial Markets Other Business and Support Units

2019 2018 2017 2019 2018 2017
Results of Operations
Net interest income
Third party P3,462,384 P4,028,486 P1,661,494 3,314,262 P735,190 P3,231,981
Intersegment 1,041,115 (434,176) 1,124,033 (672,602) 1,626,988 (601,073)
4,503,499 3,594,310 2,785,527 2,641,660 2,362,178 2,630,908
Other operating income 1,994,224 522,523 879,737 1,945,309 1,721,223 2,438,697
Total revenue 6,497,723 4,116,833 3,665,264 4,586,969 4,083,401 5,069,605
Other operating expense (1,853,424) (916,021) (1,264,773) (5,203,073) (8,582,524) (6,619,867)
Income before income tax 4,644,299 3,200,812 2,400,491 (616,104) (4,499,123) (1,550,262)
Provision for income tax (1,240,335) (730,643) (547,624) 192,584 (1,750,955) (1,178,409)
Net income P3,403,964 P2,470,169 P1,852,867 (P423,520) (P6,250,078) (P2,728,671)
Total assets P230,368,926 P170,463,397 P168,052,729 (P223,774,548) (P152,120,166) (P147,280,299)
Total liabilities P118,786,174 P88,040,610 P140,321,883 P172,323,323 185,398,689 82,267,974
Depreciation and amortization P52,328 P49,433 P41,852 P650,316 P737,576 P735,052
Provision for impairment and
credit losses P92,689 P51,689 P– P197,078 P314,011 (P152,834)
Capital expenditures P8,542 P60,838 P63,795 P209,829 P299,388 P389,402

115
 Total
2019 2018 2017
Results of Operations
Net interest income
Third party P26,051,295 P22,926,186 P19,626,403
Intersegment − − −
26,051,295 22,926,186 19,626,403
Other operating income 8,430,789 5,658,296 6,101,694
Total revenue 34,482,084 28,584,482 25,728,097
Other operating expense (22,894,462) (18,196,956) (16,715,989)
Income before income tax 11,587,622 10,387,526 9,012,108
Provision for income tax (1,512,650) (2,271,422) (1,489,177)
Net income P10,074,972 P8,116,104 P7,522,931
Total assets P962,225,979 P866,071,640 P751,447,510
Total liabilities P866,050,386 P778,215,053 P667,792,013
Depreciation and amortization P1,942,660 P1,297,685 P1,217,489
Provision for impairment and credit losses P2,570,168 P141,076 P754,171
Capital expenditures P425,124 P574,510 P634,711

The Group’s share in net income of an associate included in other operating income amounting to P184.66 million, P101.01 million and
P73.13 million in 2019, 2018 and 2017, respectively are reported under ‘Other Business and Support Units’.

33. EARNINGS PER SHARE

Basic EPS amounts are calculated by dividing the net income for the year by the weighted average number of common shares outstanding
during the year (adjusted for stock dividends).

The following reflects the income and share data used in the basic earnings per share computations:

2019 2018 2017

a. Net income attributable to equity holders of the parent P10,068,960 P8,110,379 P7,513,972
b. Weighted average number of common shares
outstanding (Note 23) 2,685,900 2,685,826 2,581,182
c. EPS (a/b) P3.75 P3.02 P2.91

As of December 31, 2019, 2018 and 2017, there were no outstanding dilutive potential common shares.

34. SUPPLEMENTARY INFORMATION FOR CASH FLOW ANALYSIS

The following is a summary of certain non−cash investing activities that relate to the analysis of the statements of cash flows:

Consolidated
2019 2018 2017
Addition to investment properties from settlement of loans P832,290 P523,343 P579,089
Fair value gain in AFS financial assets 892,644 (451,786) 158,946
Cumulative translation adjustment 98,830 (52,900) (15,970)
Addition to chattel mortgage from settlement of loans 618,298 626,182 559,283

116 CHINA BANKING CO RPORATI ON

 Parent Company
2019 2018 2017
Addition to investment properties from settlement of loans P471,020 P240,680 P126,652
Fair value gain in AFS financial assets 670,487 (381,791) 113,020
Cumulative translation adjustment 81,518 (58,792) (16,197)
Addition to chattel mortgage from settlement of loans 10,332 20,135 10,824

The following table shows the reconciliation analysis of liabilities arising from financing activities for the period ended December 31, 2019:

2019 2018
Balance at beginning of year P39,826,532 P20,118,031
Cash flows during the year
Proceeds 180,468,980 184,568,424
Settlement (147,998,921) (171,215,735)
Non−cash changes
Foreign exchange movement (1,319,934) 4,132,800
Amortization of transaction cost (200,852) 2,223,012
Balance at end of year P70,775,804 P39,826,532

35. OFFSETTING OF FINANCIAL ASSETS AND LIABILITIES

The amendments to PFRS 7 require the Group to disclose information about rights of offset and related arrangements (such as collateral
posting requirements) for financial instruments under an enforceable master netting agreements or similar arrangements. The effects of these
arrangements are disclosed in the succeeding table.

December 31, 2019

Effects of remaining rights of
set−off (including rights to set
Net amount off financial collateral) that
Gross amounts presented in do not meet PAS 32 offsetting
Financial instruments offset in statements of criteria
recognized at Gross carrying accordance with financial Fair value of
end of reporting amounts (before the offsetting position Financial financial Net exposure
period by type offsetting) criteria [a−b] instruments collateral [c−d]
[a] [b] [c] [d] [e]
Financial assets
SPURA P5,447,293 P− P5,447,293 P5,447,293 P5,447,293 P−
Currency forwards 101,067 − 101,067 10,786 − 90,281
IRS 2,082 − 2,082 15 − 2,067
P5,550,442 P− P5,550,442 P5,458,094 5,447,293 P92,348
Financial liabilities
Bills payable P21,867,053 P− P21,867,053 P19,385,705 P19,706,128 P2,160,925
Currency forwards 278,942 − 278,942 37,058 241,883
IRS 44,355 − 44,355 10,786 − 33,569
P22,190,350 P− P22,190,350 P19,433,549 19,706,128 P2,436,378

117
 December 31, 2018
Effects of remaining rights of
set−off (including rights to set
Net amount off financial collateral) that
Gross amounts presented in do not meet PAS 32 offsetting
Financial instruments offset in statements of criteria
recognized at Gross carrying accordance with financial Fair value of
end of reporting amounts (before the offsetting position Financial financial Net exposure
period by type offsetting) criteria [a−b] instruments collateral [c−d]
[a] [b] [c] [d] [e]
Financial assets
SPURA P7,000,000 P− P7,000,000 P7,000,000 P7,000,000 P−
Currency forwards 129,322 − 129,322 33,933 95,389
IRS 28,198 − 28,198 3,481 24,717
P7,157,525 P− P7,157,525 P7,037,414 P7,000,000 P120,106
Financial liabilities
Bills payable P27,372,201 P− P27,372,201 P34,689,129 P32,547,479 P−
Currency forwards 52,249 − 52,249 33,933 18,316
IRS 20,963 − 20,963 4,481 16,482
P27,445,413 P− P27,445,413 P34,727,543 P32,547,479 P35,798

The amounts disclosed in column (d) include those rights to set−off amounts that are only enforceable and exercisable in the event of default,
insolvency or bankruptcy. These include amounts related to financial collateral both received and pledged, whether cash or non−cash
collateral, excluding the extent of over−collateralization.

36. APPROVAL OF THE FINANCIAL STATEMENTS

The accompanying consolidated and parent company financial statements were authorized for issue by the Parent Company’s BOD on
February 26, 2020.

37. SUPPLEMENTARY INFORMATION REQUIRED UNDER BSP CIRCULAR 1074

Presented below is the supplementary information required by BSP under Appendix 55 of BSP Circular 1074 to be disclosed as part of the
notes to financial statements. This supplementary information is not a required disclosure under PFRS.

Basic quantitative indicators of financial performance

The following basic ratios measure the financial performance of the Group and the Parent Company:

Consolidated Parent Company

2019 2018 2017 2019 2018 2017
Return on average equity 11.04% 9.54% 10.01% 11.04% 9.54% 10.01%
Return on average assets 1.10% 1.04% 1.12% 1.22% 1.17% 1.27%
Net interest margin 3.39% 3.56% 3.60% 3.26% 3.42% 3.41%

Description of capital instruments issued

None to report.

118 CHINA BANKING CO RPORATI ON

Significant credit exposures

The BSP considers that loan concentration exists when the total loan exposure to a particular industry or economic sector exceeds 30.00%
of total loan portfolio. As of December 31, 2019 and 2018, the Parent Company does not have credit concentration in any particular industry.

Status of loans

Information on the amounts of performing and non-performing loans and receivables (gross of allowance for impairment and credit losses)
of the Group and Parent Company are as follows:

Consolidated
2019 2018
Performing Non-Performing Total Performing Non-Performing Total
Loans and discounts
Corporate and commercial lending P454,852,808 P4,690,104 P459,542,912 P408,396,312 P3,259,100 P411,655,412
Consumer lending:
Housing 69,504,381 2,427,211 71,931,592 57,632,786 1,650,827 59,283,613
Auto 22,155,296 702,476 22,857,772 21,339,654 593,380 21,933,034
Credit Card 1,209,616 304,222 1,513,838 1,178,929 269,362 1,448,291
Others 10,061,522 327,756 10,389,278 4,299,580 139,926 4,439,506
Trade-related lending 10,954,527 242,392 11,196,919 13,794,546 23,319 13,817,865
Others* 42,358 4,471 46,829 51,815 4,701 56,516
P568,780,508 P8,698,632 P577,479,140 P506,693,622 P5,940,615 P512,634,237

Parent Company
2019 2018
Performing Non-Performing Total Performing Non-Performing Total
Loans and discounts
Corporate and commercial lending P432,104,596 P2,229,449 P434,334,045 P380,318,161 P1,086,188 P381,404,349
Consumer lending:
Housing 53,033,152 1,908,416 54,941,568 41,893,098 1,147,000 43,040,098
Auto 7,956,005 185,153 8,141,158 8,086,688 107,934 8,194,622
Credit Card 1,209,616 304,222 1,513,838 1,178,928 269,361 1,448,289
Others 1,463 _ 1,463 1,521 1,521
Trade-related lending 10,666,662 235,906 10,902,568 12,914,287 23,319 12,937,606
Others* 34,340 1 34,341 39,489 271 39,760
P505,005,834 P4,863,147 P509,868,981 P444,432,172 P2,634,073 P447,066,245

Loans per security

As of December 31, 2019 and 2018, secured and unsecured non−performing loans (NPLs) of the Group and the Parent Company follow:

Consolidated Parent Company

2019 2018 2019 2018
Secured P 3,177,507 P 2,771,745 P 935,742 P 493,929
Unsecured 5,521,125 3,173,971 3,927,405 2,140,143
P 8,698,632 P 5,945,716 P 4,863,147 P 2,634,072

119
 According to BSP Circular 941, Amendments to the Regulations on Past Due and Non−Performing Loans effective January 1, 2018,
loans shall be considered non−performing, even without any missed contractual payments, when it is considered impaired under existing
accounting standards, classified as doubtful or loss, in litigation, and/or there is evidence that full repayment of principal and interest is unlikely
without foreclosure of collateral, if any. All other loans, even if not considered impaired, shall be considered non−performing if any principal
and/or interest are unpaid for more than ninety (90) days from contractual due date, or accrued interests for more than ninety (90) days have
been capitalized, refinanced, or delayed by agreement.

Secured liability and assets pledged as security

As of December 31, 2019, the carrying amount of foreign currency−denominated investment securities at amortized cost pledged by the
Parent Company as collateral for its interbank borrowings amounted to P9.00 billion. The carrying amount of peso−denominated investment
securities at amortized cost pledged by the Parent Company as collateral for its interbank borrowings amounted to P10.39 billion. The fair
value of investment securities at amortized cost pledged as collateral amounted to P19.71 billion as of December 31, 2019.

As of December 31, 2018, the carrying amount of foreign currency−denominated investment securities at amortized cost and FVOCI
pledged by the Parent Company as collateral for its interbank borrowings amounted to P13.32 billion and P0.73 billion, respectively.
The carrying amount of peso−denominated investment securities at amortized cost pledged by the Parent Company as collateral for its
interbank borrowings amounted to P20.69 billion. The fair value of investment securities at amortized cost pledged as collateral amounted
to P31.86 billion as of December 31, 2019.

Related party loans

As required by the BSP, the Group discloses loan transactions with its and affiliates and investees and with certain directors, officers,
stockholders and related interests (DOSRI). Under existing banking regulations, the limit on the amount of individual loans to DOSRI, of which
70.00% must be secured, should not exceed the regulatory capital or 15.00% of the total loan portfolio, whichever is lower. These limits do
not apply to loans secured by assets considered as non−risk as defined in the regulations.

BSP Circular No. 423, dated March 15, 2004, amended the definition of DOSRI accounts. The following table shows information relating to
the loans, other credit accommodations and guarantees classified as DOSRI accounts under regulations existing prior to said Circular, and
new DOSRI loans, other credit accommodations granted under said Circular:

Consolidated
2019 2018
Related Party Related Party
Loans (inclusive Loans (inclusive of
DOSRI Loans of DOSRI Loans) DOSRI Loans DOSRI Loans)
Total outstanding DOSRI loans P3,782,090 P53,032,123 P10,273,436 P39,862,519
Percent of DOSRI/Related Party loans to total loan
portfolio 0.65% 9.18% 2.00% 7.77%
Percent of unsecured DOSRI/Related Party loans to
total loan portfolio 5.16% 75.00% 1.78% 68.57%
Percent past due DOSRI/Related Party loans to total
loan portfolio − − − −
Percent of non−performing DOSRI/Related Party loans
to total loan portfolio − − − −

120 CHINA BANKING CO RPORATI ON

 Parent
2019 2018
Related Party Related Party
Loans (inclusive Loans (inclusive of
DOSRI Loans of DOSRI Loans) DOSRI Loans DOSRI Loans)
Outstanding DOSRI loans P3,775,723 P52,200,773 P10,268,296 P39,535,110
Percent of DOSRI/Related Party loans to total loan
portfolio 0.74% 10.23% 2.30% 8.84%
Percent of unsecured DOSRI/Related Party loans to
total loan portfolio 5.16% 76.16% 1.77% 69.12%
Percent past due DOSRI/Related Party loans to total
loan portfolio − − − −
Percent of non−performing DOSRI/Related Party loans
to total loan portfolio − − − −

The amounts of loans disclosed for related parties above differ with the amounts disclosed for key management personnel since the
composition of DOSRI is more expansive than that of key management personnel.

BSP Circular No. 560 provides that the total outstanding loans, other credit accommodation and guarantees to each of the bank’s/quasi−
bank’s subsidiaries and affiliates shall not exceed 10.00% of the net worth of the lending bank/quasi−bank, provided that the unsecured
portion of which shall not exceed 5.00% of such net worth. Further, the total outstanding loans, credit accommodations and guarantees to
all subsidiaries and affiliates shall not exceed 20.00% of the net worth of the lending bank/quasi−bank; and the subsidiaries and affiliates of
the lending bank/quasi−bank are not related interest of any director, officer and/or stockholder of the lending institution, except where such
director, officer or stockholder sits in the BOD or is appointed officer of such corporation as representative of the bank/quasi−bank.

On May 12, 2009, BSP issued Circular No. 654 allowing a separate individual limit of twenty−five (25.00%) of the net worth of the lending
bank/quasi−bank to loans of banks/quasi−banks to their subsidiaries and affiliates engaged in energy and power generation.

Commitments and contingencies

The following is a summary of contingencies and commitments of the Group and the Parent Company with the equivalent peso contractual
amounts:

Consolidated Parent Company

2019 2018 2019 2018
Trust department accounts (Note 28) P169,339,175 P133,806,226 P169,339,175 P133,806,226
Committed credit lines 46,506,112 122,804,833 46,506,112 122,280,671
Unused commercial letters of credit (Note 29) 18,227,610 20,978,009 18,110,275 20,829,020
Foreign exchange bought 30,941,342 37,359,690 30,941,342 37,359,690
Foreign exchange sold 18,229,910 24,678,551 18,229,910 24,678,551
Credit card lines 11,048,767 12,568,703 11,048,767 12,568,703
IRS receivable 26,523,850 11,366,980 26,523,850 11,366,980
Outstanding guarantees issued 1,022,261 944,262 688,045 420,100
Inward bills for collection 4,423,799 2,563,604 4,423,799 2,563,604
Standby credit commitment 2,200,316 3,149,787 2,200,316 3,149,787
Spot exchange sold 11,965,938 3,624,709 11,965,938 3,624,709
Spot exchange bought 10,896,547 3,247,995 10,896,547 3,247,995
Deficiency claims receivable 285,745 287,647 285,745 287,647
Late deposits/payments received 525,953 495,347 492,597 458,675
Outward bills for collection 88,197 55,135 86,344 53,211
Others 37,114 1,846 36,951 1,694

121
38. SUPPLEMENTARY INFORMATION REQUIRED UNDER RR NO. 15−2010

In compliance with the requirements set forth by RR No. 15−2010, hereunder are the details of percentage and other taxes paid or accrued
by the Parent Company in 2019.

Gross receipts tax P1,722,992

Documentary stamps tax 1,322,819
Local taxes 76,196
Fringe benefit tax 13,669
Others 20,173
Balance at end of year P3,155,849

Withholding Taxes
Details of total remittances of withholding taxes in 2019 and amounts outstanding as of December 31, 2019 are as follows:

Total Amounts
remittances outstanding
Final withholding taxes P3,362,053 P261,612
Withholding taxes on compensation and benefits 555,303 31,699
Expanded withholding taxes 149,719 10,235
P4,067,075 P303,546

122 CHINA BANKING CO RPORATI ON

 China Bank Branches
102-4, 102-6

MAKATI MAIN BRANCH (HO) AURORA BLVD.-NEW MANILA BETTER LIVING SUBD. CAINTA-POBLACION
CBC Bldg., 8745 Paseo de Roxas Aurora Blvd., Brgy. Valencia, 128 Doña Soledad Ave., Parañaque City A. Bonifacio Ave., Poblacion,
cor. Villar Sts., Makati City Quezon City Tel. Nos.: 8556-3467; 8556-3468 Cainta, Rizal
Trunkline: 8885-5555 Tel. Nos.: 8727-4192; 8727-4171 8556-3470 Tel. No.: 8637-1935
(Private Exchange Connecting All Fax No.: 8727-4171 Fax No.: 8556-3470 Fax No.: 8637-6634
Departments)
Fax Nos.: 8892-0220; 8817-1325 ASUNCION BF HOMES CAPITOL HILLS
Units G6 & G7 Chinatown Steel Towers, Aguirre cor. El Grande Aves., G/F 88 Design Pro Building
BINONDO BUSINESS CENTER Asuncion St., San Nicolas, Manila United BF Homes, Parañaque City Capitol Hills, Old Balara, Quezon City
CBC Bldg., Dasmariñas Tel. Nos.: 8241-2311; 8241-2352 Tel. Nos.: 8825-6138; 8825-6891 Tel. Nos.: 8952-7776; 8952-7805
cor. Juan Luna Sts., Binondo, Manila 8241-2359; 8241-2361 8825-6828 8952-7804
Trunklines: 8247-5388; 8885-5222 Fax No.: 8241-2352 Fax No.: 8825-5979 Fax No.: 8952-7806
(Private Exchange Connecting All
Departments) AYALA-ALABANG BF HOMES-AGUIRRE CIRCUIT MAKATI
Fax Nos.: 8241-7058; 8242-7225 G/F, CBC Bldg., Acacia Ave., Margarita Centre, Aguirre Ave. Level 3, Ayala Mall, Circuit Makati,
Madrigal Business Park, corner Elsie Gaches Street, Hippodromo St., Brgy. Carmona,
METRO MANILA Ayala Alabang, Muntinlupa City BF Homes, Parañaque City Makati City
Tel. Nos.: 8807-0673; 8807-0674 Tel. Nos.: 7799-4707; 7799-4942 Tel. Nos.: 8403-8301; 8403-8302
A. BONIFACIO-MAUBAN 8850-3785; 8850-9640 8659-3359; 8659-3360 Fax No.: 8403-8302
G/F Urban Oasis Residences, 8850-8888 Fax No.: 8659-3359
423-431., A. Bonifacio Ave., Fax No.: 8850-8670 CENTURY CITY-KNIGHTSBRIDGE
Brgy. San Jose, Quezon City BF RESORT VILLAGE Unit 17 & 18, Knightsbridge Residences
Tel. Nos.: 8282-1991; 8282-1994 AYALA AVE.-AMORSOLO BF Resort Drive cor. Gloria Diaz St., Century City, Kalayaan Ave., Makati City
Fax Nos.: 8282-1994 G/F Teleperformance Bldg. BF Resort Village, Talon Dos, Tel. Nos.: 8866-3937; 8866-3803
Ayala Ave., Makati City Las Piñas City Fax No.: 8866-3937
ALABANG HILLS Tel. Nos.: 8541-7348; 8541-5958 Tel. Nos.: 8873-4542; 8873-4541
G/F RBC-MDC, Corporate Center, Fax No.: 8541-5958 8873-4540 COMMONWEALTH AVENUE
Don Jesus Blvd., Alabang Hills Village, Fax No.: 8873-4543 LGF, Ever Gotesco Mall,
Muntinlupa City AYALA-COLUMNS Commonwealth Center
Tel. Nos.: 8877-8567; 8877-8604 G/F The Columns Tower 3, BGC-ICON PLAZA Commonwealth Avenue corner
Fax No.: 8877-8604 Ayala Avenue, Makati City G/F Icon Plaza Bldg., Don Antonio Road, Quezon City
Tel. Nos.: 7915-3672; 7915-3673 25th cor 5th Sts. Bonifacio South, Tel. Nos.: 8932-0818; 8932-0820
ALVARADO 7915-3674; 7915-3675 Fort Bonifacio Global City, Taguig City 3431-5000; 3431-5001
Alvarado St., Binondo, Manila Fax No.: 7915-3672 Tel. Nos.: 8777-1943; 8800-1474 Fax No.: 8932-0822
Tel. Nos.: 8562-3863; 8562-3866 Fax No.: 8777-1943
Fax No.: 8562-3866 AYALA MALLS-MANILA BAY COMMONWEALTH AVE. EXT.-
Level 2 Ayala Malls Manila Bay, BGC-ONE WORLD PLACE CASA MILAN
ANONAS D. Macapagal Ave., Parañaque City G/F One World Place, 32nd Avenue, ALX Center Building, Commonwealth
Anonas corner Marang Streets, Tel. Nos.: 8352-7758; 8292-4576 Fort Bonifacio Global City, Taguig City Ave. Ext., North Fairview, Quezon City
Brgy. Quirino, Project 2, Quezon City Fax No.: 8352-7758 Tel. Nos.: 8869-6309; 8843-2448 Tel. No.: 8463-5714
Tel. No.: 8277-9397 Fax No.: 8843-2448 Fax No.: 8463-5714
Fax No.: 8277-9378 BACLARAN-F.B. HARRISON
BAGPI Main Bldg., 2935 F.B. Harrison BGC- W TOWER CONGRESSIONAL AVENUE
ANTIPOLO CITY cor. Ortigas St., Pasay City G/F W Tower 39th St., North Bonifacio G/F, Unit C The Arete Square,
G/F Budget Lane Arcade, Tel. No.: 8838-5038 Triangle BGC, Taguig City,1634 Congressional Ave., Project 8,
No. 6, Provincial Road Fax No.: 8838-5038 Tel. Nos.: 8552-3311; 8551-9072 Quezon City
Brgy. San Jose, Antipolo City, Rizal Fax No.: 8551-9072 Tel. Nos.: 8351-8648; 8351-8645
Tel. Nos.: 8650-3277; 8650-2087 BALINTAWAK-BONIFACIO 8351-8646
8695-1509 657 A. Bonifacio Avenue BGC- WORLD PLAZA Fax No.: 8454-7383
Fax No.: 8650-2640 Balintawak, Quezon City G/F (Unit 5) World Plaza, L4B5 E-Square
Tel. Nos.: 8361-3449; 8361-7825 Information Technology Park, CONGRESSIONAL AVE. EXTENSION-
ANTIPOLO CITY-TAKTAK 8362-3660; 8361-0450 Crescent Park West, 5th Avenue, MIRA NILA
Sumulong Highway corner Taktak Road, Fax No.: 8361-0199 Bonifacio Global City, Taguig City CBC Bldg., Congressional Ave. Ext.,
Brgy. Dela Paz, Antipolo City, Rizal Tel. Nos.: 8541-3447; 8541-4220 Quezon City
Tel. Nos.: 8721-6320; 8721-6087 BALUT Fax No.: 8541-4220 Tel. Nos.: 8932-2372; 8932-2370
Fax No.: 8721-6316 North Bay Shopping Center Honorio Fax No.: 8932-2370
Lopez Boulevard, Balut, Tondo, Manila BINANGONAN
ANTIPOLO-SUMULONG HIGHWAY Tel. Nos.: 8253-9921; 8253-9929 National Highway, Bo. Tagpos, CONGRESSION AVE.-PROJECT 8
No. 219 Sumulong Highway, 8253-9620; 8251-1182 Binangonan, Rizal 159 Congressional Ave.,
Brgy. Mambugan, Antipolo City, Rizal 8251-1186 Tel. Nos.: 8669-1530; 8669-1659 Brgy. Bahay Toro, Project 8, Quezon City
Tel. Nos.: 8632-7573; 8655-8087 Fax No.: 8253-9917 Fax No.: 8669-1530 Tel. Nos.: 8365-1737; 8365-1748
Fax No.: 8632-7309 Fax No.: 8365-1737
BANAWE BRANCH BLUMENTRITT
ARANETA AVE. CBC Bldg., 680 Banawe Avenue, 1777-1781 Cavite corner Leonor CORINTHIAN HILLS
Philippine Whithasco Bldg. Sta. Mesa Hts. District I, Quezon City Rivera St., Blumentritt, Sta. Cruz, Manila G/F The Clubhouse, Corinthian Hills,
420 Araneta Avenue cor. Bayani St., Tel. Nos.: 8743-7486; 8743-7488 Tel. Nos.: 8742-0254; 8711-8589 Temple Drive, Brgy. Ugong Norte,
Quezon City 8711-8694; 3416-7028 Fax No.: 8711-8541 Quezon City
Tel. Nos.: 8731-2252; 8731-2261 3416-7030 Tel. Nos.: 8637-3170; 8637-3180
8732-4153; 8731-2243 Fax No.: 8743-7487 BO. KAPITOLYO 8637-1915
8410-6753 G/F P&E Building, 12 United corner Fax No.: 8637-1905
Fax No.: 8410-3026 BANAWE-CALAMBA First Sts. Bo. Kapitolyo, Pasig City
119 Banawe St. corner Calamba St. Tel. Nos.: 8634-8370; 8634-8915 CUBAO-ARANETA
ARNAIZ AVE. Quezon City 8634-3697 Level 2, Ali Mall, Araneta City,
United Life Assurance Building, Tel. Nos.: 8732-1060; 8740-4864 Fax No.: 8634-7504 Cubao, Quezon City
A. Arnaiz Ave. (Pasay Road), Makati City Fax No.: 8740-4864 Tel. Nos.: 8911-2369; 8911-2370
Tel. Nos.: 8541-1506; 8541-1552 BONNY SERRANO 8438-3830; 8438-3832
Fax No.: 8541-1506 BEL-AIR G/F Greenhills Garden Square, 8911-2397
2/F Saville Bldg., Gil Puyat Ave. 297 Col. Bonny Serrano Ave., Fax No.: 8911-8416
ARRANQUE cor. Paseo de Roxas St., Makati City Quezon City
Don Felipe Building Tel. Nos.: 8897-2212; 8899-4186 Tel. Nos.: 3410-0677; 8997-8043 CUBAO-AURORA
675 Tomas Mapua St., Sta. Cruz, Manila 8899-0685 8997-8031 911 Aurora Boulevard Extension corner
Tel. Nos.: 8733-3477; 8734-4777 Fax No.: 8890-4062 Fax No.: 3410-0677 Miami Street, Cubao, Quezon City
8733-7704; 8733-8335 Tel. Nos.: 8912-5164; 8912-5157
8733-8336; 8733-8337 BEL-AIR-JUPITER CAINTA 8913-4675; 8913-4676
8733-8338; 8733-8339 Buendia Car Exchange, Jupiter Street, CBC Bldg., (Beside Sta. Lucia East Mall) 8911-3524
8733-8340; 8734-4497 Makati City Felix Ave. (Imelda Ave.), Cainta, Rizal Fax No.: 8912-5167
8734-4501; 8734-4506 Tel. Nos.: 8403-5970; 8403-6062 Tel. Nos.: 8646-0691; 8646-0693
Fax No.: 8733-3481 Fax No.: 8403-6062 8645-9974; 8682-1795
Fax No.: 8646-0050

108 C H I N A B A N K I N G C O R P O R AT I O N
CUBAO-P. TUAZON E. RODRIGUEZ SR. BLVD. FAIRVIEW TERRACES GREENHILLS-CONNECTICUT
No. 287 P. Tuazon Ave. near corner CBC Bldg., #286 E. Rodriguez Sr. Blvd., LGF Fairview Terraces, Quirino Highway G/F Missouri Square Bldg., Missouri cor.
18th Avenue, Brgy. San Roque, Brgy. Damayang Lagi, Quezon City corner Maligaya Drive, Brgy. Pasong Connecticut St., Northeast Greenhills,
Cubao, Quezon City Tel. Nos.: 3416-3166; 8722-5860 Putik, Novaliches, Quezon City San Juan, Metro Manila
Tel. Nos.: 8911-5896; 8911-8416 8722-5893 Tel. Nos.: 8285-5956; 8285-6058 Tel. Nos.: 8997-3452; 8997-3455
Fax No.: 8911-8416 Fax No.: 8726-2865 Fax No.: 8285-5956 Fax No.: 8997-3452

CULIAT- TANDANG SORA EASTWOOD CITY FILINVEST CORPORATE CITY GREENHILLS-ORTIGAS

G/F Royal Midway Plaza, Unit D, Techno Plaza One, G/F Wilcon Depot, Alabang-Zapote road CBC Bldg., 14 Ortigas Avenue
No. 419, Tandang Sora Ave. Eastwood City Cyberpark, E. Rodriguez cor. Bridgeway Ave., Filinvest Corporate Greenhills, San Juan, Metro Manila
Brgy. Culiat, 1128 Quezon City Jr. Ave., (C-5) Bagumbayan, Quezon City City, Alabang, Muntinlupa Tel. Nos.: 8723-0530; 8723-0501
Tel. Nos.: 8288-2575; 8288-5114 Tel. Nos.: 8706-3491; 8706-3493 Tel. Nos.: 8775-0097; 8775-0126 8723-0502; 8723-0504
Fax No.: 8288-2575 8706-1979; 8706-3320 8842-1993; 8775-2198 8726-1492
8706-3448 Fax No.: 8775-0322 Fax No.: 8723-0556
D. TUAZON Fax No.: 8706-1979
148 D. Tuazon St., Brgy. Lourdes, FILINVEST CORP. CITY- HEROES HILLS
Sta. Mesa Heights, Quezon City EASTWOOD CITY FELINA COMMERCENTER Quezon Ave. corner J. Abad Santos
Tel. Nos.: 8731-2516; 8731-2508 CORPORATE PLAZA G/F Commercenter Alabang, Street, Heroes Hills, Quezon City
Fax No.: 8731-0592 G/F Felina Corporate Plaza, Commerce Ave. cor. Filinvest Ave., Tel. Nos.: 8351-4359; 8351-5121
#5 Eastwood Ave., Eastwood City, Filinvest Corporate City, Alabang, 3411-3375; 3412-5697
DAMAR VILLAGE Quezon City Muntinlupa City Fax No.: 8351-5121
Clubhouse, Damar Village, Quezon City Tel. Nos.: 8275-5541; 8275-5434 Tel. Nos.: 8805-0824; 8805-0827
Tel. Nos.: 8442-3581; 8367-5517 Fax No.: 8275-5541 Fax No.: 8805-0146 HOLY SPIRIT DRIVE
Fax No.: 8367-5517 CBC Bldg., Lot 18 Block 6 Holy Spirit
EDSA-KALOOKAN FILINVEST CORP. CITY-NORTHGATE Drive, Don Antonio Heights,
DASMARIÑAS VILLAGE No. 531 (Lot 5 Block 30) EDSA G/F Aeon Centre Building, Northgate Brgy. Holy Spirit, Quezon City
2283 Pasong Tamo Ext. corner near corner Biglang Awa Street, Cyberzone, Filinvest Corporate City, Tel. Nos.: 8355-8665; 8277-7257
Lumbang Street, Makati City Kalookan City Alabang, Muntinlupa City Fax No.: 8355-8665
Tel. Nos.: 8894-2392; 8894-2393 Tel. Nos.: 8442-4338; 8442-4339 Tel. Nos.: 8776-1985; 8551-5569
8813-2958 8442-4340 Fax No.: 8776-1985 ILAYA
Fax No.: 8894-2355 Fax No.: 8442-4339 #947 APL-YSL Bldg., Ilaya, Tondo, Manila
FIVE E-COM CENTER Tel. Nos.: 8245-2416; 8245-2548
DILIMAN-MATALINO EDSA-TIMOG AVE. G/F Five E-com Center, Harbor Drive, 8245-2557
J&L Building, #23 Matalino Street, G/F Richwell Corporate Center, MOA Complex, Pasay City Fax No.: 8245-2545
Diliman, Quezon City 102 Timog Ave., Brgy. Sacred Heart, Tel. Nos.: 8815-1883; 8815-1884
Tel. Nos.: 8936-8729; 8937-5004 Quezon City 8815-1887 INTRAMUROS
Fax No.: 8937-5004 Tel. Nos.: 8441-5225, 8441-5226, Fax No.: 8815-1883 No. 409 A. Soriano Avenue,
8441-5227, 3412-9878 Intramuros, Manila
DIVISORIA-STA. ELENA Fax No.: 8441-5228 FORT BONIFACIO GLOBAL CITY Tel. Nos.: 8528-4241; 8536-1044
New Divisoria Condominium Center G/F Marajo Tower, 26th Street 8536-5971
632 Sta. Elena St., Binondo, Manila ELCANO cor. 4th Avenue, Fort Bonifacio Fax No.: 8536-1044
Tel. Nos.: 8247-1435; 8247-1436 G/F Elcano Tower, Elcano Street, Global City, Taguig City
8247-1437 San Nicolas, Manila Tel. Nos.: 7799-9072; 7799-9074 J. ABAD SANTOS AVENUE
Fax No.: 8247-1436 Tel. Nos.: 8244-6760; 8244-6765 8856-4416; 8856-4891 2159 J. Abad Santos Ave.,
8244-6779 8856-5196 cor. Batangas St., Tondo, Manila
DON ANTONIO Fax No.: 8244-6760 Fax No.: 8856-4416 Tel. Nos.: 8255-1201; 8255-1202
G/F Royale Place, Don Antonio Ave., 8255-1204
Brgy. Old Balara, Quezon City ERMITA GEN. LUIS-KATIPUNAN Fax No.: 8255-1203
Tel. Nos.: 8932-9477; 8952-9678 Ground Floor A, Ma. Natividad Bldg., CBC Bldg., Gen. Luis St. corner
8952-9354 #470 T. M. Kalaw cor. Cortada Sts., Katipunan SB Road, Brgy. Nagkaisang J. ABAD SANTOS AVE.-QUIRICADA
Fax No.: 8952-9344 Ermita, Manila Nayon, Novaliches, Quezon City J. Abad Santos Ave. near corner
Tel. Nos.: 8525-6477; 8536-7794 Tel. Nos.: 8285-5664; 8285-5665 Quiricada Street, Manila
DEL MONTE AVENUE 8525-6544; 8523-0074 Fax No.: 8285-5665 Tel. Nos.: 8253-6803; 8253-6804
No. 497 Del Monte Ave. 8523-9862 Fax No.: 8253-6803
Bgry. Manresa, Quezon City Fax No.: 8525-8137 GIL PUYAT AVENUE
Tel. Nos.: 3413-2826; 3413-2825 Mitsu Bldg., No. 65 Sen. Gil Puyat Ave., JUAN LUNA
8961-8828 ESCOLTA Brgy. Palanan, Makati City G/F Aclem Building, 501 Juan Luna St.
Fax No.: 8361-1101 Burke Building, Escolta corner Burke Tel. Nos.: 8844-0492; 8844-0494 Binondo, Manila
Streets, Binondo, Manila 8844-0688; 8844-0690 Tel. Nos.: 8247-3570; 8247-3795
DEL MONTE-MATUTUM Tel. Nos.: 8363-1734; 8365-5408 Fax No.: 8844-0497 8247-3786; 8480-0211
No. 202 Del Monte Avenue near corner Fax No.: 8363-1734 Fax No.: 8247-3795
Matutum St., Brgy St. Peter, GIL PUYAT-ELIZABETH PLACE
Quezon City ESPAÑA G/F Elizabeth Place, KANLAON
Tel. Nos.: 8731-2535; 8731-2571 España cor. Valencia Sts., Gil Puyat Ave., Makati City Kanlaon near corner N. Roxas Streets,
8413-2118; 8416-7791 Sampaloc, Manila Tel. Nos.: 8776-0502; 8776-3234 Quezon City
Fax No.: 8416-7791 Tel. Nos.: 8741-9572; 8741-6209 Fax No.: 8766-0502 Tel. Nos.: 8367-0093; 8367-0095
8741-6208; 8741-9565 Fax No.: 8367-0093
E. RODRIGUEZ-ACROPOLIS Fax No.: 8741-6207 GIL PUYAT AVE.-REPOSO
G/F Suncrest Building, No. 331 Gil Puyat Ave., Makati City KALAYAAN AVE.
E. Rodriguez Jr. Ave., Quezon City EXAMINER Tel. Nos.: 8541-3739; 8541-3735 G/F PPS Building, Kalayaan Avenue,
Tel. Nos.: 8654-3607; 8654-3586 No. 1525 Quezon Ave. Fax No.: 8541-3735 Quezon City
Fax No.: 8654-3586 cor. Examiner St., West Triangle, Tel. Nos.: 9332-3858; 8332-3859
Quezon City GREENBELT 1 8332-3860
E. RODRIGUEZ-CORDILLERA Tel. Nos.: 8376-3313; 8376-3314 G/F Greenbelt 1, Legaspi Street near Fax No.: 8332-3859
No. 291 (G/F Units 285 & 287) 8376-3317; 8376-3318 corner Paseo de Roxas, Makati City
E. Rodriguez Sr. Blvd., Fax No.: 8376-3314 Tel. Nos.: 8836-1387; 8836-1405 KALOOKAN
Brgy. Doña Josefa, Quezon City 8836-1406 CBC Bldg., 167 Rizal Avenue Extension
Tel. Nos.: 8257-1512; 8256-5292 EVANGELISTA Fax No.: 8836-1406 Grace Park, Kalookan City
Fax No.: 8257-1512 Evangelista corner Gen. Estrella Sts., Tel. Nos.: 8364-0515; 8364-0535
Bangkal, Makati City GREENHILLS 8364-0717; 8364-0731
E. RODRIGUEZ-HILLCREST Tel. Nos.: 7759-5095; 7759-5096 G/F Gift Gate Bldg., Greenhills Shopping 8364-0494; 8364-9948
No. 402 E. Rodriguez Sr. Blvd. 8856-0434; 8856-0433 Center, San Juan, Metro Manila 8366-9457
Cubao, Quezon City Fax No.: 7759-5096 Tel. Nos.: 8727-2798; 8724-5078 Fax No.: 8364-9864
Tel. Nos.: 8571-8927; 8571-8928 Fax No.: 8727-9520
8571-8929 FAIRVIEW
Fax No.: 8571-8927 G/F Angelenix House, Fairview Ave. GREENHILLS-ANNAPOLIS
corner Camaro St., Quezon City Mercedes 1 Condominium, Annapolis
Tel. Nos.: 8937-5597; 8938-9636 St., Greenhills, San Juan, Metro Manila
8937-8086; 8461-3004 Tel. Nos.: 8470-3385; 8470-3380
Fax No.: 8937-8086 Fax No.: 8470-3380

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 109
 China Bank Branches
KALOOKAN-8th AVE. LAS PIÑAS-NAGA ROAD MAKATI AVENUE MANILA-MACEDA
No. 279 Rizal Avenue corner 8th Ave., Lot 3, Naga Road, Pulanglupa 2, G/F CBC Bldg., Makati Ave. Daguman Bldg., Maceda St.,
Grace Park, Kalookan City Las Piñas City cor. Hercules St., Makati City Sampaloc, Manila
Tel. Nos.: 8287-0001; 8287-0262 Tel. No.: 8541-1671 Tel. Nos.: 8890-6971; 8890-6972 Tel. Nos.: 8521-6644; 8521-6643
Fax No.: 8287-0262 Fax No.: 8541-1674 8890-6973; 8890-6974 Fax No.: 8521-6644
Fax No.: 8890-6975
KALOOKAN-10th AVE. LAVEZARES MARIKINA-STA. ELENA
No. 275 10th Ave. corner 3rd Street, No. 412 Lavezares Street, MAKATI-COMEMBO 250 J.P. Rizal Street, Sta. Elena,
Grace Park, Kalookan City San Nicolas, Manila No. 46 JP Rizal Ext., Brgy. Comembo, Marikina City
Tel. Nos.: 8287-5484; 8287-5489 Tel. Nos.: 8521-6978; 521-7132 Makati City Tel. Nos.: 8646-4281; 8646-4277
Fax No.: 8287-5489 521-7128 Tel. Nos.: 8802-2616; 8802-2614 8646-4279
Fax No.: 8521-7128 8802-2613 Fax No.: 8646-1807
KALOOKAN-CAMARIN Fax No.: 8802-2613
L8B4 La Forteza Subd., Brgy. 175 LEGASPI VILLAGE-AMORSOLO MARIKINA-FAIRLANE
Camarin, Kalookan City G/F CAP Bldg., Herrera cor. Amorsolo MAKATI-JP RIZAL G/F E & L Patricio Building,
Tel. Nos.: 8442-6830; 8442-7541 Sts. Legaspi Village, Makati City JP Rizal corner Honradez Streets, No. 809 J.P. Rizal Ave.,
8442-6825 Tel. Nos.: 8832-6871; 8833-5668 Makati City Concepcion Uno, Marikina City
Fax No.: 8442-6825 Fax No.: 8833-5668 Tel. Nos.: 8815-6036; 8815-6037 Tel. Nos.: 8997-0684; 8997-0897
8815-6038 8998-1817; 7239-2143
KALOOKAN-MONUMENTO LEGASPI VILLAGE-AIM Fax No.: 8815-6038 Fax No.: 7239-2143
779 Mc Arthur Highway, Kalookan City G/F Cacho-Gonzales Building,
Tel. Nos.: 8364-2571; 8361-3270 101 Aguirre cor. Trasierra Streets, MAKATI-KALAYAAN AVE. MARIKINA-GIL FERNANDO
8921-3043 Legaspi Village, Makati City Kalayaan Avenue, Makati City Block 9, Lot 14 Gil Fernando Ave.,
Fax No.: 8361-3270 Tel. Nos.: 8818-8156; 8818-0734 Tel. Nos.: 8838-7253; 8838-7252 Marikina City
8818-9649; 8894-5882 Fax No.: 8838-7253 Tel. Nos.: 8646-0780; 7358-2138
KAMIAS 8894-5883; 8894-5884 Fax No.: 8646-8032
G/F CRM Building II, 116 Kamias Road 8894-5885 MAKATI-YAKAL
corner Kasing-Kasing Street, Fax No.: 8818-0240 173 Yakal St. near corner Ayala Ave. Ext., MARIKINA-SSS VILLAGE
Quezon City Makati City Lilac St., Rancho Estate IV,
Tel. Nos.: 8433-6007; 8920-7367 LEGASPI VILLAGE-C. PALANCA Tel. Nos.: 8373-6355; 8367-0086 Concepcion Dos, Marikina City
8920-8770 Suite A, Basic Petroleum Building Fax No.: 8373-6355 Tel. Nos.: 8948-5135; 8941-7709
Fax No.: 8920-5723 104 C. Palanca Jr. Street 8997-3343
Legaspi Village, Makati City MALABON-CONCEPCION Fax No.: 8942-0048
KAMUNING Tel. Nos.: 8894-5915/18; 8810-1464 Gen. Luna corner Paez Streets,
#47 SKY47 Bldg., Kamuning Road, Fax No.: 8894-5868 Concepcion, Malabon MASANGKAY
Quezon City Tel. Nos.: 8281-0102; 8281-0103 959-961 G. Masangkay Street,
Tel. Nos.: 8287-3369; 8287-3368 LEGASPI VILLAGE-ESTEBAN 8281-0104; 8281-0105 Binondo, Manila
Fax No.: 8287-3369 G/F PPI Bldg., No. 109 Esteban St., Fax No.: 8281-0106 Tel. Nos.: 8244-1828; 8244-1835
Legaspi Village, Makati City 8244-1848; 8244-1856
KARUHATAN Tel. Nos.: 8800-6147; 8805-4820 MALABON-GOV. PASCUAL 8244-1859
No. 253-B McArthur Highway Fax No.: 8805-4820 CBC Bldg., Gov. Pascual Avenue, Fax No.: 8244-1833
cor. Bizotte Street, Karuhatan, Malabon City
Valenzuela City LEGASPI VILLAGE-PEREA Tel. Nos.: 8352-1816; 8352-1817 MASANGKAY-MAYHALIGUE
Tel. Nos.: 8291-0431; 8291-0175 G/F Greenbelt Mansion, 106 Perea St., 8961-2147 No. 1417-1419 G. Masangkay St.,
3440-0033 Legaspi Village, Makati City Fax No.: 8352-1822 Sta. Cruz, Manila
Fax No.: 8291-0175 Tel. Nos.: 8893-2273/2272/2827 Tel. Nos.: 8255-0739; 8254-9974
Fax No.: 8893-2272 MALABON-POTRERO 8254-9335
KATIPUNAN AVE.-ST. IGNATIUS CBC Bldg., McArthur Highway, Fax No.: 8254-9974
CBC Bldg., No. 121 Katipunan Ave., LEGASPI VILLAGE-SALCEDO Potrero, Malabon
Brgy. St. Ignatius, Quezon City G/F Fedman Suites, 199 Salcedo Street Tel. Nos.: 3448-0524; 3448-0525 MAYON
Tel. Nos.: 8913-5532; 8912-5003 Legaspi Village, Makati City 8361-8671; 8361-7056 480 Mayon St., Maharlika
8913-3226 Tel. Nos.: 8893-7680; 8893-2618 Fax No.: 3448-0525 Sta. Mesa Heights, Quezon City
Fax No.: 8913-5532 7759-2462; 8893-1503 Tel. Nos.: 8731-9054; 8731-2766
8816-0905 MALANDAY 8741-2409
KATIPUNAN AVE.-LOYOLA HEIGHTS Fax No.: 8893-3746 CBC Bldg., McArthur Highway, Fax No.: 8731-2766
Elizabeth Hall, Katipunan Ave., Malanday, Valenzuela City
Loyola Heights, Quezon City M. DELA FUENTE-TRABAJO MARKET Tel. Nos.: 3432-9787; 3445-3201 MAYON-ROTONDA
Tel. Nos.: 8287-9218; 8287-9221 #771 M. dela Fuente St. (Trabajo Market 3432-9785; 8292-6956 G/F One Mayon Place, #68 Mayon
Fax No.: 8851-6143; 8851-6144 area), Sampaloc, Manila 8292-6957; Street, Brgy. Sta. Teresita, Quezon City
Tel. Nos.: 8522-2083; 8522-2028 Fax No.: 8851-6143; 8292-6956 Tel. Nos.: 8373-5534; 8281-8603
LAGRO Fax No.: 8522-2083 Fax No.: 8373-5534
CBC Bldg., Lot 32 Blk 125, Quirino MANDALUYONG-BONI AVE.
Highway, Greater Lagro, Quezon City MACAPAGAL AVE.-ASEANA SQUARE G/F VOS Bldg., Boni Avenue corner MINDANAO AVE.
Tel. Nos.: 8372-8226; 8372-8223 Aseana Square (Caltex Area), San Rafael Street, Mandaluyong City 30 Mindanao Avenue,
Fax No.: 8372-8226 D. Macapagal Ave., Aseana City, Tel. Nos.: 7746-6283; 7746-6285 Brgy. Tandang Sora, Quezon City
Parañaque City 8534-2289 Tel. Nos.: 8277-4768; 8277-4782
LAS PIÑAS Tel. Nos.: 8296-7246; 8296-7235 Fax No.: 8534-1968 Fax No.: 8277-4768
CBC Bldg., Alabang-Zapote Road Fax No.: 8296-7235
cor. Aries St., Pamplona Park Subd., MANDALUYONG-BONI SAN ROQUE MUNTINLUPA-PUTATAN
Las Piñas City MACAPAGAL AVE.-BIOPOLIS #768 Bonifacio Ave. cor. San Roque St. G/F Teknikos Bldg., National Highway,
Tel. Nos.: 8874-6204; 8874-6210 G/F The Biopolis, Central Business Park Brgy. Barangka Ilaya, Mandaluyong City Brgy. Putatan, Muntinlupa City
Fax No.: 8874-6414 1-A 076/01, Diosdado Macapagal Avenue, Tel. Nos.: 8581-3861; 8581-3867 Tel. Nos.: 8511-0980; 8808-1817
Pasay City Fax No.: 8581-3867 Fax No.: 8808-1819
LAS PIÑAS-MANUELA Tel. No.: 8838-9677
Alabang-Zapote Road cor. Philamlife Fax No.: 8838-9679 MANDALUYONG-D. GUEVARA N. DOMINGO
Ave., Pamplona Dos, Las Piñas City G/F 19 Libertad Plaza, G/F The Main Place, No. 1 Pinaglabanan
Tel. Nos.: 8872-9801; 8872-9572 MACAPAGAL AVE.-DOUBLEDRAGON Domingo Guevara St., Mandaluyong City cor. N. Domingo Sts., San Juan,
8872-9533; 8871-0770 DD Meridian Park Plaza, Macapagal Ave. Tel. Nos.: 8534-5528; 8534-5529 Metro Manila
Fax No.: 8871-0771 cor. EDSA Ext., Pasay City Fax No.: 8534-5529 Tel. Nos.: 8470-2915; 8470-2916
Tel. Nos.: 838-3805; 838-3804 8470-2917
LAS PIÑAS-MARCOS ALVAREZ AVE. Fax No.: 838-3804 MANDALUYONG-PIONEER Fax No.: 8551-2267
Metro Towne Center, 2020 Marcos UG-05 Globe Telecom Plaza Tower I
Alvarez Ave., Talon V, Moonwalk, MAGALLANES VILLAGE Pioneer Street, Mandaluyong City NAVOTAS
Las Piñas City G/F DHI Bldg., No. 2 Lapu-Lapu Ave. Tel. Nos.: 7746-6949; 7746-6948 No. 500 M. Naval St. near corner
Tel. Nos.: 8838-9865; 838-9724 corner EDSA, Magallanes Village, 8635-4198; 8632-1399 Lacson St., Brgy. North Bay Boulevard
Fax No.: 838-9786 Makati City Fax No.: 7746-6948 North (NBBN), Navotas City
Tel. Nos.: 7757-0272; 7757-0240 Tel. Nos.: 8283-0752; 8283-0753
8852-1290; 8852-1245 8283-0754
Fax No.: 8852-1245 Fax No.: 8283-0754

110 C H I N A B A N K I N G C O R P O R AT I O N
NOVALICHES-BAGBAG ORTIGAS COMPLEX PASAY-LIBERTAD PASONG TAMO BAGTIKAN
No. 658 Quirino Highway, G/F Padilla Building, F. Ortigas Jr. Road CBC Bldg., 184 Libertad Street, Antonio G/F Trans-Phil House 1177 Chino Roces
Bagbag, Novaliches, Quezon City (formerly Emerald Avenue), Arnaiz Ave., Pasay City Ave. cor. Bagtikan St., Makati City
Tel. Nos.: 8283-3885; 8275-3244 Ortigas Center, Pasig City Tel. Nos.: 8551-7159; 8834-8978 Tel. Nos.: 8403-4820; 8403-4821
Fax No.: 8283-3885 Tel. Nos.: 8634-3469; 8631-2772 8831-0306; 8831-0498 8403-4822; 7738-7591
Fax No.: 8633-9039 Fax Nos.: 8551-7160; 8551-7161 Fax No.: 8403-4821
NOVALICHES-GULOD
formerly Novaliches Branch ORTIGAS-JADE DRIVE PASAY-ROXAS BLVD. PASONG TAMO-CITYLAND
858 Krystle Building, Quirino Highway, Unit G-03, Antel Global Corporate GF Unit G-01 Antel Seaview Towers Units UG30-UG32 Cityland Pasong
Gulod, Novaliches, Quezon City Center, Jade Drive, Ortigas Center, 2626 Roxas Blvd., Pasay City Tamo Tower, 2210 Pasong Tamo St.,
Tel. Nos.: 8937-1133; 8937-1136 Pasig City Tel. Nos.: 8551-9067; 8551-9068 Makati City
Fax No.: 8936-1037 Tel. Nos.: 8638-4489; 8638-4490 8551-9069 Tel. Nos.: 8817-9337; 8817-9347
8638-4510; 8638-4540 Fax No.: 8551-1768 8817-9351; 8817-9360
NOVALICHES-STA. MONICA Fax No.: 8638-4540 8817-9382
G/F E & V Bldg., Quirino Highway corner PASIG-A. MABINI Fax No.: 8817-9351
Dumalay St., Novaliches, Quezon City ORTIGAS-TEKTITE A. Mabini Street, Brgy. Kapasigan,
Tel. Nos.: 8288-3683; 8288-2302 Unit EC-06B PSE Center (Tektite) Pasig City PASONG TAMO-LA FUERZA
Fax No.: 8288-3683 Ortigas Center, Pasig City Tel. Nos.: 8534-5178; 8634-4028 La Fuerza Plaza 1, Chino Roces Ave.,
Tel. Nos.: 8637-0231; 8637-0238 Fax No.: 8634-4028 Makati City
NOVALICHES-SANGANDAAN Fax No.: 8637-0231 Tel. Nos.: 8541-8850; 8541-8851
CBC Bldg., Quirino Highway corner PASIG-ESTANCIA Fax No.: 8541-8851
Tandang Sora Ave., Brgy. Sangandaan, PACO LGF Estancia (Expansion) Capitol
Novaliches, Quezon City Gen. Luna corner Escoda Street, Commons, Meralco Ave., Pasig City PATEROS
Tel. Nos.: 8935-3049; 8935-3491 Paco, Manila Tel. Nos.: 8373-4169; 8366-9697 G/F Adela Building, M. Almeda St.,
3455-5661 Tel. Nos.: 8526-6492; 8536-6630 Fax No.: 8373-4169 Brgy. San Roque, Pateros
Fax No.: 8935-2130 8536-6631; 8536-6672 Tel. Nos.: 8531-6929; 8531-6810
Fax No.: 8536-6657 PASIG-C. RAYMUNDO 8654-3079
NOVALICHES-TALIPAPA G/F MicMar Apartments No. 6353 Fax No.: 8654-3079
528 Copengco Bldg., Quirino Highway, PACO-ANGEL LINAO C. Raymundo Avenue, Brgy. Rosario,
Talipapa, Novaliches, Quezon City Unit 1636 & 1638 Angel Linao St. Pasig City PHILAM
Tel. Nos.: 8936-2202; 8936-3311 Paco, Manila Tel. Nos.: 8642-3652; 8628-3912 #8 East Lawin Drive,
8936-7765; 8936-5508 Tel. Nos.: 8242-2849; 8242-3416 8628-3922; 7576-4134 Philam Homes, Quezon City
Fax No.: 8936-2202 Fax No.: 8242-2849 Fax No.: 7576- 4134 Tel. Nos.: 8927-9841; 8924-2872
8929-5734; 8929-3115
NOVALICHES-ZABARTE PACO-OTIS PASIG-DELA PAZ Fax No.: 8929-3115
G/F C.I. Bldg., 1151 Quirino Highway G/F Union Motor Corp Bldg., Amang Rodriguez Avenue,
corner Zabarte Road, Brgy. Kaligayahan, 1760 Dra. Paz Guazon St., Paco, Manila Brgy. Dela Paz, Pasig City PROJECT 8-SHORTHORN
Novaliches, Quezon City Tel. Nos.: 8561-6902; 8561-6981 Tel. No.: 8637-7876 Shorthorn Street, Project 8,
Tel. Nos.: 8461-7691; 8461-7694 8564-2247 Fax No.: 8637-7874 Quezon City
8461-7698 Fax No.: 8561-6981 Tel. Nos.: 8373-3363; 8373-3369
Fax No.: 8461-7691 PASIG-MERCEDES Fax No.: 8373-3363
PADRE FAURA Commercial Motors Corp. Compound
NUEVA G/F Regal Shopping Center, Mercedes Ave., Pasig City PUREZA
Unit Nos. 557 & 559 G/F Ayson Building A. Mabini cor. P. Faura Sts., Tel. Nos.: 8628-0201; 8628-0209 G/F Solicarel Building
Yuchengco St., Binondo, Manila Ermita, Manila 8628-0197 Ramon Magsaysay Blvd. near corner
Tel. Nos.: 8247-6374; 8247-6396 Tel. Nos.: 8526-0586; 8527-3202 Fax No.: 8628-0211 Pureza St., Sta. Mesa, Manila
8247-0493; 8527-7865 Tel. Nos.: 8241-3313; 8241-3314
Fax No.: 8247-6396 Fax No.: 8527-3202 PASIG-ROSARIO Fax No.: 8241-3314
1864 Ortigas Ave. Ext.,
ONGPIN PADRE RADA Rosario, Pasig City QUEZON AVE.
G/F Se Jo Tong Building, G/F Gosiupo Bldg., Padre Rada Tel. Nos.: 8254-4859; 8244-8839 No. 18 G & D Bldg., Quezon Ave.
808 Ongpin Street, Sta. Cruz, Manila corner Elcano Sts., Tondo, Manila Fax No.: 8254-4859 cor. D. Tuazon St., Quezon City
Tel. Nos.: 8733-8962; 8733-8963 Tel. Nos.: 8277-1106; 8371-4300 Tel. Nos.: 8712-3676; 8712-0424
8733-8964; 8733-8965 Fax No.: 8277-1106 PASIG-SAN JOAQUIN 8740-7779; 8740-7780
8733-8966; 8735-5362 No. 43 M. Concepcion Ave., 8712-1105; 3416-8891
Fax No.: 8733-8964 PARAÑAQUE-BACLARAN San Joaquin, Pasig City Fax No.: 8712-3006
Quirino Avenue cor. Aragon St., Tel. Nos.: 8997-2815; 8997-2816
OROQUIETA Baclaran, Parañaque City 8997-2817 QUEZON AVE.-SCT. CHUATOCO
1225-1227, Oroquieta St., Tel. No.: 8581-1057 Fax No.: 8997-2815 Estuar Building, No.880 Quezon Ave.,
Sta. Cruz, Manila Fax No.: 8663-0425 Brgy. Paligsahan, Quezon City
Tel. Nos.: 8521-6648; 8521-6650 PASIG-SANTOLAN Tel. Nos.: 8351-0563; 8351-0567
Fax No.: 8521-6650 PARAÑAQUE-MOONWALK G/F Felmarc Business Center, Amang Fax No.: 8351-0563
Milky Way St. cor. Armstrong Avenue, Rodriguez Avenue, Santolan, Pasig City
ORTIGAS-ADB AVE. Moonwalk, Parañaque City Tel. Nos.: 8646-0635; 8682-3474 QUIAPO
LGF City & Land Mega Plaza Tel. Nos.: 8846-9729; 8846-9771 8682-3514; 8681-4575 216-220 Villalobos St., Quiapo, Manila
ADB Ave. cor. Garnet Road Fax No.: 8846-9739; 8846-9740 Fax No.: 8646-0514 Tel. Nos.: 8733-2052; 8733-2059
Ortigas Center, Pasig City 8733-2061; 8733-6282
Tel. Nos.: 8687-2457; 8687-2458 PARAÑAQUE-NAIA BRANCH PASIG-SM SUPERCENTER 8733-6286
8687-2226; 8687-3263 Ninoy Aquino Ave., Brgy. San Dionisio, G/F SM Supercenter Pasig, Frontera Fax Nos.: 8733-6282
Fax No.: 8687-2457 Parañaque City Drive, C-5, Ortigas, Pasig City 8733-2061 (temporary fax)
Tel. Nos.: 8541-8857; 8541-8858 Tel. Nos.: 8706-3207; 8706-3208
ORTIGAS AVE. EXT.-RIVERSIDE Fax No.: 8541-8857 8706-3209 REGALADO AVE.
Unit 2-3 Riverside Arcade Fax No.: 8706-3209 CBC Bldg., Regalado Ave.,
Ortigas Avenue Extension corner PARAÑAQUE-SAN ANTONIO VALLEY North Fairview, Quezon City
Riverside Drive, Brgy. Sta. Lucia, San Antonio Shopping Center, PASIG-VALLE VERDE Tel. Nos.: 8921-5678; 8921-5359
Pasig City San Antonio Road, Brgy. San Antonio G/F Reliance IT Center, Fax No.: 8921-5359
Tel. Nos.: 7748-1808; 7748-4426 Valley 1, Parañaque City E. Rodriguez Jr. Ave., Ugong, Pasig City
8655-7403; 8655-8350 Tel. Nos.: 8816-2448; 8816-2451 Tel. Nos.: 8706-9242; 8706-9243 REGALADO AVE.-WEST FAIRVIEW
Fax No.: 8655-8350 Fax No.: 8816-2451 Fax No.: 8706-9243 CBC Bldg., Regalado Ave.
corner Bulova St., Quezon City
ORTIGAS CENTER PARAÑAQUE-SUCAT PASO DE BLAS Tel. Nos.: 8936-2554; 8936-2556
Unit 101 Parc Chateau Condominium No. 8260 (between AMA Computer G/F CYT Bldg., No. 178 Paso de Blas, Fax No.: 8936-2554
Onyx corner Sapphire Streets, School and PLDT), Dr. A. Santos Valenzuela City
Ortigas Center, Pasig City Avenue, Brgy. San Isidro, Tel. Nos.: 8292-3215/3213/3216 RIZAL-ANGONO
Tel. Nos.: 8633-7960; 8633-7970 Parañaque City 3444-8850 Lot 3 Blk. 4 M.L Quezon Ave.
8633-7953; 8633-7954 Tel. Nos.: 8826-4072; 8820-8952 Fax No.: 3444-8850 Richmond Subd., Angono, Rizal
8634-0178 8820-2044; 8825-2501 Tel. Nos.: 8633-5198; 8633-7513
Fax No.: 8633-7971 Fax No.: 8825-9517 Fax No.: 8633-7513

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 111
 China Bank Branches
RIZAL-SAN MATEO SCT. BORROMEO SM CITY FAIRVIEW STA. MESA
#63 Gen. Luna corner Simon St., G/F The Forum Building, LGF, SM City Fairview 1-B G. Araneta Avenue,
Banaba, San Mateo, Rizal 71- A Sct. Borromeo St., Diliman, Quirino Avenue corner Regalado Avenue Brgy. Doña Imelda, Quezon City
Tel. No.: 8650-2230 Quezon City Fairview, Quezon City Tel. Nos.: 8516-0764; 8516-0765
Fax No.: 8650-1837 Tel. Nos.: 8426-1431; 8426-1340 Tel. Nos.: 3417-2878; 8939-3105 8516-0766
Fax No.: 8426-1431 Fax No.: 3418-8228 Fax No.: 8516-0764
ROCKWELL-ORTIGAS
G/F Tower 1 Rockwell Business Center, SHAW-GOMEZVILLE SM MALL OF ASIA STO. CRISTO
Ortigas Avenue, Pasig City Gomezville Street cor. Shaw Blvd., G/F Main Mall Arcade, SM Mall of Asia, 622-39 Sto. Cristo St., Binondo, Manila
Tel. Nos.: 8470-4704; 8470-2984 Mandaluyong City Bay Blvd., Pasay City Tel. Nos.: 8242-4673; 8242-5361
Fax No.: 8470-2984 Tel. No.: 8363-3522 Tel. Nos.: 8556-0103; 7625-2246 8241-1243; 8242-5449
Fax No.: 8363-3522 Fax No.: 8556-0099 8242-3670; 8242-4668
ROOSEVELT AVE. Fax Nos.: 8242-4672; 8242-4761
CBC Bldg., #293 Roosevelt Ave., SHAW-HAIG SM MEGAMALL
San Francisco Del Monte, Quezon City G/F First of Shaw Bldg., LGF Building A, SM Megamall, STO. CRISTO-C.M. RECTO
Tel. Nos.: 8371-5133; 8371-5134 Shaw Blvd. corner Haig St., E. delos Santos Avenue 858 Sto. Cristo Street, Manila
8371-5135; 8371-2766 Mandaluyong City corner J. Vargas St., Mandaluyong City Tel. Nos.: 8562-9651; 8562-9652
3410-2160; 3410-1957 Tel. Nos.: 8534-1073; 8534-0744 Tel. Nos.: 8633-1611; 8633-1612 8254-7227
Fax No.: 8371-2765 7621-6459 8633-1788; 8633-1789 Fax No.: 8562-9652
Fax No.: 7576-3841 8638-7213; 8638-7214
ROOSEVELT AVE.-FRISCO 8638-72115 STO. DOMINGO AVE.
G/F Norita Bldg., #51 H. Francisco St. SHAW-PASIG Fax Nos.: 8633-4971; 8633-1788 Sto. Domingo Ave., Quezon City
corner Roosevelt Ave. Brgy. Paraiso, G/F RCC Center, Tel. Nos.: 8251-6005; 8251-5852
Quezon City No. 104 Shaw Boulevard, Pasig City SM CITY MASINAG Fax No.: 8251-5852
Tel. Nos.: 8709-7552; 8921-0866 Tel. Nos.: 8634-5018; 8634-5019 SM City Masinag, Marcos Highway,
Fax No.: 8921-0866 8634-3343; 8634-3344 Brgy. Mayamot, Antipolo City T. ALONZO
8634-3340; 7747-7812 Tel. Nos.: 8655-8764; 8655-8771 Abeleda Business Center
SALCEDO VILLAGE-L.P. LEVISTE Fax No.: 8634-3344 Fax No.: 8655-9124 908 T. Alonzo corner Espeleta Streets,
Unit 1-B G/F, The Athenaeum Sta. Cruz, Manila
San Agustin - LP Leviste St., SHAW-SUMMIT ONE SM CITY NORTH EDSA Tel. Nos.: 8733-9581; 8733-9582
Salcedo Village, Makati City Unit 102 Summit One Office Tower Cyberzone Carpark Bldg., 8734-3231; 8734-3232
Tel. Nos.: 8869-3128; 8869-3132 530 Shaw Boulevard, Mandaluyong City SM City North Avenue 8734-3233
8869-3134 Tel. Nos.: 8531-3970; 8531-5736 corner EDSA, Quezon City Fax No.: 8733-9582
Fax No.: 8869-3132 8531-4058; 8531-1304 Tel. Nos.: 3456-6633; 3454-8108
8533-8723; 8533-4948 3454-8121; 8925-4273 TAFT AVE.-NAKPIL
SALCEDO VILLAGE- TORDESILLAS Fax No.: 8531-9469 Fax No.: 8927-2234 G Square Taft Ave. corner Nakpil St.,
G/F Prince Tower Condominium Malate, Manila
14 Tordesillas St., Salcedo Village, SM AURA PREMIER SM NORTH TOWERS Tel. Nos.: 8681-2830; 8631-9745
Makati City L/G SM Aura Premier, McKinley SM City North EDSA North Towers, Fax No.: 8681-2830
Tel. Nos.: 8813-4901; 8813-4932 Parkway, Fort Bonifacio Global City, SM City North EDSA Complex,
8813-4933; 8813-4944 Taguig City Quezon City TAFT AVE.-QUIRINO
8813-4952 Tel. Nos.: 8808-9727; 8808-9701 Tel. Nos.: 8241-2172; 8251-5122 2178 Taft Avenue near corner Quirino
Fax No.: 8813-4933 Fax No.: 8808-9701 Fax No.: 8241-2172 Avenue, Malate, Manila
Tel. Nos.: 8521-7825; 8527-3285
SALCEDO VILLAGE- VALERO SM CITY BICUTAN EDSA-PHILAM 8527-6747
G/F Valero Tower, 122 Valero Street LGF, Bldg. B, SM City Bicutan 917 EDSA, Brgy. Philam, Quezon City Fax No.: 8527-3285
Salcedo Village, Makati City Doña Soledad Ave. Tel. Nos.: 8374-2345; 8374-2362
Tel. Nos.: 8892-7768; 8892-7769 cor. West Service Rd., Parañaque City 8287-3106 TANDANG SORA-VISAYAS AVE.
8812-9207; 8893-8188 Tel. Nos.: 8821-0600; 8821-0700 Fax No.: 8287-3106 #250 Tandang Sora Ave., Quezon City
8893-8196 8777-9347 Tel. Nos.: 8426-3818; 8426-3541
Fax No.: 8892-7769 Fax No.: 8821-0500 SM SOUTHMALL Fax No.: 8426-3541
UGF SM Southmall Alabang-Zapote
SALES-RAON SM CITY BF PARAÑAQUE Road, Talon 1, Almanza, Las Piñas City TAYTAY- SAN JUAN
611 Sales St., Quiapo, Manila G/F SM City BF Parañaque, Dr. A. Tel. Nos.: 8806-6116; 8806-6119 Velasquez St., Sitio Bangiad,
Tel. Nos.: 8734-5806; 8734-7427 Santos Ave. corner President’s Avenue, 8806-3536; 8806-3547 Brgy. San Juan, Taytay, Rizal
8734-6959 Parañaque City Fax No.: 8806-3548 Tel. No.: 8998-6649
Fax No.: 8734-5806 Tel. Nos.: 8553-3067; 8825-2990 Fax No.: 8998-6649
8825-3095; 8825-3201 SOLEMARE
SAN ANTONIO VILLAGE-KAMAGONG Fax No.: 8825-1062 G-11 Solemare Parksuites, 5A Bradco TAYTAY-ORTIGAS EXENSION
Kamagong near corner St. Paul Streets, Avenue, Aseana Business Park, Ortigas Ave. Ext., Taytay, Rizal
San Antonio Village, Makati City SM CITY MARIKINA Parañaque City Tel. No.: 8727-1667
Tel. Nos.: 8777-4950; 8777-4951 G/F SM City Marikina, Marcos Highway, Tel. Nos.: 8366-3237; 8366-3219 Fax No.: 8727-5873
Fax No.: 8777-4951 Brgy. Calumpang, Marikina City 8366-3199
Tel. Nos.: 8477-1845; 8477-1846 Fax No.: 8366-3199 TIMOG AVE.
SAN ANTONIO VILLAGE-P. OCAMPO 8477-1847; 7799-6105 G/F Prince Jun Condominium,
JM Macalino Auto Center, Fax No.: 8477-1847 SOLER-168 42 Timog Ave., Q.C.
P. Ocampo Street cor. Dungon St., G/F R & S Bldg, Soler St., Manila Tel. Nos.: 8371-4523; 8371-4524
San Antonio Village, Makati City SM CITY SAN LAZARO Tel. Nos.: 8242-1041; 8242-1674 8371-4522; 8371-4506
Tel. Nos.: 8869-5648; 8869-5649 UGF (Units 164-166) SM City 8242-1685 Fax No.: 8371-4503
Fax No.: 8869-5651 San Lazaro, Felix Huertas Street Fax No.: 8242-1041
corner A.H. Lacson Extension, THE MEDICAL CITY
SAN JUAN Sta. Cruz, Manila SOLER-ARRANQUE 2/F Medical Arts Building,
17 (new) F. Blumentritt St., Tel. Nos.: 8742-1572; 8742-2330 #715 T. Alonzo St. near corner CM Recto The Medical City, Ortigas Ave.,
San Juan, Metro Manila 8493-7115 Avenue, Sta. Cruz, Manila Pasig City
Tel. Nos.: 8724-8263; 8726-4826 Fax No.: 8732-7935 Tel. Nos.: 8983-9496; 8983-9497 Tel. Nos.: 8372-7701; 8372-7716
8723-7333; 7744-5616 Fax No.: 8983-9497 Fax No.: 8372-7701
7744-5617; 7744-5618 SM CITY TAYTAY
Fax No.: 8723-4998 Unit 147 Bldg. B, SM City Taytay, Manila SOUTH TRIANGLE TRINOMA
East Road, Brgy. Dolores, Taytay, Rizal G/F Sunshine Blvd. Plaza, Unit P002, Level P1, Triangle North of
SAN JUAN-J. ABAD SANTOS Tel. Nos.: 8286-5844; 8286-5979 Quezon Ave. cor. Sct. Santiago and Manila, North Avenue corner EDSA,
Unit 3 Citiplace Bldg., 8661-2276; 8661-2277 Panay Ave., Bgry. South Triangle, Quezon City
8001 Jose Abad Santos Street, Fax No.: 8661-2235 Quezon City Tel. Nos.: 7901-5570; 7901-5571
Little Baguio, San Juan, Metro Manila Tel. Nos.: 8277-7947; 8277-7948 7901-5572; 7901-5573
Tel. Nos.: 8470-8292; 8656-8329 Fax No.: 8277-7948 Fax No.: 7901-5573
Fax No.: 8656-8329

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TOMAS MAPUA-LAGUNA XAVIERVILLE BALANGA CITY BULACAN-BALAGTAS
CBC Bldg., Tomas Mapua St. 65 Xavierville Ave., Loyola Heights, G/F Dilig Building, Don Manuel Mac Arthur Highway, Brgy. San Juan,
Sta. Cruz, Manila Quezon City Banzon Street, Balanga City, Bataan Balagtas, Bulacan
Tel. Nos.: 8289-7923; 8361-3271 Tel. Nos.: 3433-8696; 8929-1265 Area Code: (047) Area Code: (044)
Fax No.: 8711-9849 8927-9826 Tel. Nos.: 237-9388; 237-9389 Tel. Nos.: 769-4376; 769-0359
Fax No.: 8929-3343 791-1779 Fax No.: 769-4376
TOMAS MORATO-E. RODRIGUEZ Fax No.: 791-1779
1427 Tomas Morato Ave., Quezon City ZOBEL ROXAS BULACAN-GUIGUINTO
Tel. Nos.: 8470-3037; 8477-1472 1247 Zobel Roxas Ave. BALER CBC Bldg., Cagayan Valley Road,
Fax No.: 8470-3037 corner Taal Street, Malate, Manila Provincial Road, Barrio Suklayain, Brgy. Sta. Rita, Guiguinto, Bulacan
Tel. Nos.: 8254-4644; 8252-0831 Baler, Aurora Area Code: (044)
TOMAS MORATO EXTENSION Fax No.: 8254-4644 Area Code: (042) Tel. Nos.: 764-0879; 764-0886
QY Bldg., Tomas Morato Ave., Tel. Nos.: 724-0026 Fax No.: 764-0879
Quezon City LUZON 8703-3331 (manila line)
Tel. Nos.: 8373-4960; 8373-4961 Fax No.: 724-0026 BULACAN-PLARIDEL
Fax No.: 8373-4961 ALBAY CBC Bldg., Cagayan Valley Road,
Rizal St. cor. Gov. Reynold Street, BALIWAG Plaridel, Bulacan
999 MALL Old Albay District, Legazpi City Km. 51, Doña Remedios Trinidad (DRT) Area Code: (044)
Unit 3D-5; 3D-7 999 Shopping Mall Area Code: 052 Highway, Baliwag, Bulacan Tel. Nos.: 931-2332; 325-0069
Bldg. 2 Recto-Soler Sts. Tel. Nos.: 742-0893; 742-0894 Area Code: (044) Fax No.: 931-2293
Binondo, Manila Fax No.: 742-0894 Tel. Nos.: 766-1066; 766-5257
Tel. Nos.: 8523-1216; 8523-1217 673-5338 BULACAN-STA. MARIA
8523-1218; 8523-1219 ANGELES CITY Fax No.: 766-5257 J.P Rizal corner C. de Guzman St. ,
Fax No.: 8523-1215 CBC Bldg., 949 Henson St., Poblacion, Sta. Maria
Angeles City BATAAN-DINALUPIHAN Area Code: (044)
TUTUBAN PRIME BLOCK Area Code: 045 GNI Building, San Ramon Highway Tel. Nos.: 288-2006; 815-2951
Rivera Shophouse, Podium Area, Tel. Nos.: 887-1549; 323-5343 corner Doña Rosa Street and 913-0334
Tutuban Center Prime Block, 887-1550; 887-2291 Mabini Ext., Dinalupihan, Bataan Fax No.: 288-2006
C.M. Recto Ave. corner Rivera Street, 625-8660; 625-8661 Area Code: (047)
Manila Fax No.: 625-8661 Tel. Nos.: 636-1451; 636-1452 CABANATUAN CITY
Tel. Nos.: 8255-1414; 8255-1415 Fax No.: 636-1451 Melencio cor. Sanciangco Sts.
8255-5441 ANGELES CITY-BALIBAGO Cabanatuan City
Fax No.: 8255-5441 Diamond Square, Service Road BATANGAS CITY Area Code: (044)
McArthur Highway cor. Charlotte St. P. Burgos Street, Batangas City Tel. Nos.: 600-4265; 463-0935
UP TECHNO HUB Balibago, Angeles City, Pampanga Area Code: (043) 463-0936
UP AyalaLand Techno Hub, Area Code: (045) Tel. Nos.: 723-0953 Fax No.: 463-0936
Commonwealth Ave., Quezon City Tel. Nos.: 892-5136; 892-5144 8520-6118 (Manila Line)
Tel. Nos.: 8441-1331; 8441-1332 Fax No.: 892-5136 Fax Nos.: 402-9157 CABANATUAN-MAHARLIKA
8441-1334; 7738-4800 8520-6118 (Manila Line) CBC Bldg., Maharlika Highway
Fax No.: 8441-1332 ANGELES CITY-MARQUEE MALL Cabanatuan City
G/F Marquee Mall, Angeles City, BATANGAS-BALAYAN Area Code: (044)
UP VILLAGE-MAGINHAWA Pampanga CBC Building, Barrio Ermita, Tel. Nos.: 463-8586; 463-8587
LTR Bldg., No. 46 Maginhawa St., Area Code: (045) Balayan, Batangas 463-7964; 600-3590
UP Village, Quezon City Tel. Nos.: 436-4013; 304-0850 Area Code: (043) 940-2395
Tel. Nos.: 8373-3349; 8373-3354 889-0975 Tel. Nos.: 741-5028; 741-5180 Fax No.: 463-8587
Fax No.: 8373-3349 Fax No.: 304-0850 Fax No.: 741-5028
CALAPAN CITY
V. LUNA ANGELES-MCARTHUR HIGHWAY BATANGAS-BAUAN J.P. Rizal St., San Vicente, Calapan City,
G/F AGGCT Bldg., No. 32 V. Luna CBC Bldg., San Pablo St. corner 62 Kapitan Ponso St., Bauan, Batangas Oriental Mindoro
cor. Matapat Sts., Brgy. Pinyahan, Mc Arthur Highway, Angeles City Area Code: (043) Area Code: (043)
Quezon City Area Code: (045) Tel. Nos.: 702-4481; 702-5383 Tel. Nos.: 288-8978; 288-8508
Tel. Nos.: 8772-8992; 8772-8564 Tel. Nos.: 323-5793; 887-6028 Fax No.: 702-4481 441-0382
Fax No.: 8772-8564 625-9362 Fax No.: 441-0382
Fax No.: 887-6029 BATANGAS-LEMERY
VALENZUELA Miranda Building, Ilustre Avenue, CAMALANIUGAN
CBC Bldg., Mc Arthur Highway ANGELES-STO. ROSARIO Lemery, Batangas CBC Bldg., National Highway,
cor. V. Cordero St., Marulas, Angeles Business Center Bldg., Area Code: (043) Camalaniugan, Cagayan
Valenzuela City Teresa Avenue, Nepo Mart Complex, Tel. Nos.: 409-3467; 984-0206 Area Code: (078)
Tel. Nos.: 8293-8920; 8293-6160 Angeles City, Pampanga Fax No.: 409-3467 Tel. Nos.: 377-2836; 377-2837
8293-5088; 8293-5089 Area Code: (045) Fax No.: 377-2837
8293-5090; 3445-0657 Tel. Nos.: 888-5175; 322-9596 BATANGAS CITY-KUMINTANG ILAYA
Fax No.: 8293-5091 Fax No.: 888-5175 CBC Bldg., Brgy. Kumintang Ilaya, CANDON CITY
Batangas City, Batangas CBC Bldg., National Road, Poblacion,
VALENZUELA-GEN. LUIS APALIT Area Code: (043) Candon City, Ilocos Sur
AGT Building, 425 Gen. Luis Street CBC Bldg., McArthur Highway, Tel. Nos.: 702-6823 Area Code: (077)
Paso de Blas, Valenzuela City San Vicente, Apalit, Pampanga Fax No.: 702-6826 Tel. Nos.: 674-0574; 674-0554
Tel. Nos.: 3443-6160; 3443-6161 Area Code: (045) Fax No.: 674-0574
8983-3861; 8983-3862 Tel. Nos.: 652-1131 BATANGAS-ROSARIO
Fax No.: 3443-6161 Fax No.: 302-9560 Dr. Gualberto Ave., Brgy. Namunga, CARMONA
Rosario, Batangas CBC Bldg., Paseo de Carmona
VALENZUELA-MALINTA BAGUIO CITY Area Code: (043) Brgy. Maduya, Carmona, Cavite
MacArthur Highway, Brgy. Malinta, G/F Juniper Bldg., A. Bonifacio Rd., Tel. Nos.: 312-3748; 312-3776 Area Code: (046)
Valenzuela City Baguio City Fax No.: 312-3748 Tel. Nos.: 430-1969; 430-1277
Tel. Nos.: 8282-2160; 8282-2013 Area Code: (074) 430-3568
Fax No.: 8282-2013 Tel. Nos.: 442-9581; 443-5908 BATANGAS-SAN JUAN 8475-3941 (Manila line)
443-8659; 443-8660 Rizal St. near corner Gen. Luna St., Fax No.: 430-1277
VISAYAS AVE. 442-9663 Poblacion, San Juan, Batangas
CBC Bldg., Visayas Avenue corner Fax No.: 442-9663 Area Code: (043) CAUAYAN CITY
Congressional Ave. Ext., Quezon City Tel. Nos.: 740-0280; 740-0282 G/F Prince Christopher Bldg.
Tel. Nos.: 3454-0189; 3455-4334 BAGUIO CITY-ABANAO Fax No.: 740-0280 Maharlika Highway, Cauayan City,
3455-4335; 8925-2173 G/F Paladin Hotel, No. 136 Abanao Ext. Isabela
Fax No.: 8925-2155 corner Cariño St., Baguio City BATANGAS-TANAUAN Area Code: (078)
Area Code: (074) J.P. Laurel Highway, Tanauan City, Tel. Nos.: 652-1849; 897-1338
WEST AVE. Tel. Nos.: 424-4837; 424-4838 Batangas 652-0061
82 West Avenue, Quezon City Fax No.: 424-4838 Area Code: (043) Fax No.: 652-1849
Tel. Nos.: 8924-3131; 8924-3143 Tel. Nos.: 702-8956; 702-8957
8924-6363; 8920-6258 Fax No.: 702-8956
8928-3270; 3411-6010
3411-6011
Fax No.: 8924-6364

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 China Bank Branches
CAVITE-DASMARIÑAS ILOCOS NORTE-SAN NICOLAS LAGUNA-LOS BAÑOS MEYCAUAYAN
G/F CBC Bldg., Gen. E. Aguinaldo National Highway, Brgy. 2 San Baltazar, National Road, San Antonio, CBC Bldg., Malhacan Road,
Highway, Dasmariñas, Cavite San Nicolas, Ilocos Norte Los Baños, Laguna Meycauayan, Bulacan
Area Code: (046) Area Code: (077) Area Code: (049) Area Code: (044)
Tel. Nos.: 416-5036; 416-5039 Tel. Nos.: 600-0994; 600-0995 Tel. Nos.: 557-3223; 557-3224 Tel. Nos.: 815-6889; 815-6961
416-5040 Fax No.: 600-0995 Fax No.: 557-3223 815-6958
8584-40-83 (Manila line) Fax No.: 815-6961
Fax No.: 416-5036 IRIGA CITY LAGUNA-SAN PEDRO
Highway 1, JP Rizal St., San Roque, No. 365 Brgy. Nueva, National Highway, NAGA CITY
CAVITE-GEN. TRIAS Iriga City, Camarines Sur San Pedro City, Laguna Centro-Peñafrancia Street, Naga City
Lot 12 Brookeside Lane 5 Area Code: (054) Tel. Nos.: 8816-3864; 8816-4862 Area Code: (054)
Arnaldo Highway, Brgy. San Francisco, Tel. Nos.: 299-7000; 456-1498 Fax No.: 8816-4862 Tel. Nos.: 472-1359; 472-1358
Gen. Trias City, Cavite Fax No.: 456-1498 473-7920
Area Code: (046) LAGUNA-STA. CRUZ Fax No.: 8250-8169 (Manila line)
Tel. Nos.: 482-8993; 482-8995 ISABELA-ILAGAN A. Regidor St., Sta. Cruz, Laguna
Fax No.: 482-8993 G/F North Star Mall, Maharlika Highway, Area Code: (049) NUEVA ECIJA-STA. ROSA
Brgy. Alibagu, Ilagan, Isabela Tel. Nos.: 501-4977; 501-4107 CBC Bldg., Maharlika Highway,
CAVITE-IMUS Area Code: (078) 501-4085 Poblacion, Sta. Rosa, Nueva Ecija
G/F CBC Bldg., Nueno Avenue Tel. Nos.: 323-0179; 323-0178 Fax No.: 501-4107 Area Code: (044)
Tanzang Luma, Imus, Cavite Fax No.: 323-0179 Tel. Nos.: 333-6215; 940-1407
Area Code: (046) LAOAG CITY Fax No.: 333-6215
Tel. Nos.: 970-8726; 970-8764 ISABELA-ROXAS Liberato Abadilla Street, Brgy. 17
471-2637; 471-7094 National Road, Brgy. Bantug, San Francisco, Laoag City OCC. MINDORO-SAN JOSE
Fax No.: 471-2637 Roxas, Isabela Area Code: (077) Liboro corner Rizal Street, San Jose,
Area Code: (078) Tel. Nos.: 772-1024; 772-1027 Occidental Mindoro
CAVITE- MOLINO Tel. Nos.: 376-0422; 376-0434 771-4688; 771-4417 Area Code: (043)
Patio Jacinto, Molino Road, Molino 3, Fax No.: 642-0022 Fax No.: 772-1035 Tel. Nos.: 491-0095; 491-0096
Bacoor, Cavite Fax No.: 491-0095
Area Code: (046) GAPAN LEGAZPI CITY
Tel. Nos.: 431-0632; 484-6295 G/F Waltermart Center - Gapan, G/F Emma Chan Bldg., F. Imperial St., OLONGAPO-DOWNTOWN
Fax No.: 431-0901 Maharlika Highway, Brgy. Bayanihan, Legazpi City No. 2 corner 20th St., East Bajac-Bajac,
Gapan, Nueva Ecija Area Code: (052) Olongapo City
CAVITE-ROSARIO Area Code: (044) Tel. Nos.: 480-6048; 480-6519 Area Code: (047)
G/F CBC Building, Gen Trias Drive, Tel. Nos.: 486-0217; 486-0434 214-3077 Tel. No.: 610-9826
Rosario, Cavite 486-0695 Fax No.: 8429-1813 (Manila line) Fax No.: 610-9826
Area Code: (046) Fax No.: 486-0434
Tel. Nos.: 437-0057; 437-0058 LIPA CITY-TAMBO PANGASINAN-ALAMINOS CITY
437-0059 GUAGUA Tambo, Lipa City, Batangas Marcos Avenue, Brgy. Palamis,
Fax No.: 437-0058 Yabut Building, Plaza Burgos, Area Code: (043) Alaminos City, Pangasinan
Guagua, Pampanga Tel. Nos.: 757-6331; 757-6332 Area Code: (075)
CAVITE- SILANG Area Code: (045) Fax No.: 757-6331 Tel. Nos.: 551-3859; 654-0286
CBC Bldg., J.P Rizal St. Tel. Nos.: 458-1043; 458-1045 Fax No.: 654-0296
Poblacion, Silang, Cavite 458-1046 LUCENA CITY
Area Code: (046) Fax No.: 458-1043 233 Quezon Avenue, Lucena City PANGASINAN-BAYAMBANG
Tel. Nos.: 413-5095; 413-4826 Area Code: (042) CBC Bldg., No. 91, Poblacion Sur,
413-5500; 413-5417 LA TRINIDAD Tel. Nos.: 373-2317; 373-3872 Bayambang, Pangasinan
Fax No.: 413-5095 G/F SJV Bulasao Building, 373-3880; 373-3887 Area Code: (075)
Km. 4, La Trinidad, Benguet 660-7861 Tel. Nos.: 632-5776; 632-5775
CLARK FREEPORT ZONE Area Code: (074) Fax No.: 373-3879 Fax No.: 632-5776
Stotsenberg Lifestyle Center, Tel. Nos.: 422-2065; 422-2590
Quirino Sr. cor. N. Aquino Streets, Clark 309-1663 MABALACAT-DAU PANGASINAN-ROSALES
Freeport Zone, Angeles City, Pampanga Fax No.: 422-2065 R.D. Policarpio Bldg., McArthur CBC Bldg., Calle Dewey,
Area Code: (045) Highway, Dau, Mabalacat, Pampanga Rosales, Pangasinan
Tel. Nos.: 499-8060; 499-8062 LA UNION-AGOO Area Code: (045) Area Code: (075)
499-8063 National Highway, San Jose Norte, Tel. Nos.: 892-4969; 892-6040 Tel. Nos.: 633-3852; 633-3853
Fax No.: 499-8063 Agoo, La Union Fax No.: 892-6040 Fax No.: 633-3852
Area Code: (072)
DAET Tel. Nos.: 682-0350; 682-0391 MALOLOS CITY PANGASINAN-URDANETA
Vinzons Avenue, Daet, Camarines Norte Fax No.: 682-0350 G/F Graceland Mall, BSU Grounds, EF Square Bldg., Mc Arthur Highway,
Area Code: (054) McArthur Highway, Guinhawa, Poblacion Urdaneta City, Pangasinan
Tel. Nos.: 440-0066; 440-0067 LA UNION-SAN FERNANDO Malolos City, Bulacan Area Code: (075)
Fax No.: 472-1358 Roger Pua Phee Building, Area Code: (044) Tel. Nos.: 632-2637; 632-0541
National Highway, Brgy. 3, Tel. Nos.: 794-5840; 662-2013 656-2022; 656-2618
DAGUPAN-PEREZ San Fernando, La Union Fax No.: 794-5840 Fax No.: 656-2618
Siapno Building, Perez Boulevard, Area Code: (072)
Dagupan City Tel. Nos.: 607-8931; 607-8932 MARILAO PASEO DE STA. ROSA
Area Code: (075) 607-8933; 607-8934 G/F, SM City Marilao Unit 3, Paseo 5, Paseo de Sta. Rosa,
Tel. Nos.: 522-2562; 522-2563 Fax No.: 607-8934 Km. 21, Brgy. Ibayo, Marilao, Bulacan Sta. Rosa City, Laguna
522-2564; Area Code: (044) Area Code: (049)
Fax No.: 522-8308 LAGUNA-BIÑAN Tel. Nos.: 815-8956; 815-8957 Tel. Nos.: 837-1831; 502-3016
G/F Raja Cordelle Bldg., Fax No.: 815-8956 502-2859; 827-8178
DAGUPAN-M.H. DEL PILAR National Highway, Brgy. San Vicente, 8420-8042 (Manila line)
Carried Realty Bldg., Biñan, Laguna MARIVELES-FAB Fax No.: 8420-8042 (Manila line)
No. 28 M.H. del Pilar Street Area Code: (049) Tamayo’s Building, Avenue of the
Dagupan City Tel. Nos.: 511-3196; Philippines Brgy. Malaya, Freeport Area QUEZON-CANDELARIA
Area Code: (075) 8245-0440 (Manila Line) of Bataan (FAB), Mariveles, Bataan Pan Philippine Highway cor. Del Valle
Tel. Nos.: 523-5606; 522-8929 Fax No.: 511-3196 Area Code: (047) Street, Poblacion, Candelaria, Quezon
632-0430; 632-0583 Tel. Nos.: 633-9569; 633-9699 Area Code: (042)
Fax No.: 523-5606 LAGUNA-CABUYAO Fax No.: 633-9569 Tel. Nos.: 797-4298; 797-4299
G/F Centro Mall, Cabuyao City, Laguna Fax No.: 797-4298
DOLORES Area Code: (049) MASBATE
CBC Bldg., McArthur Highway, Tel. Nos.: 544-2287; 544-2289 Espinosa Bldg., Zurbito St., SAN FERNANDO
Dolores, City of San Fernando, Fax No.: 544-2287 Masbate City, Masbate CBC Bldg., V. Tiomico Street
Pampanga Area Code: (056) City of San Fernando, Pampanga
Area Code: (045) LAGUNA-CALAMBA Tel. Nos.: 333-2363; 333-2365 Area Code: (045)
Tel. Nos.: 963-3413; 963-3414 CBC Bldg., National Highway, Fax No.: 333-2365 Tel. Nos.: 961-3542; 961-3549
963-3415; 860-1780 Crossing, Calamba, Laguna 963-5458; 963-5459
860-1781 Area Code: (049) 963-5460; 961-5651
Fax No.: 963-1014 Tel. Nos.: 545-7134; 545-7135 860-1925; 892-3211
545-7136; 545-7137 Fax No.: 961-8352
545-7138
Fax No.: 545-7138

114 C H I N A B A N K I N G C O R P O R AT I O N
SAN FERNANDO-SINDALAN SM CITY PAMPANGA TARLAC-BAMBAN VISAYAS
Jumbo Jenra Sindalan, Brgy. Sindalan, Unit AX3 102, Building 4, SM City National Road, Bgry. Anupul,
San Fernando City, Pampanga Pampanga, Mexico, Pampanga Bamban, Tarlac ANTIQUE-SAN JOSE
Area Code: (045) Area Code: (045) Area Code: (045) Felrosa Building, Gen. Fullon St. corner
Tel. Nos.: 866-5464; 455-0569 Tel. Nos.: 455-0304; 455-0305 Tel. No.: 925-0402 Cerdena St., San Jose, Antique
Fax No.: 861-3081 455-0306; 455-0307 Fax No.: 925-0402 Area Code: (036)
Fax No.: 455-0307 Tel. Nos.: 540-7095; 540-7097
SAN JOSE CITY TARLAC-CAMILING Fax No.: 540-7096
Maharlika Highway, Brgy. Malasin, SM CITY SAN JOSE DEL MONTE Savewise Super Market,
San Jose City UGF SM City San Jose Del Monte, Poblacion, Camiling, Tarlac BACOLOD-ARANETA
Area Code: (044) San Jose Del Monte City, Bulacan Area Code: (045) CBC Bldg., Araneta corner
Tel. Nos.: 958-9094; 958-9096 Area Code: (044) Tel. Nos.: 491-6445; 934-5085 San Sebastian Streets, Bacolod City
511-2898 Tel. Nos.: 913-1562 934-5086 Area Code: (034)
Fax No.: 958-9094 8985-3067 (Manila Line) Fax No.: 934-5085 Tel. Nos.: 435-0247; 435-0248
Fax No.: 913-1562 433-3818; 433-3819
SAN PABLO CITY TARLAC-CONCEPCION 433-7152; 433-7153
M. Paulino Street, San Pablo City SM CITY SAN PABLO G/F Descanzo Bldg., F. Timbol St. 709-1618; 704-2480
Area Code: (049) G/F SM City San Pablo National San Nicolas Poblacion, Fax No.: 704-1400
Tel. Nos.: 562-5481; 562-5482 Highway, Brgy. San Rafael, Concepcion, Tarlac
562-5483; 562-5484 San Pablo City, Laguna Area Code: (045) BACOLOD-LACSON
Fax No.: 562-5485 Area Code: (049) Tel. Nos.: 491-2987; 491-3028 Soliman Bldg., Lacson corner Luzurriaga
Tel. Nos.: 521-0071; 521-0072 Fax No.: 491-3113 Sts. Bacolod City, Negros Occidental
SANTIAGO CITY Fax No.: 521-0072 Area Code: (034)
Navarro Bldg., Maharlika Highway near TARLAC-PANIQUI Tel. No.: 474-2451
corner Bayaua St., Santiago City, Isabela SM CITY STA. ROSA Cedasco Building, M. H del Pilar St., Fax No.: 474-2451
Area Code: (078) G/F SM City Sta. Rosa, Bo. Tagapo, Poblacion, Paniqui, Tarlac
Tel. Nos.: 682-7024; 682-7025 Sta. Rosa, Laguna Area Code: (045) BACOLOD-LIBERTAD
682-7026 Area Code: (049) Tel. Nos.: 491-8465; 491-8464 Libertad Street, Bacolod City,
Fax No.: 305-2445 Tel. Nos.: 534-4640; 534-4813 Fax No.: 491-8465 Negros Occidental
Fax No.: 7901-1632 (Manila Line) Area Code: (034)
SM CITY BACOOR TARLAC-SAN RAFAEL Tel. Nos.: 435-1645; 435-1646
LGF SM City Bacoor, Tirona Highway SM CITY TELABASTAGAN CBC Bldg., Brgy. San Rafael, Fax No.: 435-1646
corner Aguinaldo Highway, SM City Telabastagan, Tarlac City, Tarlac
Bacoor, Cavite San Fernando City, Pampanga Area Code: (045) BACOLOD-MANDALAGAN
Area Code: (046) Area Code: (045) Tel. Nos.: 456-0150; 456-0121 Lacson Street, Mandalagan,
Tel. Nos.: 417-0572; 417-0746 Tel. No.: 403-9482 Fax No.: 456-0121 Bacolod City, Negros Occidental
417-0623; 417-0645 Fax No.: 403-9482 Area Code: (034)
Fax No.: 417-0583 THE DISTRICT IMUS Tel. Nos.: 441-0500; 441-0388
SOLANO G/F The District Imus, Anabu II, 709-0067
SM CITY CABANATUAN National Highway, Brgy. Quirino, Imus, Cavite Fax No.: 709-0067
UGF SM City Cabanatuan, Solano, Nueva Vizcaya Area Code: (046)
Maharlika Highway, Brgy. H. Concepcion Area Code: (078) Tel. Nos.: 416-1417; 416-4294 BACOLOD-NORTH DRIVE
Cabanatuan City, Nueva Ecija Tel. Nos.: 808-0371; 326-6561 Fax No.: 416-4212 Anesa Bldg., B.S. Aquino Drive,
Area Code: (044) Fax No.: 326-6561 Bacolod City
Tel. Nos.: 958-1916; 486-5501 TRECE MARTIRES Area Code: (034)
Fax No.: 958-1916 SORSOGON G/F Waltermart, Governor’s Drive corner Tel. Nos.: 435-0063 to 65; 709-1658
CBC Bldg., Ramon Magsaysay Ave., City Hall Road, Brgy. San Agustin, Fax No.: 435-0064
SM CITY CLARK Sorsogon City, Sorsogon Trece Martires City, Cavite
G/F (Units 172-173) SM City Clark, Area Code: (056) Area Code: (046) BAYBAY
M. Roxas St., CSEZ, Angeles City, Tel. Nos.: 211-1610; 421-5105 Tel. Nos.: 460-4897; 460-4898 Magsaysay Avenue, Baybay, Leyte
Pampanga Fax No.: 8429-1124 (Manila Line) 460-4899 Area Code: (053)
Area Code: (045) Fax No.: 460-4898 Tel. Nos.: 335-2899; 335-2898
Tel. Nos.: 499-0252; 499-0253 SUBIC BAY FREEPORT ZONE 563-9228
499-0254 CBC Bldg., Subic Bay Gateway Park, TUGUEGARAO CITY Fax No.: 563-9228
Fax No.: 499-0254 Rizal Highway, Subic Bay Freeport Zone A. Bonifacio Street,
Area Code: (047) Tuguegarao, Cagayan BORONGAN
SM CITY DASMARIÑAS Tel. Nos.: 252-1568; 252-1575 Area Code: (078) Balud II, Poblacion, Borongan,
LGF SM City Dasmariñas, Governor’s 252-1591 Tel. Nos.: 844-0175; 844-0831 Eastern Samar
Drive, Pala-pala, Dasmariñas, Cavite Fax No.: 252-1575 846-1709 Area Code: (055)
Area Code: (046) Fax No.: 844-0836 Tel. Nos.: 560-9948; 560-9938
Tel. Nos.: 424-1134 TABACO CITY 261-5888
Fax No.: 424-1133 Ziga Ave. corner Berces Street, TUGUEGARAO-BALZAIN Fax No.: 560 9938
Tabaco City, Albay Balzain Highway, Tuguegarao City,
SM CITY LIPA Area Code: (052) Cagayan CALBAYOG CITY
G/F (Units 1111-1113) SM City Lipa, Tel. Nos.: 487-7150; 830-4178 Area Code: (078) Cajurao cor. Gomez Sts., Balud,
Ayala Highway, Brgy. Maraouy, Lipa City, Fax No.: 429-1811 Tel. Nos.: 396-2207; 396-2208 Calbayog Dist., Calbayog City, Samar
Batangas Fax No.: 396-2207 Area Code: (055)
Area Code: (043) TAGAYTAY CITY Tel. Nos.: 209-1358; 533-8842
Tel. Nos.: 784-0212; 784-0213 Foggy Heights Subdivision, VIGAN CITY Fax No.: 533-8842
Fax No.: 784-0212 E. Aguinaldo Highway, Tagaytay City, Burgos Street near corner Rizal Street,
Cavite Vigan City, Ilocos Sur CATARMAN
SM CITY NAGA Area Code: (046) Area Code: (077) Cor. Rizal & Quirino Sts., Jose P.
SM City Naga, CBD II, Brgy. Triangulo Tel. Nos.: 483-0609; 483-0608 Tel. Nos.: 722-6968, 674-2272 Rizal St., Catarman, Northern, Samar
Naga City Fax No.: 483-0609 Fax No.: 722-6948 Area Code: (055)
Area Code: (054) Tel. Nos.: 251-8802; 251-8821
Tel. Nos.: 472-1366; 472-1367 TALAVERA VIRAC 500-9921
Fax No.: 8250-8183 (Manila Line) CBC Bldg., Marcos District, Gogon, Virac, Catanduanes Fax No.: 500-9921
Talavera, Nueva Ecija Area Code: (052)
SM CITY OLONGAPO CENTRAL Area Code: (044) Tel. Nos.: 811-4321; 811-4322 CATBALOGAN
formerly SM City Olongapo Branch Tel. Nos.: 940-2620; 940-2621 Fax No.: 811-4321 CBC Bldg., Del Rosario St.
G/F SM City Olongapo Central, Fax No.: 940-2620 cor. Taft Avenue, Catbalogan City, Samar
East Tapinac, Olongapo City, Zambales ZAMBALES-BOTOLAN Area Code: (055)
Area Code: (047) TARLAC National Highway, Brgy. Batonlapoc Tel. Nos.: 251-2897; 251-2898
Tel. Nos.: 602-0039; 602-0040 CBC Bldg., Panganiban near corner Botolan, Zambales 543-8121; 543-8279
Fax No.: 602-0038 F. Tanedo Street, Tarlac City, Tarlac Area Code: (047) Fax No.: 543-8279
Area Code: (045) Tel. Nos.: 811-1322; 811-1372
Tel. Nos.: 982-7771; 982-7772 Fax No.: 811-1322
982-7773; 982-7774
982-7775
Fax No.: 982-7772

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 China Bank Branches
CEBU-AYALA CEBU-IT PARK CEBU-NAGA ILOILO-MANDURRIAO
Unit 101 G/F Insular Life Cebu Business G/F The Link, Cebu IT Park, Apas, Leah’s Square, National South Highway, Benigno Aquino Ave., Brgy. San Rafael,
Center, Mindanao Ave. cor. Biliran Road, Cebu City, Cebu East Poblacion, Naga City, Cebu Mandurriao, Iloilo City, Iloilo
Cebu Business Park, Cebu City Area Code: (032) Area Code: (032) Area Code: (033)
Area Code: (032) Tel. Nos.: 266-2559; 262-0982 Tel. Nos.: 238-7623; 489-8218 Tel. Nos.: 333-3988; 333-4088
Tel. Nos.: 262-1839; 260-6524 Fax No.: 266-2559 Fax No.: 489-8218 Fax No.: 501-6078
Fax No.: 260-6524
CEBU-LAHUG CEBU-SM CITY ILOILO-RIZAL
CEBU-BANAWA JY Square Mall, No. 1 Salinas Dr., Upper G/F, SM City Cebu, Juan Luna CBC Bldg., Rizal cor. Gomez Streets,
G/F The J Block, Duterte St., Banawa, Lahug, Cebu City cor. A. Soriano Avenue, Cebu City Brgy. Ortiz, Iloilo City
Guadalupe, Cebu City, Cebu Area Code: (032) Area Code: (032) Area Code: (033)
Area Code: (032) Tel. Nos.: 417-2122; 233-0977 Tel. Nos.: 232-0754; 232-0755 Tel. Nos.: 336-0947; 338-2136
Tel. Nos.: 340-9561; 416-3827 234-2062 231-9140; 412-9699 509-8838
Fax No.: 416-3827 Fax No.: 234-2062 Fax No.: 232-1448 Fax No.: 338-2144

CEBU-BANILAD CEBU-LAPU LAPU PUSOK CEBU-SM SEASIDE CITY KALIBO

CBC Bldg., AS Fortuna St., G/F Goldberry Suites, President Quezon LGF SM Seaside City Cebu, South Road Waldolf Garcia Building,
Banilad, Cebu City National Highway, Pusok, Lapu-Lapu City Properties, 6000, Cebu City, Cebu Osmeña Avenue, Kalibo, Aklan
Area Code: (032) Area Code: (032) Area Code: (032) Area Code: (036)
Tel. Nos.: 346-5870; 346-5881 Tel. Nos.: 340-2098; 494-0631 Tel. Nos.: 262-1772 Tel. Nos.: 500-8088; 500-8188
416-1001 340-2099 Fax No.: 262-1772 268-2988
Fax No.: 344-0087 Fax No.: 340-2098; 494-0631 Fax No.: 500-8188
CEBU-SUBANGDAKU
CEBU-BASAK-SAN NICOLAS CEBU-LAPU LAPU CENTRO G/F A.D. Gothong I.T. Center, MAASIN CITY
N. Bacalso Ave., Basak San Nicolas, G.Y dela Serna St., Opon, Poblacion, Subangdaku, Mandaue City, Cebu G/F SJC Bldg., Tomas Oppus St.,
Cebu City, Cebu Lapu Lapu City, Cebu Area Code: (032) Brgy. Tunga-Tunga, Maasin City,
Area Code: (032) Area Code: (032) Tel. Nos.: 344-6561; 422-3664 Southern Leyte
Tel. Nos.: 340-8113; 414-4742 Tel. Nos.: 231-3247; 493-5078 344-6621 Area Code: (053)
Fax No.: 414-4742 Fax No.: 231-3247 Fax No.: 344-6621 Tel. Nos.: 381-2287; 381-2288
570-8488
CEBU-BOGO CEBU-MAGALLANES (MAIN) CEBU- TALAMBAN Fax No.: 570-8488
Sim Building, P. Rodriguez Street, CBC Bldg., Magallanes corner Unit UG-7 Gaisano Grand Mall,
Bogo City, Cebu Jakosalem Sts., Cebu City Brgy. Talamban, Cebu City NEGROS OCC.-SAN CARLOS
Area Code: (032) Area Code: (032) Area Code: (032) Rizal corner Carmona Streets,
Tel. Nos.: 434-7119; 266-3251 Tel. Nos.: 255-0022; 255-0023 Tel. Nos.: 236-8944; 418-0796 San Carlos, Negros Occidental
Fax No.: 434-7119 255-0025; 255-0028 Fax No.: 236-8944 Area Code: (034)
253-0348;255-6093 Tel. Nos.: 312-5819; 729-3276
CEBU BUSINESS CENTER 255-0266; 412-1877 CEBU-TALISAY Fax No.: 729-3276
CBC Bldg., Samar Loop corner Panay Fax No.: 255-0026 CBC Bldg., 1055 Cebu South National
Road, Cebu Business Park, Cebu City Road, Bulacao, Talisay City, Cebu ORMOC CITY
Area Code: (032) CEBU-MANDAUE Area Code: (032) CBC Bldg., Real cor. Lopez Jaena Sts.,
Tel. Nos.: 239-3760; 239-3761 SV Cabahug Building, 155-B SB Cabahug Tel. Nos.: 272-3342; 272-3348 Ormoc City, Leyte
239-3762; 239-3763 Street, Brgy. Centro, Mandaue City, Cebu 491-8200 Area Code: (053)
239-3764 Area Code: (032) Fax No.: 272-3346 Tel. Nos.: 255-3651; 255-3652
Fax No.: 238-1438 Tel. Nos.: 346-5636; 346-5637 255-3653
346-2083; 344-4335 DUMAGUETE CITY Fax No.: 561-8348
CEBU-CARCAR 422-8188 CBC Bldg., Real Street
Dr. Jose Rizal St., Poblacion I, Fax No.: 346-2083 Dumaguete City, Negros Oriental PUERTO PRINCESA CITY
Carcar, Cebu Area Code: (035) Malvar Street near corner Valencia Street
Area Code: (032) CEBU-MANDAUE-CABANCALAN Tel. Nos.: 422-8058; 225-5442 Puerto Princesa City, Palawan
Tel. Nos.: 487-8103; 487-8209 M.L. Quezon St., Cabancalan, 225-5441; 225-4284 Area Code: (048)
266-7093 Mandaue City, Cebu 225-5460 Tel. Nos.: 434-9891; 434-9892
Fax No.: 487-8103 Area Code: (032) Fax No.: 422-5442 434-9893
Tel. Nos.: 421-1364; 505-9908 Fax No.: 434-9892
CEBU-CONSOLACION Fax No.: 421-1364 NEGROS OCC.-KABANKALAN
G/F SM City Consolacion, Brgy. Lamac, CBC Bldg., National Highway, ROXAS CITY
Consolacion, Cebu CEBU-MANDAUE-J CENTRE MALL Brgy. 1, Kabankalan, Negros Occidental 1063 Roxas Ave. cor. Bayot Drive,
Area Code: (032) LGF J Centre Mall, A.S Fortuna Ave., Area Code: (034) Roxas City, Capiz
Tel. Nos.: 260-0024; 260-0025 Mandaue City, Cebu Tel. Nos.: 471-3349; 471-3364 Area Code (036)
Fax No.: 423-9253 Area Code: (032) 471-3738 Tel. Nos.: 621-3203; 621-1780
Tel. Nos.: 520-2898; 421-1567 Fax No.: 471-3738 522-5775
CEBU-ESCARIO Fax No.: 520-2898 Fax No.: 621-3203
Units 3 & 5 Escario Central, ILOILO-IZNART
Escario Road, Cebu City CEBU-MANDAUE NORTH ROAD G/F John A. Tan Bldg., Iznart St., SILAY CITY
Area Code: (032) G/F Units G1-G3, Basak Commercial Iloilo City Rizal St., Silay City, Negros Occidental
Tel. Nos.: 416-5860; 520-9229 Building (Kel-2) Basak, Mandaue City Area Code: (033) Area Code: (034)
Fax No.: 520-9229 Area Code: (032) Tel. Nos.: 337-9477; 509-9868 Tel. Nos.: 714-6400; 495-5452
Tel. Nos.: 345-8861; 345-8862 300-0644 495-0480
CEBU-F. RAMOS 420-6767 Fax No.: 337-9566 Fax No.: 495-0480;495-0480
F. Ramos Street, Cebu City Fax No.: 420-6767
Area Code: (032) ILOILO-JARO TACLOBAN CITY
Tel. Nos.: 253-9463; 254-4867 CEBU-MANDAUE NRA CBC Bldg., E. Lopez St. Uytingkoc Building, Avenida Veteranos,
412-5858 G/F Bai Hotel Cebu Ouano Ave. Jaro, Iloilo City, Iloilo Tacloban City, Leyte
Fax No.: 253-9461 cor. Seno Blvd., North Reclamation Area, Area Code: (033) Area Code: (053)
Mandaue City, Cebu Tel. Nos.: 320-3738; 320-3791 Tel. Nos.: 325-7706; 325-7707
CEBU-GORORDO Area Code: (032) Fax No.: 503-2955 325-7708; 523-7700
No 424. Gorordo Ave., Bo. Camputhaw, Tel. No.: 272-6985 523-7800
Lahug District, Cebu City, Cebu Fax No.: 272-6985 ILOILO-MABINI Fax No.: 523-7706
Area Code: (032) A. Mabini Street, Iloilo City
Tel. Nos.: 414-0509; 239-8654 CEBU-MINGLANILLA Area Code: (033) TAGBILARAN CITY
Fax No.: 239-8654 Unit 9, Plaza Margarita Lipata, Tel. Nos.: 335-0295; 335-0370 G/F Melrose Bldg., Carlos P. Garcia
Minglanilla, Cebu 509-0599 Avenue, Tagbilaran City, Bohol
CEBU-GUADALUPE Area Code: (032) Fax No.: 335-0370 Area Code: (038)
CBC Building, M. Velez Street, Tel. Nos.: 239-7234; 490-6025 Tel. Nos.: 501-0688; 501-0677
cor. V. Rama Ave., Guadalupe, Cebu City Fax No.: 239-7235 411-2484
Area Code: (032) Fax No.: 501-0677
Tel. Nos.: 254-7964; 254-8495
254-1916
Fax No.: 416-5988

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MINDANAO DAVAO CITY-CALINAN DAVAO-TORIL OZAMIZ CITY
Davao-Bukidnon National Highway – McArthur Highway corner St. Peter Gomez corner Kaamino Streets,
BUTUAN CITY Riverside, Calinan Proper, Davao City Street, Crossing Bayabas, Toril, Ozamiz City
CBC Bldg., J.C. Aquino Avenue Area Code: (082) Davao City Area Code: (088)
Butuan City Tel. Nos.: 224-9229; 224-9135 Area Code: (082) Tel. Nos.: 521-2658; 521-2659
Area Code: (085) Fax No.: 224-9229 Tel. Nos.: 303-3068; 295-2334 521-2660
Tel. Nos.: 341-5159; 341-7445 295-2332 Fax No.: 521-2659
815-3454; 815-3455 DAVAO-INSULAR VILLAGE Fax No.: 295-2332
225-2081 Insular Village I, Km. 8, Lanang, PAGADIAN CITY
Fax No.: 815-3455 Davao City DIPOLOG CITY Marasigan Building, F.S. Pajares Avenue,
Area Code: (082) CBC Bldg., Gen Luna Pagadian City
SM CDO DOWNTOWN PREMIER Tel. Nos.: 300-1892; 234-7166 corner Gonzales Streets, Dipolog City Area Code: (062)
G/F SM CDO Downtown Premier, 234-7165 Area Code: (065) Tel. Nos.: 215-2781; 215-2782
Cagayan de Oro City Fax No.: 300-1892 Tel. Nos.: 212-6768; 212-6769 925-1116
Area Code: (088) 908-2008 Fax No.: 214-3877
Tel. Nos.: 857-2212; 857-3742 DAVAO-MA-A BRANCH Fax No.: 212-6769
859-1063; 859-1054 G/F Lapeña Building, Mac Arthur SURIGAO CITY
Fax No.: 857-2212 Highway, Matina, Davao City GEN. SANTOS CITY CBC Bldg., Amat St., Barrio Washington,
Area Code: (082) CBC Bldg., I. Santiago Blvd., Surigao City, Surigao del Norte
CAGAYAN DE ORO-CARMEN Tel. Nos.: 295-0472; 295-1072 Gen. Santos City Area Code: (086)
G/F GT Realty Building, Max Suniel St. Fax No.: 295-0472 Area Code: (083) Tel. Nos.: 826-3958; 826-3968
corner Yakal St., Carmen, Tel. Nos.: 553-1618; 552-8288 Fax No.: 826-3958
Cagayan de Oro City DAVAO-MATINA Fax No.: 553-2300
Area Code: (088) Km. 4 McArthur Highway, VALENCIA
Tel. Nos.: 2272-309; 2272-4372 Matina, Davao City GEN. SANTOS CITY-DADIANGAS A. Mabini Street, Valencia, Bukidnon
858-3902; 858-3903 Area Code: (082) M. Roxas Ave. corner Lapu-Lapu Street, Area Code: (088)
Fax No.: 858-3903; 2272-4372 Tel. Nos.: 297-4288; 297-4455 Brgy. Dadiangas East, Gen. Santos City, Tel. Nos.: 828-2048; 828-2049
297-5880; 297-5881 South Cotabato 222-2356; 222-2417
CAGAYAN DE ORO-DIVISORIA Fax No.: 297-5880 Area Code: (083) Fax No.: 828-2048
RN Abejuela St., South Divisoria, Tel. Nos.: 552-8576
Cagayan de Oro City DAVAO-MONTEVERDE Fax No.: 552-8290 ZAMBOANGA CITY
Area Code: (088) Doors 1 & 2, Sunbright Bldg., CBC Bldg., Gov. Lim Avenue
Tel. Nos.: 2272-2641; 857-5759 Monteverde Ave., Brgy. 27-C, Poblacion ILIGAN CITY corner Nuñez Street, Zamboanga City
Fax 857-4200 District, Davao City Lai Building, Quezon Avenue Extension Area Code: (062)
Area Code: (082) Pala-o, Iligan City Tel. Nos.: 991-2978; 991-2979
CAGAYAN DE ORO-LAPASAN Tel. Nos.: 225-3680; 225-3679 Area Code: (063) 991-1266
CBC Bldg., Claro M. Recto Avenue, Fax No.: 225-3680 Tel. Nos.: 221-5477; 221-5479 Fax No.: 991-1266
Lapasan, Cagayan de Oro City 492-3009; 221-3009
Area Code: (088) DAVAO-PANABO CITY Fax No.: 492-3010 ZAMBOANGA-GUIWAN
Tel. Nos.: 2272-2240; 2272-4540 PJ Realty, Barangay New Pandan, G/F Yang’s Tower, M.C. Lobregat National
2272-6242; 856-1325 Panabo City, Davao del Norte ILIGAN CITY-SOLANA DISTRICT Highway, Guiwan, Zamboanga City
856-1326 Area Code: (084) Andres Bonifacio Highway, Brgy. San Area Code: (062)
Fax Nos.: 856-1325; 856-1326 Tel. Nos.: 628-4057; 628-4065 Miguel, Iligan City, Lanao del Norte Tel. Nos.: 984-1751; 984-1754
Fax No.: 628-4053 Area Code: (063) Fax No.: 984-1751
CAGAYAN DE ORO-PUERTO Tel. Nos.: 224-7664; 224-7665
Luis A.S. Yap Building, Zone 6, DAVAO-RECTO Fax No.: 224-7664 ZAMBOANGA-SAN JOSE GUSU
Brgy. Puerto, Cagayan de Oro City, CBC Bldg., C.M. Recto Ave. Yubenco Supermarket, San Jose Gusu,
Misamis Oriental cor. J. Rizal St., Davao City KIDAPAWAN CITY Zamboanga City, Zamboanga del Sur
Area Code: (088) Area Code: (082) Datu Ingkal St., Brgy. Poblacion, Area Code: (062)
Tel. Nos.: 880-7183; 880-7185 Tel. Nos.: 221-4481; 221-7028 Kidapawan City Tel. Nos.: 995-6154; 955-6155
Fax No.: 880-7185 221-6021; 221-6921 Area Code: (064) Fax No.: 955-6154
221-4163; 226-3851 Tel. Nos.: 278-3509; 278-3510
CDO-GAISANO CITY MALL 226-2103 Fax No.: 278-3509
G/F Gaisano City Mall, C. M. Recto Fax No.: 221-8814
corner Corrales Extension, KORONADAL CITY
Cagayan de Oro City DAVAO-STA. ANA Gen. Santos Drive corner Aquino St.,
Area Code: (088) R. Magsaysay Avenue Koronadal City, South Cotabato
Tel. Nos.: 2274-5877; 2274-5880 corner F. Bangoy Street, Area Code: (083)
880-1051; 880-1052 Sta. Ana District, Davao City Tel. Nos.: 228-7838; 228-7839
Fax No.: 2274-5880 Area Code: (082) 520-1788
Tel. Nos.: 227-9501; 227-9551 Fax No.: 228-7839
COTABATO CITY 227-9601; 221-1054
No. 76 S.K. Pendatun Avenue, 221-1055; 221-6672 MALAYBALAY CITY
Cotabato City, Maguindanao Fax No.: 226-4902 Bethelda Building, Sayre Highway,
Area Code: (064) Malaybalay City, Bukidnon
Tel. Nos.: 421-4685; 421-4653 DAVAO-SM LANANG Area Code: (088)
Fax No.: 421-4686 G/F SM Lanang Premier, Tel. Nos.: 813-3372
J. P. Laurel Avenue, Davao City Fax No.: 813-3373
DAVAO-BAJADA Area Code: (082)
B.I. Zone Building, J.P. Laurel Ave., Tel. Nos.: 285-1064; 285-1053 MIDSAYAP
Bajada, Davao City Fax No.: 285-1520 CBC Bldg., Quezon Ave.,
Area Code: (082) Poblacion 2, Midsayap, Cotabato
Tel. Nos.: 221-0184; 221-0319 DAVAO-TAGUM Area Code: (064)
Fax No.: 221-0568 153 Pioneer Avenue, Tagum, Tel. No.: 229-9700
Davao del Norte Fax No.: 229-9750
DAVAO-BUHANGIN Area Code: (084)
Buhangin Road, Davao City Tel. Nos.: 655-6307; 655-6308
Area Code: (082) 400-2289; 400-2290
Tel. Nos.: 300-8335; 227-9764 Fax No.: 400-2289
221-5970
Fax No.: 221-5970

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 China Bank Business Offices
CONSUMER BANKING CENTERS
CBG Bacolod Center CBG Cagayan de Oro Center CBG Dagupan Center CBG Iloilo Center
China Bank - Bacolod Araneta China Bank Cagayan de Oro Divisoria China Bank - Dagupan-Perez China Bank - Iloilo-Rizal
2/F CBC Bldg., Araneta St. 2/F CBC Bldg. R.N. Abejuela St. Siapno Bldg., Perez Boulevard 2/F CBC Bldg., Rizal cor. Gomez Sts.
Bacolod City Divisoria, Cagayan de Oro City Dagupan City Brgy. Ortiz, Iloilo City
Tel. No.: (034) 435-0647 Tel. Nos.: (088) 859-1232 Tel. Nos.: (075) 522-8471 Tel. Nos.: (033) 336-7918
(034) 435-0250 (088) 856-2409 (075) 522-8472 (033) 503-2845
Fax No.: (034) 435-0647 Fax Nos.: (088) 856-2409 Fax No.: (075) 522-8472 (033) 336-7909
Email: ihsaplagio@chinabank.ph Email: rdmatela@chinabank.ph Email: mpmacaranas@chinabank.ph Fax No.: (033) 336-7918
Center Head: Ivy H. Saplagio Center Head: Rhea D. Matela (OIC) Center Head: Maricris P. Macaranas Email: mdcelajes@chinabank.ph
Center Head: Marvin D. Celajes
CBG Batangas Center CBG Cebu Center CBG Davao Center
China Bank - Batangas City China Bank - Cebu Business Park China Bank - Davao-Recto CBG Pampanga Center
3/F CBC Bldg., P. Burgos St. 2/F CBC Corporate Center, 2/F CBC Bldg., C.M. Recto China Bank - San Fernando
Batangas City Samar Loop cor. Panay Road cor. J. Rizal Sts., Davao City 2/F CBC Bldg., V. Tiomico St.
Tel. Nos.: (043) 723-7127 Cebu Business Park, Cebu City Tel. Nos.: (082) 226-2103 Sto. Rosario Poblacion, City of
723-4294 Tel. Nos.: (032) 416-1606 (082) 221-4163 San Fernando, Pampanga
Fax No.: (02) 8520-6161 (032) 346-4448 Fax No.: (082) 222-5021 Tel. Nos.: (045) 961-5344
Email: egricardo@chinabank.ph (032) 416-1915 Email: rcsanchez@chinabank.ph (045) 961-0467
Center Head: Evelyn G. Ricardo (032) 239-3733 Center Head: Renato C. Sanchez II Fax No.: (045) 961-8351
(OIC) Fax No.: (032) 346-4450 Email: cjdbautista@chinabank.ph
Email: khltan@chinabank.ph Center Head:
CBG Cabanatuan Center Center Head: Carlo Juan D. C. Bautista
China Bank - Cabanatuan, Maharlika Kinard Hutchinson L. Tan
2/F CBC Bldg., Brgy. Dicarma,
Maharlika Highway, Cabanatuan City,
Nueva Ecija
Tel. Nos.: (044) 600-1575; 4631063
Fax No.: (044) 464-0099
Email: ergatdula@chinabank.ph
Contact Person: Emilie R. Gatdula

WEALTH MANAGEMENT OFFICES

Makati Head Office Greenhills Office Mary Grace C. Tan Bacolod Office
15/F China Bank Bldg. 14 Ortigas Ave., Greenhills (02) 8352-3789 2/F CBC Bldg., Bacolod Araneta
8745 Paseo de Roxas cor. Villar Sts., San Juan, Metro Manila mgctan@chinabank.ph Lacson cor. San Sebastian Sts.
Makati City, Philippines Bacolod City
Ma. Victoria G. Pantaleon Quezon City Office
Angela D. Cruz (02) 8727-7884 82 West Ave., Quezon City Julie Rose A. Manuel
(02) 8885-5641 mvgpantaleon@chinabank.ph (034) 431-5549
adcruz@chinabank.ph Jaydee Cheng Tan jramanuel@chinabank.ph
Desiree Jade T. Go (02) 8426-6980 / jctan@chinabank.ph
Cesaré Edwin M. Garcia (02) 8727-7645 / djtgo@chinabank.ph Cebu Office
(02) 8812-5320 Ma. Luisa T. Uy CBC Bldg., Samar Loop
cemgarcia@chinabank.ph Francine Richelle C. Ong (02) 8441-4685 / mltuy@chinabank.ph cor. Panay Road, Cebu Business
(02) 8724-0413 Park, Cebu City
Therese G. Escolin frcong@chinabank.ph Alabang Office
(02) 8885-5693 2/F Unit D CBC Bldg., Acacia Ave. Eleanor D. Rosales
tgescolin@chinabank.ph Binondo Office Madrigal Business Park, (032) 415-5881
6/F China Bank Bldg., Dasmariñas Ayala Alabang, Muntinlupa City (032) 239-3740 up to 44
Grace C. Santos cor. Juan Luna, Binondo, Manila edrosales@chinabank.ph
(02) 8885-5697 Claire L. Ramirez
gcsantos@chinabank.ph Irene C. Tanlimco (02) 8659-2463 Geraldine U. Go
(02) 8241-1452 clramirez@chinabank.ph (032) 239-3741 / gugo@chinabank.ph
Eric Von D. Baviera ictanlimco@chinabank.ph
(02) 8885-5688 Samantha Rose U. Dee Davao Office
evdbaviera@chinabank.ph Genelin U. Yu (02) 8659-2464 Km. 4 MacArthur Highway
(02) 8247-8341 / guyu@chinabank.ph srudee@chinabank.ph Matina, Davao City
Karen W. Tua
(02) 8885-5643 Kalookan Office San Fernando Office Mc Queen Benigno-Jamora
kwtua@chinabank.ph 167 Rizal Ave. Extension 2/F V. Tiomico St., San Fernando City, (082) 297-6268
Kalookan City Pampanga mqbjamora@chinabank.ph
Yvette O. Chua (082) 297-2335
(02) 8885-5691 Jennifer Y. Macariola Ma. Cristina D. Puno
yochua@chinabank.ph (02) 8366-8669 (045) 961-0486
jymacariola@chinabank.ph mcdpuno@chinabank.ph
Joyce Y. Tan
(02) 8672-9640 Sheryl Ann C. Hokia
jytan@chinabank.ph (02) 8352-3789
sachokia@chinabank.ph

118 C H I N A B A N K I N G C O R P O R AT I O N
China Bank Savings Branches
METRO MANILA AND RIZAL BACLARAN ESPAÑA-SUNMALL LAS PIÑAS-ALMANZA UNO
3751 Quirino Ave., cor. Sta. Rita St. G/F, Sun Mall Residences Alabang - Zapote Road
BUENDIA Baclaran, Parañaque City España Boulevard cor. Mayon St. Almanza Uno, Las Piñas City
CBS Bldg. Tel. Nos.: 8816-1956; 7975-2172 Brgy. Sta. Teresita, Quezon City Tel. Nos.: (02) 8551-4024; 8551-4724
314 Sen. Gil Puyat Ave., Makati City Tel. No.: (02) 8244-2477 7966-9001
Tel. Nos.: (02) 8884-7645; 8812-9359 BANAWE Mobile No.:0917-817-3526
Trunkline: (02) 8884-7600 247-249 Banawe St. FELIX HUERTAS-JT CENTRALE
locals 73901, 73902 Sta. Mesa Heights, Brgy. Lourdes #1686 V. Fugoso St. MAKATI-CHINO ROCES
Quezon City cor. Felix Huertas Sta. Cruz, Manila Graceland Plaza
ACACIA ESTATES-SAVEMORE Tel. No.: (02) 8256-4941 Tel. No.: (02) 8247-3177 2176 Chino Roces Ave.
Acacia Taguig Town Center Pio del Pilar, Makati City
Acacia Estates, Ususan, Taguig City BANGKAL FILINVEST CORPORATE CITY Tel. Nos.: 8831-0477; 7964-1322
Tel. Nos.: (02) 8633-5472; 8633-3245 Amara Bldg. BC Group Bldg., East Asia Drive Mobile No.:0917 510-6078
1661 Evangelista St. near cor. Commerce Ave.
ADRIATICO-HYPERMARKET Bangkal, Makati City Filinvest Corporate City MAKATI-JP RIZAL
M.H. Del Pilar, Adriatico Tel. Nos.: (02) 8621-3459 Alabang, Muntinlupa City 882 J.P. Rizal St.
Malate, Manila 8621-3461 Tel. No.: (02) 8511-1145 Poblacion, Makati City
Tel. No.: (02) 8525-6286 Mobile No.:0917 804-6443 Tel. No.: (02) 8890-1027
BINONDO-JUAN LUNA Mobile No.:0917 510-5919
ALABANG HILLS 694-696 Juan Luna St. FTI– TAGUIG HYPERMARKET
Alabang Commercial Citi Arcade Binondo, Manila DBP Ave., Food Terminal Incorporated MALABON-SAVEMORE
Don Jesus Boulevard Tel. No.: (02) 8254-7337 Western Bicutan, Taguig City Francis Market, Governor Pascual
Alabang, Muntinlupa City Tel. Nos.: (02) 8834-0408; 7507-4090 cor. M.H. Del Pilar St.,Tinajeros
Tel. Nos.: (02) 8828-4854 BLUMENTRITT Malabon City
8403-2801 1677 Blumentritt St. G. ARANETA AVE. Tel. No.: (02) 8931-6323
near Oroquieta St., Sta. Cruz, Manila 195 G. Araneta Ave.
AMANG RODRIGUEZ-SAVEMORE Tel. Nos.: (02) 7968-4759; 8562-0953 Quezon City MANDALUYONG
Amang Rodriguez Ave. Tel No.: (02) 8711-7822 Paterno’s Bldg.
cor. Evangelista St. BONI AVE. 572 New Panaderos St.
Santolan, Pasig City Raymond Tower Boni GIL PUYAT-BAUTISTA Brgy.Pag-asa, Mandaluyong City
Tel. No.: (02) 8645-4710; 7964-1323 615 Boni Ave. Plainview Lot 25 Blk 74 Bautista St. Tel. Nos.: (02) 7238-3745, 7238-3744
Mobile No.:0917 510-5962 Mandaluyong City cor. Sen. Gil Puyat Ave., Makati
Tel. No.: (02) 8636-5072 Tel. Nos.: (02) 8838-2312; 7354-5923 MANDALUYONG-SHAW
AMORANTO AVE. Mobile No.:0917 849-7434 Mobile No.:0917 849-6738 BOULEVARD
Unit 101 R Place Bldg. 500 Shaw Tower, 500 Shaw Boulevard
255 N.S Amoranto Sr. Ave. COMMONWEALTH AVE. GREENHILLS-ORTIGAS AVE. Mandaluyong City
Quezon City JocFer Bldg. G/F, VAG Bldg., Ortigas Ave. Tel. Nos.: (02) 8941-9412; 8941-9231
Tel. Nos.: (02) 8251-6592; 8251-6594 Commonwealth Ave. Greenhills, San Juan City
Brgy. Holy Spirit, Quezon City Tel. Nos.: (02) 8721-0105; 8724-7528 MANILA-STA.ANA SAVEMORE
ANGONO Tel. Nos.: (02) 7957-0559; 8282-5946 Savemore Pedro Gil St.
Manila East Road cor. Don Benito St. 8282-5975; 8988-9555 GREENHILLS-WILSON Sta. Ana, Manila
Brgy. San Roque, Angono Rizal loc. 4857 219 Wilson St., Greenhills Tel. Nos.: (02) 8523-8574; 7987-4975
Tel. No.: (02) 8651-1782 Mobile No.:0917 521-3469 San Juan City Mobile No.:0917 814-0390
Fax No: (02) 8651-1779 Tel .Nos.: (02) 7748-7625; 8584-5946
CUBAO MARIKINA
ANONAS-SAVEMORE Fernandina 88 Condominium KALOOKAN 33 Bayan-Bayanan Ave.
Maamo St., Road Lot 30 222 P. Tuazon Boulevard Augusto Bldg., Rizal Ave. Brgy. Concepcion 1, Marikina City
V. Luna St. and Anonas Extension Araneta Center, Cubao, Quezon City Grace Park, Kalookan City Tel. Nos.: (02) 8477-2445; 7907-2418
Sikatuna, Quezon City Tel. Nos.: (02) 8913-5209; 8913-4903 Tel. Nos.: (02) 8365-7593; 8363-2752
Tel. No.: (02) 8351-4928 MARIKINA-GIL FERNANDO AVE.
Mobile No.:0917 863-6157 DEL MONTE KALOOKAN-MABINI CTP Bldg.
392 Del Monte Ave. AJ Bldg. Gil Fernando Ave., Marikina City
ANTIPOLO Brgy. Sienna, Quezon City 353 A. Mabini St., Kalookan City Tel. Nos.: (02) 8681-2810; 8645-8169
EMS Bldg. , M.L. Quezon Tel. No.: (02) 8741-2447 Tel.No.: (02) 8961-2628
cor. F. Dimailig St., Brgy. San Roque Fax No.: 8741-8285 MUÑOZ JACKMAN
Antipolo City, Rizal KATIPUNAN AVE. Upper Ground Floor, Jackman Building
Tel. No.: (02) 8697-1066 DIVISORIA One Burgundy Condominium Jackman Plaza, EDSA – Muñoz
Fax No.: (02) 8697-0224 Bank Space Unit U01 Katipunan Ave., Loyola Heights Quezon City
Dragon 8 Shopping Center Quezon City Tel. No.: (02) 8442-4829
ARANETA CENTER C.O.D.- 3/Flr., C.M Recto Avenue Tel. Nos.: (02) 7211-7882 Mobile No.:0917 800-5128
SAVEMORE cor. Dagupan St., Divisoria, Manila Fax No.: (02) 8288-4360
LG Savemore Market Tel. Nos.: (02) 7616-1146; 8247-3300 Mobile No.:0917 628-3318 NEPA-Q MART-SAVEMORE
Gen. Romulo St., Araneta Center G/F, 770 Saint Rose Bldg.
Cubao, Quezon City E. RODRIGUEZ SR.-HEMADY LAGRO EDSA and K-G St.
Tel. No.: (02) 8921-3149; 7502-1437 G/F, Hemady Square, E. Rodriguez G/F, Bonaza Bldg. West Kamias, Quezon City
Mobile No.:0917 809-9670 Ave. cor. Doña Hemady St. Quirino Highway, Greater Lagro Tel. No.: (02) 8351-4884
New Manila, Quezon City Novaliches, Quezon City Mobile No.:0917 863-6069
AYALA AVE. Tel. No.: (02) 8531-9676 Tel. Nos.: (02) 8936-4988; 8461-7214
VGP Center Mobile No.:0917 808-5214 NINOY AQUINO AVE.
6772 Ayala Ave., Makati City Skyfreight Bldg.,
Tel. Nos.: (02) 8864-5017; 8864-5011 G/F Ninoy Aquino Ave.
8988-9555 loc 8100, 8101, cor. Pascor Drive, Parañaque City
8103, 8104 Tel. Nos.: (02) 8843-2447; 7239-0574

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 China Bank Savings Branches
ORTIGAS CENTER PATEROS-ALMEDA TAYTAY BALIBAGO
Hanston Square , San Miguel Ave. 120 M. Almeda St. C. Gonzaga Bldg. II JEV Bldg., MacArthur Highway
Ortigas Center, Pasig City Pateros City Manila East Road, Taytay, Rizal Balibago, Angeles City
Tel. Nos.: (02) 8637-9778; 8477-3439 Tel. Nos.: (02) 8641-6768; 8641-6760 Tel. Nos.: (02) 8650-3367; 7623-6113 Tel. Nos.: (045) 892-3325; 332-1030
Mobile No.:0917 578-6978
PARAÑAQUE-BETTER LIVING PEDRO GIL BALIUAG
90 Doña Soledad Ave. LKE Bldg. TAYUMAN Baliuag No. 58 Plaza Naning Street,
Better Living Subdivision Pedro Gil St. cor. 1925-1929 Rizal Ave. Baliuag, Bulacan
Bicutan, Parañaque City Pasaje Rosario, Paco, Manila near cor. Tayuman St. Tel. Nos.: (044) 766-2014; 673-1338
Tel. Nos.: (02) 8831 -8507 Tel. No.: (02) 8521-4056 Sta. Cruz, Manila (02) 8884-7600 loc. 4312
Tel. Nos.: (02) 8230-3091; 8325-5078
PARAÑAQUE-BF HOMES PLAZA STA. CRUZ CABANATUAN-BAYAN
284 Aguirre Ave. MBI Bldg. TIMOG Duran Bldg.
B.F. Homes, Parañaque City Plaza Sta. Cruz, Sta. Cruz, Manila Jenkinsen Tower Condominium Burgos Ave., Cabanatuan City
Tel. Nos.: (02) 8553-5412; 8553-5414 Tel. No.: (02) 8734-0534 80 Timog Ave., Quezon City Tel. Nos.: (044) 600-2888; 463-0441
Tel. Nos.: (02) 8371-8303; 8371-8305 (02) 8884-7600 loc. 432
PARAÑAQUE-JAKA PLAZA QUEZON AVE.-PALIGSAHAN
Jaka Plaza Center 1184-A Ben-Lor Bldg. TWO E-COM DAGUPAN
Dr. A. Santos Ave. (Sucat Road) Brgy. Paligsahan, Quezon City Two E-Com Center Tower B Lyceum-North Western University
Brgy. San Isidro, Parañaque City Tel. Nos.: (02) 8376-4548; 8376-4546 Ocean Drive cor. Bayshore Drive Ground Floor, Tapuac District
Tel. No.: (02) 8820-6093 Mall of Asia Complex, Pasay City Dagupan City
Fax No.: (02) 8820-9061 QUEZON AVE. Tel. Nos.: (02) 8802-3068; 7587-4753 Tel. Nos.: (075) 523-3637
GJ Bldg., 385 Quezon Ave. Mobile No.:0917 506-8303 (02) 8988-9555 loc. 4802
PARAÑAQUE-LA HUERTA West Triangle, Quezon City
1070 Quirino Ave. Tel. No.: (02) 8332-2638 UN AVE. DAU
La Huerta, Parañaque City Mobile No.:0917 538-2423 552 United Nations Ave. MacArthur Highway
Tel.Nos.: (02) 8893-1226 Ermita, Manila Dau, Mabalacat, Pampanga
Mobile No.:0917 578-5058 QUIAPO-ECHAGUE Tel. Nos.: (02) 8400-5467; 8400-5468 Tel. Nos.: (045) 892-2216; 892-2215
Carlos Palanca cor. P. Gomez St. (02) 8988-9555 loc. 4868
PARAÑAQUE-MOONWALK Echague, Quiapo, Manila VALENZUELA-MARULAS
Kassel Residence Tel. Nos.: (02) 8714-2396 92 J Ong Juanco Bldg. DOLORES
E. Rodriguez Ave. MacArthur Highway, Marulas STCI Bldg., MacArthur Highway
Moonwalk, Parañaque City QUIAPO-QUEZON BOULEVARD Valenzuela City Brgy. San Agustin
Tel. Nos.: (02) 8664-1923, 7957-2339 416 Quezon Boulevard Tel. Nos.: (02) 8291-6541; 8709-4641 City of San Fernando, Pampanga
Quiapo, Manila Tel. No.: (045) 649-3150
PASAY-LIBERTAD Tel. No.: (02) 8247-3297 VISAYAS AVE. Fax No.: (045) 649-3724
533 Cementina St. Wilcon City Center Mall,
Libertad, Pasay City RADA Upper Ground Floor GUAGUA
Tel. Nos.: 7907-4246; 8541-1697 HRC Center, 104 Rada St. Visayas Ave. , Quezon City Plaza Burgos, Guagua, Pampanga
Mobile No.:0917 808-0695 Legaspi Village, Makati City Tel. No.: (02) 8990-6543 Tel. Nos.: (045) 901-0641; 901-0640
Tel. No.: (02) 8810-9369 901-0966
PASIG-CANIOGAN Fax No.: (02) 8810-9370
KSN Bldg., C. Raymundo Ave. NORTH LUZON GUIGUINTO-RIS
Caniogan, Pasig City ROOSEVELT RIS-5 Industrial Complex
Tel. No.: (02) 7957-0817 342 Roosevelt Ave., Quezon City ANGELES-RIZAL 68 Mercado St.
Mobile No.:0917 520-6966 Tel Nos.: (02) 7957-0796; 8663-7563 639 Rizal St., Angeles City Tabe, Guiguinto, Bulacan
Tel. Nos.: (045) 888-4971; 625-9722 Tel. No.: (044) 235-7630
PASIG MUTYA SAN JUAN CITY Mobile No.:0917 848-5249
Richcrest Bldg., Madison Square ARAYAT
Caruncho cor. Market Ave. 264 N. Domingo St. Cacutud, Arayat, Pampanga LA UNION
San Nicolas, Pasig City Brgy. Pasadena, San Juan City Tel. Nos.: (045) 409-9559; 885-2390 A.G. Zambrano Bldg.
Tel. No.: (02) 8642-2870 Tel. Nos.: (02) 7507-4147; 8724-7528 Quezon Ave.
Fax No.: (02) 8640-7085 Mobile No.:0917 561-5639 BAGUIO-SESSION San Fernando City , La Union
B 108 Lopez Bldg., Session Road Tel. No.: (072) 700-3800
PASIG-PADRE BURGOS SOUTH TRIANGLE cor. Assumption Road, Baguio City Fax No.: (072) 242-0414
114 Padre Burgos St. Sunnymede IT Center Tel. Nos.: (074) 446-3993; 446-3994
Kapasigan, Pasig City Ground Floor, Quezon Avenue Mobile No.:0917 868-3506 LAOAG CITY
Tel. Nos.: (02) 8650-3361 South Triangle, San Juan City LC Square Bldg.
Mobile No.:0917 574-7874 Tel. No.: (02) 7959-4515 BALAGTAS J.P. Rizal cor. M.V. Farinas Sts.
Mobile No.:0917 843-1722 Ultra Mega Supermarket Laoag City, Ilocos Norte
PASO DE BLAS MacArthur Highway Tel. No.: (077) 600-1008
Andoks Bldg., 629 Gen. Luis St. STA. MESA Burol 1st Balagtas, Bulacan 600-1009
Malinta Interchange – NLEX 4128 Ramon Magsaysay Boulevard Tel.Nos. (044) 693-1849
Paso de Blas, Valenzuela City Sta. Mesa Manila (02) 8884-7600 loc. 4316 LINGAYEN
Tel.No.: (02) 8984-8258 Tel. No.: (02) 7507-6515 The Hub - Lingayen Bldg.
8252-3286 BALANGA-D.M. BANZON Poblacion, Lingayen, Pangasinan
PATEROS D.M. Banzon St. Mobile No.:0917 848-6063
500 Elisco Road TANDANG SORA Balanga City, Bataan
Sto. Rosario, Pateros City Cecile Ville Bldg. III Tel. Nos.: (047) 237-3667; 237-3666 MACABEBE
Tel. Nos.: (02) 8641-9556; 8655-2349 670 Tandang Sora Ave. Poblacion, Macabebe, Pampanga
cor. General Ave., Tandang Sora Tel. No.: (045) 435-5507
Quezon City
Mobile No.:0917 801-7585

120 C H I N A B A N K I N G C O R P O R AT I O N
MALOLOS SAN JOSE DEL MONTE VIGAN LAGUNA-STA. CRUZ
Canlapan St., Sto. Rosario Giron Bldg. G/F, Plaza Maestro Convention Center E & E Bldg., Pedro Guevarra Ave.
City of Malolos, Bulacan Gov. Halili Ave., Tungkong Mangga Florentino St., Barangay I, Vigan City Sta. Cruz, Laguna
Tel. No.: (044) 794-2793 City of San Jose del Monte, Bulacan Ilocos Sur Tel. Nos.: (049) 501-3084
Mobile No.:0917 835-4684 Tel. Nos.: (044) 233-6501 Tel. Nos.: (077) 674-0300 (02) 8988-9555 loc. 4817
(02) 8988-9555 loc. 4001 884-7600 local 4359 Mobile No.:0917 561-5715
MALOLOS-CATMON Mobile No.:0917 835-4675
Paseo del Rosario LEGAZPI CITY
Catmon, City of Malolos, Bulacan SAN MIGUEL SOUTH LUZON F. Imperial St., Barangay Bitano
Tel. No.: (044) 791-2461 Norberto St., San Miguel, Bulacan Legazpi City, Albay
Fax No.: (044) 662-7819 Tel. Nos.: (044) 764-0162 BACOOR-MOLINO Tel. Nos.: (052) 225-5155
(02) 8884-7600 loc. 4311 Avon Bldg., 817 Molino Road Mobile No.:0917-836-0093
MEYCAUAYAN Fax No.: (044) 764-0826 Molino III, City of Bacoor, Cavite
Mancon Bldg. Tel. Nos.: (046) 431-9907; 235-7542 LIPA-CM RECTO
MacArthur Highway, Calvario SAN NARCISO (02) 8988-9555 loc. 4878 China Bank Savings Bldg.
Meycauayan, Bulacan Brgy. Libertad, San Narciso, Zambales Mobile No.:0917 561-5883 C.M Recto Ave., Lipa City
Tel. Nos.: (044) 884-0099; 228-2416 Tel. No.: (047) 913-2245; 913-2288 Tel. Nos.: (043) 75-1414; 756-1022
(02) 8884-7600 loc. 4326 BACOOR-TALABA (02) 8884-7600 loc. 4325
SAN RAFAEL Coastal Road cor. Aguinaldo Highway,
MOUNT CARMEL Cagayan Valley Road Brgy.Talaba, City of Bacoor, Cavite LOS BAÑOS-CROSSING
Km. 78 MacArthur Highway cor. Cruz na Daan, San Rafael, Bulacan Tel. Nos.: (046) 417-5930; 417-5940 Lopez Ave., Batong Malake
Brgy.Saguin, City of San Fernando Tel. Nos.: (044) 815-8915; 913-7629 (02) 8884-7600 loc. 4369 Los Baños, Laguna
Pampanga (02) 8988-9555 loc. 4799 Tel. Nos.: (049) 536-2596; 536-0549
Tel.Nos.: (045) 435-6055 BATANGAS-P. BURGOS (02) 8884-7600 loc. 4375
(02) 8884-7600 loc. 4330 SANTIAGO-VICTORY NORTE No. 4 Burgos St., Batangas City
JECO Bldg., Maharlika Highway Tel. Nos.: (043) 723-1510; 723-7652 LUCENA
PLARIDEL cor. Quezon St., Victory Norte (02) 8884-7600 loc. 4324 Merchan cor. Evangelista St.
0226 Cagayan Valley Road Santiago City, Isabela Lucena City
Banga 1st, Plaridel, Bulacan Tel Nos.: (078) 305-0260; 305-0252 BIÑAN Tel. Nos.: (042) 660-6964
Tel. Nos.: (044) 795-0105; 670-1067 (02) 8884-7600 loc. 4374 Nepa Highway (02) 8884-7600 loc. 4347
San Vicente,Biñan City, Laguna Fax No.: (042) 710-6964
OLONGAPO STA. ANA Tel.Nos.: (049) 511-3638
City View Hotel Bldg. Poblacion, Sta. Ana, Pampanga (02) 8884-7600 loc. 4327 NAGA
25 Magsaysay Drive Tel.Nos.: (045) 409-0335; 409-9818 Fax No.: 8429-4878 RL Bldg., Panganiban St.
New Asinan, Olongapo City (02) 8988-9555 loc. 4793 Lerma, Naga City, Camarines Sur
Tel. No.: (047) 222-1891 CALAMBA Tel.Nos.: (054) 472- 5424;472-1947
Mobile No.:0917 807-8509 STA. MARIA HK Bldg. II, National Highway (02) 8884-7600 loc. 4373
Gen. Luna cor. De Leon St. Brgy. Halang, Calamba City, Laguna
ORANI Poblacion, Sta. Maria, Bulacan Tel.Nos.: (049) 306-0238; 306-0234 SAN PABLO-RIZAL AVE.
National Road Tel. Nos.: (044) 288-2453 (02) 8988-9555 China Bank Savings Bldg.
Balut, Orani, Bataan (02) 8884-7600 loc. 4319 loc. 4844 and 4845 Rizal Ave. cor. A. Fule St. (former
Tel. Nos.: (047) 638-1282 Fax No.: (044) 641-1150 Lopez Jaena) San Pablo City
(02) 8988-9555 loc. 4871 CAVITE CITY Tel. No.: (049) 562-0697
STA. RITA 485 P. Burgos St., Barangay 34 (02) 8884-7600 loc. 4322
PORAC San Vicente, Sta. Rita, Pampanga Caridad, Cavite City, Cavite
Cangatba, Porac, Pampanga Tel. Nos.: (045) 900-0658 Tel. Nos.: (046) 417-3102 SAN PEDRO
Tel. No.: (045) 329-3188 (02) 8988-9555 loc. 4791 (02) 8988-9555 loc. 4879 Gen-Ber Bldg., National Highway
Mobile No.:0917 870-3305 Mobile No: 0917 561-5780 Landayan, San Pedro City, Laguna
SUBIC Tel. Nos.: (02) 8847-0585; 8869-8821
SAN FERNANDO Baraca,Subic, Zambales DARAGA-ALBAY
Khy Trading Bldg. Tel. Nos.: (047) 232-6104; 232-6105 N & H Bldg., Rizal St. STA. ROSA
San Fernando – Gapan Road (02) 8988-9555 loc. 4852 Brgy. San Roque, Daraga, Albay Sta. Rosa-Tagaytay Highway
City of San Fernando, Pampanga Tel. Nos.: (052) 483-0706; Sta. Rosa City, Laguna
Tel. Nos.: (045) 961-1415 TARLAC-MACARTHUR (02) 8988-9555 loc. 4822 Tel.Nos.: (049) 502-9134
286-6811 MacArthur Highway (02) 8988-9555 loc. 4872
(02) 8988-9555 loc. 4812 San Nicolas, Tarlac City DASMARIÑAS
Mobile No.:0917 851-5172 Tel.Nos.: (045) 982-9652 Veluz Plaza Bldg. STA. ROSA-BALIBAGO
(02) 8884-7600 loc. 4337 Zone 1, Aguinaldo Highway Old National Highway
SAN FERNANDO-BAYAN Fax No.: (045) 982-9653 Dasmariñas City, Cavite cor. Roque Lazaga St.
JSL Bldg., Consunji St. Tel. Nos.: (046) 416-0510; 416-0501 Sta. Rosa City, Laguna
City of San Fernando, Pampanga TUGUEGARAO (02) 8884-7600 loc. 4368 Tel. Nos.: (049) 534-1167
Tel.No.: (045) 961-8168; 961-4575 Metropolitan Cathedral Parish Rectory (02) 8520-8448
(02) 8884-7600 loc. 4320 Complex Rizal St., Tuguegarao City IMUS-TANZANG LUMA
Tel.Nos.: (078) 844-0484 OLMA Bldg. STO. TOMAS
SAN ILDEFONSO-SAVEMORE (02) 8884-7600 loc.4338 Aguinaldo Highway The Lifestyle Strip, Maharlika Highway
Savemore Bldg. Tanzang Luma, Imus City, Cavite San Antonio, Sto. Tomas, Batangas
Cagayan Valley Road URDANETA Tel. Nos.: (046) 471-4715; 476-0927 Tel. Nos.: (043) 318-0582; 778-3247
Poblacion, San Ildefonso, Bulacan MacArthur Highway, Nancayasan (02) 8884- 7600 loc. 4349 (02) 8884-7600 loc. 4389
Tel. Nos.: (044) 797-0742; 797-0974 Urdaneta City, Pangasinan Fax No.: (046) 471-9413
(02) 8988-9555 loc. 4853 Tel. Nos.: (075) 656-2331
(02) 8884-7600 loc. 4372
Fax No.: (075) 522-0498

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 China Bank Savings Branches
TAGAYTAY-SAVEMORE DAVAO TACLOBAN
Mendez Crossing West Brgy. 9-A Poblacion Dist. YVI Center, Bldg. A Fatima Village,
Tagaytay-Nasugbu Highway E.Quirino Avenue, Davao City Tacloban City
cor. Mendez-Tagaytay Road Tel. Nos.: (082) 881-3873 Tel. Nos.: (053) 832-2066
Tagaytay City (02) 8884-7600 local 4140 (053) 832-1974
Tel. Nos.: (046) 413-3871;413-3872
(02) 8988-9555 loc. 4876 DAVAO-RECTO TAGUM-CITYMALL
Mobile No.:0917 561-5334 C. Villa Abrille Bldg. T-01 & T-02 CityMall, Purok Ne Baysa
C.M. Recto Ave., Davao City Visayan Village, Maharlika Highway
TANAUAN CITY Tel. Nos.: (082) 305-5808 Tagum City, Davao del Norte
China Bank Savings Bldg. (02) 8884-7600 loc. 4344 Tel. Nos.: (084) 216-8116; 216-8117
Jose P. Laurel National Highway (082) 227-1802 (02) 8884-7600 loc. 4981
Darasa, Tanauan City, Batangas
Mobile No.:0917 863-6160 GENERAL SANTOS TALISAY NEGROS-SAVEMORE
Go Chay Ching Bldg. Savemore Talisay
VISAYAS – MINDANAO #10 I. Santiago Boulevard Mabini St., Zone 12, Paseo Mabini
General Santos City Talisay City, Negros Occidental
BACOLOD Tel. Nos.: (083) 552-6329; 552-6330 Tel. Nos.: (034) 441-6264; 441-6267
SKT Saturn Bldg. (02) 8884-7600 loc. 4350
Lacson cor. Rizal St. ZAMBOANGA-CITYMALL
Bacolod City, Negros Occidental KALIBO-CITYMALL CityMall, Don Alfaro St.
Tel.Nos. (034) 435-6983; 435-7143 CityMall, F. Quimpo St. connecting Tetuan, Zamboanga City
708-2041; (02) 8988-9555 Mabini and Toting Reyes St. Tel.No.: (062) 955-8709
loc. 4810 and 4811 Kalibo, Aklan
Tel. No.: (036) 268-4379
CAGAYAN DE ORO Mobile No.:0917 804-7837
GAW Bldg., Sergio Osmeña St.
Cogon District, Cagayan de Oro City ILOILO-IZNART
Tel. Nos.: (088) 859-0169; 859-0740 G/F Golden Finance Bldg.
852-2006 Iznart St., Iloilo City
Tel. Nos.: (033) 335-0213; 321-0940
CEBU-LAHUG (02) 8988-9555
G/F, Skyrise IT Bldg. loc. 4863 and 4864
Brgy. Apas, Lahug, Cebu City
Tel. No.: (032) 236-0810 ILOILO-JARO
Lopez Jaena cor. El 98 St.
CEBU-MANDAUE Jaro, Iloilo
A. Del Rosario Ave. Tel. Nos.: (033) 320-0370; 320-0426
Mantuyong, Mandaue City, Cebu (02) 8988- 9555
Tel. Nos.: (032) 520-2770; 422-8019 loc 4861 and 4862
(02) 8884-7600 loc 4310
ROXAS AVE.-CAPIZ CITYMALL
CEBU-MANGO CityMall-Roxas City
JSP Mango Realty Bldg. Roxas Ave., Barangay VI
Gen. Maxilom Ave. cor. Roxas City, Capiz
Echavez St., Cebu City Tel. No.: (036) 620-0977
Tel. Nos.: (032) 231-4304; 231-4736
(02) 8884-7600 loc. 4346

CEBU MANDAUE-BASAK
Cebu North Road
Basak, Mandaue City, Cebu
Tel. No.: (032) 346-6959
Fax No.: (032) 346-8814

122 C H I N A B A N K I N G C O R P O R AT I O N
China Bank Savings Business Offices
SALES OFFICES & BUSINESS MARIKINA SALES OFFICE APD SALARY LOAN CENTERS MALOLOS
CENTERS CTP Bldg., 3rd Floor Canlapan Street, Sto. Rosario
Gil Fernando Ave., Marikina City NCR - QUEZON AVENUE Malolos City, Bulacan
BAGUIO SALES OFFICE Tel. Nos.: (02) 8645-9819 2nd Floor, G.J. Building Tel Nos.: (044) 794-1648
B108 Lopez Bldg., 2nd Floor (02) 8884-7600 local 4238 385 Quezon Avenue, Quezon City (02) 8988-9555 loc 4152
Session Road cor. Assumption Road Tel No.: (02) 8372-7926 Mobile No.: 0948 858-2125
Baguio City PLARIDEL SALES OFFICE Mobile No.: 0917 816 1341
Tel Nos.: (02) 8884-7600 local 4232 0226 Cagayan Valley Road, 2nd Floor PAMPANGA
Banga 1st, Plaridel, Bulacan BACOLOD JSL Building, Consunji Street
Tel. Nos.: (02) 8884-7600 locals 4202 SKT Saturn Building San Fernando, Pampanga
CAGAYAN DE ORO SALES OFFICE 4251 and 4251 Lacson cor Rizal Street, Bacolod City Tel Nos.: (045) 403-9771
Sergio Osmeña St. Tel No.: (02) 8988-9555 loc 8651 (045) 403-9770
Cogon District, Cagayan De Oro City SAN FERNANDO PAMPANGA Mobile No.: 0917 552-3389
Tel. No.: (02) 8884-7600 local 4234 BUSINESS CENTER BAGUIO
JSL Bldg., 3rd Floor B108 Lopez Building NAGA
CEBU BUSINESS CENTER Consunji St., City of San Fernando, Session Road cor Assumption Road, 2nd floor Rl Building
JSP Plaza Bldg., 2nd Floor Pampanga Baguio City Panganiban Street, Lerma, Naga City
General Maxilom cor. Echaves St. Tel. Nos.: (045) 961-0005; 961-0008 Tel No.: (02) 8988-9555 loc 8650 Tel Nos.: (054) 881-2557
Cebu City (02) 8884-7600 locals 4221 Mobile No.: 0917-8619414 (02) 8988-9555 loc 8655
Tel. Nos.: (032) 232-5061; 232- 6263 4236; and 4237 Mobile No.: 0917 861-9406
(02) 8884-7600 locals 4207 CAGAYAN DE ORO
4209; 4205; 4206 SAN PABLO SALES OFFICE 2nd Floor, Sergio Osmeña Street ROXAS
China Bank Savings Bldg. Cogon District, Cagayan De Oro City Ground floor, T-114 CityMall Roxas
DAVAO BUSINESS CENTER 2nd Floor, Rizal Ave. cor. A. Fule St. Mobile Nos.: 0917 861-9281 Roxas Avenue, Brgy. VI,
8990 Corporate Center, San Pablo City 0951 554-4629 Roxas City, Capiz
3rd Floor Quirino Ave., Davao City Tel. Nos.: (049) 800-3917 Tel Nos.: (036) 620-0094
Tel. Nos.: (082) 298-4569 CEBU (02) 8988-9555 loc 4144
(02) 8884-7600 local 4218 SANTIAGO SALES OFFICE 2F Unit 204 & 205 JSP Mango Realty Mobile No.: 0917 806-4432
Jeco Bldg. Building, Gen. Maxilom Avenue
GENERAL SANTOS SALES OFFICE Maharlika Highway cor. Echavez Street, Cebu City SAN PABLO
Go Chay Ching Bldg. Victory Norte, Santiago City Tel No.: (032) 238-7820 Rizal Avenue cor Lopez Jaena Street,
# 10 I. Santiago Boulevard Tel. No.: (02) 8884-7600 local 4374 Mobile No.: 0917 822-3514 San Pablo City
General Santos City Tel Nos.: (049) 521-3991
Tel. Nos.: (083) 301-5042 URDANETA SALES OFFICE DAVAO (02) 8988-9555 loc 8656
(02) 8884-7600 local 4271 China Bank Savings, 8990 Corporate Center
MacArthur Highway Quirino Avenue, Davao City SANTIAGO
ILOILO SALES OFFICE Nancayasan, Urdaneta City Tel Nos.: (082) 287-6824 JECO Building Maharlika Highway
Lopez Jaena cor. El 98 St. Pangasinan (02) 8988-9555 loc 8653 cor Quezon Avenue
Jaro, Iloilo City Tel Nos.: (075) 522-0498 Mobile No.: 0917 861-9403 Victory Norte Santiago City, Isabela
Tel. Nos.: (02) 8884-7600 (075) 656-2331 Tel Nos.: (078) 305-0064
locals 4219 and 4225 (02) 8884-7600 local 4372 GEN. SANTOS (02) 8988-9555 loc 4824
Go Chay Ching Building
IMUS SALES OFFICE Santiago Boulevard, TACLOBAN
OLMA Bldg. General Santos City YVI Center, Building A,
Aguinaldo Highway Tel Nos.: (083) 554-0211 Baybay S. Road, Brgy. 77, Fatima
Tanzang Luma, Imus City, Cavite (02) 8988-9555 loc 4129 Village, Marasbaras, Tacloban City
Tel. Nos.: (046) 416-4992 Mobile No.: 0917 816-2621 Tel No.: (053) 832-1974
(02) 8884-7600 local 4268 Mobile No.: 0917 826-7612
ILOILO
LA UNION BUSINESS CENTER Golden Commercial Building, TAGUM
A.G. Zambrano Bldg. Iznart, Iloilo City CityMall, Maharlika Highway
Quezon Ave. Tel Nos.: (033) 320-5309 cor Lapu-Lapu Extension
San Fernando City, La Union (02) 8988-9555 Brgy. Magugpo, Tagum City
Tel. Nos.: (072) 888-7477 loc 8659 and 4135 Tel Nos.: (084) 216-8245
(02) 8884-7600 local 4227 8988-9555 loc 8658
LA UNION
LIPA SALES OFFICES A.G. Zambrano Building, TANAUAN
China Bank Savings Bldg. Quezon Avenue Jose P. Laurel National Highway
2nd Floor C.M Recto Ave. San Fernando City, La Union Darasa, Tanauan City, Batangas
Lipa City Tel Nos.: (072) 687-2218 Tel Nos.: (02) 8988-9555 loc 4147
Tel. Nos.: (043) 756-5003 (02) 8988-9555 loc 8654 917 856-4718
(02) 8884-7600 local 4253 Mobile No.: 0917 861-9408
TAYTAY
LEGAZPI SALES OFFICE LEGAZPI 2nd floor, Gonzaga Building
F. Imperial Street, Brgy. Bitano 2nd floor, Lot 4-6 Blk 20 PCS-1617 Manila East Road, Taytay, Rizal
Legazpi City, Albay Sol’s Subdivision, Purok 5, 37 Tel No.: (02) 633-3988
Tel. Nos.: (02) 8884-7600 locals 4202 Bitano, Legazpi City Mobile No.: 0917 815-8627
4251, 4263, and 4261 Mobile No.: 0917 805-9102
TUGUEGARAO
LINGAYEN Metropolitan Cathedral Parish
The Hub Building, G/F Unit 5&6, Rectory Complex, Rizal Street,
Solis Street, Brgy. Poblacion, Tuguegarao City
Lingayen, Pangasinan Tel No.: (078) 375-4471
Tel No.: (02) 8988-9555 loc 4132 Mobile No.: 0917 816-9491

LUCENA VIGAN
Merchan cor Evangelista Street, Maestro Convention Center
Lucena City Florentino Street, Brgy 1, Vigan City
Tel Nos.: (042) 717-9387 Tel No.: (077) 674-6062
(02) 8988-9555 loc 8657
Mobile No.: 0917 861-9387

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 Subsidiaries and Affiliate

CBS Building, 314 Sen. Gil Puyat Avenue, Makati City

Tel. No.: (020) 8988-9555
www.cbs.com.ph

China Bank Savings, Inc. (CBS) began operations on September 8, 2008 following the acquisition of Manila Bank
by China Bank in 2007. Subsequent mergers with Unity Bank and Planters Development Bank bolstered CBS as a
leading thrift bank in the industry. With a nationwide retail banking network and strong platform for auto, housing,
teachers and enterprise finance, CBS is dedicated to servicing the needs of entry-level customers, the broad
consumer market and small business owners. CBS is committed to promoting financial inclusiveness and uplifting
the quality of life of consumers and entrepreneurs, in line with its Easy Banking for You brand of service.

BOARD OF DIRECTORS MANAGEMENT COMMITTEE WITH INTERLOCKING

POSITION IN CHINA BANK
Chairman Executive Vice President Vice Presidents
Ricardo R. Chua and Officer-In-Charge James Christian T. Dee Ronald R. Marcaida
Joseph C. Justiniano Treasurer & Head, Treasury Chief Audit Executive
Vice Chairman
Nancy D. Yang First Vice Presidents Arthur S. Esquivel Editha N. Young
Atty. Josephine F. Fernandez Chief Marketing Officer Chief Technology Officer
Directors Head, Human Resources
William C. Whang Niel C. Jumawan Hanz Irvin S. Yoro
Alexander C. Escucha Jan Nikolai M. Lim Head, APD Lending Information Security Officer
Rosemarie C. Gan Head, Consumer Lending
Patrick D. Cheng Sonia B. Ostrea
Luis Bernardo A. Puhawan Head, Centralized Operations
Independent Directors Controller & Head,
Alberto S. Yao Controllership Marjorie T. Esplana
Margarita L. San Juan Head, SME Lending
Philip S.L. Tsai Jaydee P. Caparas
Angeline Ann H. Hwang† Head, Branch Banking Group Mary Grace F. Guzman
Head, Asset Recovery
Acting Corporate Secretary
Atty. Odel S. Janda

Asst. Corporate Secretary

Atty. Arturo Jose M. Constantino

† Passed away on April 11, 2020

124 C H I N A B A N K I N G C O R P O R AT I O N
28F BDO Equitable Tower 28F BDO Equitable Tower
8751 Paseo de Roxas, Makati City 8751 Paseo de Roxas, Makati City
Tel. No.: (632) 8885 5798 Tel. No.: (632) 230-6661 to 6663

China Bank Capital Corporation (CBCapital) is China China Bank Securities Corporation (CBSecurities) is
Bank‘s investment house subsidiary. China Bank Capital the stock brokerage arm of China Bank Capital
provides a wide range of services that include debt and Corporation. China Bank Securities complements China
equity capital raising, corporate finance, financial advisory, Bank Capital’s equity underwriting activities covering
and securitization to public and private companies. China initial, follow-on and secondary public offerings in terms
Bank Capital has acted as issue manager, arranger, and of distribution and marketing to retail and institutional
underwriter in various landmark deals. clients as well as providing research and equity-related
services. Clients of the China Bank Group likewise
benefit by way of access to stock brokerage services
BOARD OF DIRECTORS MANAGEMENT TEAM
covering execution of stock transactions at the Philippine
Chairman President Stock Exchange (both peso- and dollar-denominated
Ricardo R. Chua Ryan Martin L. Tapia listed stocks) as well as a suite of research reports
on listed companies, industry sectors and markets, in
Vice Chairman Head of Origination and general.
Romeo D. Uyan, Jr. Client Coverage
Michael L. Chong
Directors BOARD OF DIRECTORS MANAGEMENT TEAM
William C. Whang Head of Execution and
Ryan Martin L. Tapia Treasurer Chairman President and Chief
Lilian Yu Juan Paolo E. Colet William C. Whang Executive Officer
Marisol M. Teodoro
Independent Directors Head of Distribution Vice Chairman
Philip S. L. Tsai Grace T. Chua Romeo D. Uyan, Jr. Research Director
Alberto S. Yao Rastine Mackie D. Mercado
Margarita L. San Juan Legal Officer Directors
Leah M. Quiambao Marisol M. Teodoro Treasurer, Corporate Secretary
Corporate Secretary Ryan Martin L. Tapia and Business Operations
Atty. Leah M. Quiambao Lilian Yu Director
Mary Antonette E. Quiring
Compliance and Risk Officer Independent Director
Alexis Deo C. Manalo Alberto S. Yao Sales and Trading Director
Angeline Ann H. Hwang† Julius M. German

Associated Person and

Compliance & Risk Director
Kristina S. Wy-Cacayan
† Passed away on April 11, 2020

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 Subsidiaries and Affiliate

8/F VGP Center, 6772 Ayala Ave.

4/F China Bank Building, 8745 Paseo de Roxas Makati City 1226, Philippines
corner Villar Street, Makati City Tel. No.: (632) 8885-5555
Tel. Nos.: (632) 8885-5555; 8885-5053; 8885-5060 VGP Center: (632) 8751-6000
8885-5051; 8885-5052
Fax No.: (632) 8885-5047; 8885-9458
Chinabank Insurance Brokers, Inc. (CIBI) is a
CBC Properties and Computer Center, Inc. (CBC-PCCI) whollyowned subsidiary of the Bank established on
was created on April 14,1982 to provide computer-related November 3, 1998 as a full service insurance brokerage.
services solely to the China Bank group. It manages the It provides direct insurance brokerage for retail and
Bank’s electronic banking and e-commerce requirements, corporate customers, with a wide and comprehensive
including sourcing, developing and maintaining software range of plans for life and non-life insurance. Under the
and hardware, financial systems, access devices and Non-Life insurance category, CIBI offers Property, Motor,
networks to foster the safety and soundness of China Marine, Accident, Bonds, Construction All Risk and
Bank’s technology infrastructure and keep its processing Liability for the bank clients.
capabilities in top shape.

BOARD OF DIRECTORS MANAGEMENT TEAM DIRECTORS AND OFFICERS

Chairman President Chairman Director and President

Gilbert U. Dee Peter S. Dee Patrick D. Cheng Rosa Maria L. Musico

Directors Treasurer Director Corporate Secretary

Peter S. Dee William C. Whang William C. Whang Belenette C. Tan
Ricardo R. Chua
William C. Whang General Manager Independent Directors
Rosemarie C. Gan Manuel C. Tagaza Philip S.L. Tsai
Margarita L. San Juan
Corporate Secretary Chief Technology Officer
Atty. Leilani B. Elarmo Editha N. Young

Manulife China Bank Life Assurance Corporation (MCBLife) is a strategic

alliance between Manulife Philippines and China Bank. MCBLife provides a wide
10th Floor NEX Tower range of innovative insurance products and services to China Bank and China
6786 Ayala Avenue, Bank Savings customers. MCBLife aims to ensure that every client receives
Makati City 1229, Philippines the best possible solution to meet his or her individual financial and insurance
Customer Care: (632) 8884-7000 needs. In 2014, China Bank raised its equity stake to 40% in MCBLife.
Domestic Toll-free: 1-800-1-888-6268
E-mail : phcustomercare@manulife.com DIRECTORS AND OFFICERS
www.manulife-chinabank.com.ph
Chairperson Independent Directors Head of Sales
Vibha Coburn Rhoda Regina R. Rara Mercedes Beltran
Janette L. Peña
Director/President & CEO Conrado Favorito Head of Training
Sandeep Deobhakta Juan Miguel Javellana
Chief Financial Officer/
Directors Treasurer Corporate Secretary
Richard Bates Katerina Suarez Basilio O. Visaya, Jr.
William C. Whang
* Vice Joachim Wessling, who passed away on Patrick D. Cheng Chief Legal Counsel and Assistant Corporate Secretary
March 21, 2020 Matthew Lawrence Chief Compliance Officer Frances Ianna S. Canto
Fritzie Tangkia-Fabricante

126 C H I N A B A N K I N G C O R P O R AT I O N
Products and Services
102-2, 102-7

PESO DEPOSITS Regular US Dollar Savings

An interest-earning, passbook-based deposit account
Checking denominated in US Dollars (USD).

Chinacheck Plus Euro Savings

An affordable interest-bearing checking account that comes An interest-earning, passbook-based deposit account
with an Automated Teller Machine (ATM) card. denominated in Euros.

Savings Chinese Yuan Savings

An interest-earning, passbook-based deposit account
Passbook Savings denominated in Chinese Yuan (CNY), also known as
An affordable interest-bearing checking account that comes Renminbi.
with an Automated Teller Machine (ATM) card.
Japanese Yen Savings
ATM Savings A non-interest earning, passbook-based deposit account
A Peso-denominated savings account with a China Bank denominated in Japanese Yen (JPY) for facilitating trade and
ATM card that allows deposits and withdrawals against non-trade settlement activities.
available funds by the depositor anytime.
Time Deposit
SSS Pensioner’s Account
A savings account for SSS pensioners for the purpose of Regular US Dollar Time Deposit
crediting pensions and other SSS benefits. A high-yield US Dollar-denominated fixed deposit account
with a maturity of 30 days to 1 year with interest credited at
MoneyPlus Savings the end of the term.
An account that gives flexibility and liquidity with bonus
earnings as account balance increases Special US Dollar Time Deposit (3-Year)
A high-yield fixed deposit account with a maturity of three,
Young Savers four, and five years with a quarterly interest rate re-priced
An interest-bearing Peso savings account for children and and credited every quarter to a linked U.S. Dollar Savings
teens ages 17 years old and below with low initial deposit Account.
and maintaining balance requirements.
Euro Time Deposit
Time Deposit An interest-earning, Euro-denominated, fixed-term deposit
account evidenced by a certificate.
Regular Time Deposit
For a low minimum placement, you can earn higher interest DEPOSIT–RELATED SERVICES
than in a regular savings account.
Cash Card
Diamond Savings Account A peso denominated re-loadable prepaid card with
A high-yield fixed-term deposit account evidenced by no maintaining balance. It is an alternative mode of
a Diamond Savings Account Passbook. The Bank shall disbursement for business or personal use. It does not earn
shoulder the DST provided the account is not pre- interest.
terminated.
Gift Check
Money Lift Plus A thoughtful gift that is small in size but big in possibilities. A
A high-yield, floating rate-based, long-term Philippine China Bank Gift Check for weddings, birthdays, graduations,
Peso (PHP) time deposit, maturing in at least five (5) years and other special occasions.
and one (1) day; with interest being credited to client’s
Settlement Account every quarter. Manager’s Check
This is another way for clients to make payments where
FOREIGN CURRENCY DEPOSITS checks are issued by the bank in exchange for their cash or
debit from current / savings account – these checks are also
Savings considered “good as cash”

Regular Time Deposit Demand Draft

A fixed-term account evidenced by a certificate of time A check issued by the Bank against its own account with our
deposit (CTD) and typically earns higher interest the longer correspondent banks for use of clients to transfer funds.
the term and the higher the placement amount.

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 Products and Services

Safety Deposit Box Term Loan

The service offered by the Bank to its customers for the A non-revolving facility to be repaid within a specified period.
safekeeping / storage of valuables / possessions and other A term loan may have single or multiple drawdowns, but
important documents under lock and key. once repaid, the amounts cannot be re-drawn.

Night Depository Services Trade Finance Products

A service to secure and conveniently process deposits even Include issuance of Trust Receipt and Letter of Credits (“LC”)
after banking hours or during holidays. Cash and checks (including Standby LC, Usance LC, Sight LC, or Cash LC,
deposited will be credited to the customer’s account on Import LC or Export LC, and which could be revocable or
the next business day, subject to verification and the Bank’s irrevocable); and
normal deposit availability guidelines.
Factoring Receivable
Cash Delivery and Deposit Pick-Up Services A credit facility offered to institutions where the bank
A convenient deposit pick-up and cash delivery solution for purchases trade/account receivables at a discounted rate.
secure cash handling. Service includes the secured transport
of cash via Bank armoured car with client’s preference on Consumer Loans
the frequency of pick-up and/or delivery. All deposits are also
processed in a secure bank facility where cash deposits are HomePlus Real Estate Loan
credited the same day. A loan for the purchase, construction, and renovation of
residential units, refinancing of housing loans with on-time
OVERSEAS KABABAYAN SERVICES payments, and reimbursement within a year of purchase.

China Bank Remittance AutoPlus Vehicle Loan

Safe and affordable remittance service to the Philippines A loan for the purchase of brand new, pre-owned vehicles,
through China Bank’s remittance partners abroad. and fleet requirements of companies and reimbursement
Beneficiaries may receive their remittances through (1) of purchase cost of brand new vehicles within 30 days from
credit to bank accounts, whether China Bank or other bank purchase date.
accounts; (2) cash pick-up anywhere through CBC / CBS
branches and other partners; (3) cash delivery. Contract-to-Sell Facility
A Purchase of Receivables facility that is granted to eligible
Overseas Kababayan Savings (OKS) Account (PHP) real estate developers for the purpose of liquefying their
A Peso-denominated, no-initial deposit, and no maintaining receivables arising from their installment sales covered by
balance account for OFWs and their beneficiaries that makes Contracts to Sell (CTS).
saving and sending /receiving remittances more secure and
convenient. Credit Cards

Overseas Kababayan Savings (OKS) Account (USD) China Bank World Mastercard
A US dollar-denominated, lower initial deposit, and The total luxury card that provides world-class privileges.
no maintaining balance account for OFWs and their Cardholders gain access to a wide spectrum of exclusive
beneficiaries that makes saving and sending/receiving lifestyle and events, global perks, VIP lounges, and an
remittances more secure and convenient. exclusive personal concierge - The China Bank World
Concierge.
LOANS AND CREDIT FACILITIES
China Bank Cash Rewards Mastercard
Omnibus Line The card that enables cardholders to “Save as you spend”
A revolving master facility offered to borrowers with sub- with 6% Cash Rebate on qualified spending.
facilities including trade and loan lines that may be shared
with related or affiliated companies. China Bank Platinum Mastercard
The ultimate travel companion card that rewards cardholders
Loan Line when they travel, shop, and dine anywhere in the world.
A revolving facility under which funds may be drawn, repaid
and re-drawn at any point within the loan tenor (usually China Bank Freedom Mastercard
renewable on a yearly basis). The card that offers perpetual waiver on annual membership
fees with access to rewards and delightful deals.

128 C H I N A B A N K I N G C O R P O R AT I O N
China Bank Prime Mastercard Export Bills Discounting
The “Everyday Card” that makes day-to-day spending more Allows the bank to pay in advance of the maturity of the
rewarding. drafts, at a discounted rate an accepted Usance Bill of
Exchange or documents presented under an LC.
INTERNATIONAL BANKING PRODUCTS & SERVICES
Export Collections
Letter of Credit Documentary collection arrangement in which an exporter
A written commitment to pay, by an importer or importer’s sends the collection documents (accompanied by his/
bank (called the issuing bank) to the exporter or exporter’s her bank’s printed form and a cover letter for collecting
bank (called the accepting bank, negotiating bank, or instructions) directly to the importer’s bank.
paying bank). It guarantees payment of a specified sum in a
specified currency, provided the exporter meets precisely- Customs and Duties Tax Payments
defined conditions and submits the prescribed documents
within a fixed timeframe. Collection and remittance of taxes, duties and other levies to
the Bureau of Customs imposed on importations and some
Standby Letter of Credit export shipments.
Stand-by letter of credit is issued by a bank serving as a
parallel (collateral) payment source in case the primary Advising of Letters of Credit and Standby Letters of
source fails to meet its obligations in part or in full. Credit
Allows the bank to receive letters of credit (L/C) and standby
Shipping Guarantee letters of credit from the issuing bank for authenticating it
A document, issued by a bank at the request of its importer/ and informing (‘advising’) the exporter (the L/C’s beneficiary)
customer, addressed to the shipping line (carrier), requesting that a L/C has been opened by the importer in the exporter’s
said carrier to release stated merchandise to the importer in favor.
the temporary absence of the original bill of lading.
Telegraphic Transfer (Domestic and International)
Documents against Payment An electronic wire transfer, usually in connection with
An arrangement under which an exporter instructs the payment in advance or payment by open account to a certain
presenting bank to hand over shipping and title documents to beneficiary.
the importer only if the importer fully pays the accompanying
bill of exchange or draft. Purchase and Sale of Foreign Exchange
Buying and selling of foreign exchange to service the
Documents against Acceptance payment of the invoices.
An arrangement in which an exporter instructs a bank to
hand over shipping and title documents to an importer only Inward and Outward Remittance Service -Domestic and
if the importer accepts the accompanying bill of exchange or International
draft by signing it. Send and receive money within the Philippines or to and
from other countries.
Open Account
An arrangement wherein the exporter ships the merchandise INVESTMENT BANKING SERVICES
to the importer for payment at a later date (i.e. 30 days from
shipment date) Bonds
Fixed income instruments that represent a loan made by an
Trust Receipt Facility investor to a borrower (typically corporate or government
A document executed by an importer in favour of a bank entities).
financing an import transaction, whereby the bank receives
a security interest in the goods in exchange for releasing the Syndicated Loans
documents required by the carrier for delivery. The importer Financing offered by a group of lenders – referred to as a
is obligated to maintain the goods or to proceeds from their syndicate – who work together to provide funds for a single
resale at the disposal of the bank. borrower.

Negotiation of Export Letters of Credit Corporate Notes

Allows the bank to examine export documents under a Sight Typically medium to long-term debt instrument issued by
LC and determine if the credit terms have been met for corporations to a limited set or number of investors, such as
eventual purchase and payment to the exporter. to primary institutional lenders or qualified buyers.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 129
 Products and Services

Structured Loan Corporate Restructuring

Business loan given based on a company’s performance. It Corporation action undertaken by a company to modify its
takes into account cash flow more than asset base, and it operating activities or its existing capital structure.
can be a creative financing tool to overcome challenges in
the business cycle. Valuation
Analytical process of determining the current (or projected)
Project Finance worth of an asset or a company.
Financing arrangements serve to provide financial
resources for specific projects, which are operated as Securitization
individual business entities, and the income and cash flows Financial arrangement that involves issuing securities backed
generated by these projects are used to repay their financial by a pool of assets.
obligations.
TRUST PRODUCTS & SERVICES
Long-Term Negotiable Certificate of Deposit (LTNCD)
Bank product offered to investors which has features of China Bank Money Market Fund
a term or time deposit and can negotiated, transferred or A Peso-denominated UITF classified as a money market
traded by a holder to another individual. fund which offers a high level of liquidity and better earnings
potential than those offered by regular savings and short-
Enrolled Notes (Short Dated Notes/QB Notes) term time deposit accounts by investing in a diversified
Short to medium-term debt instruments issued to qualified portfolio of marketable fixed-income securities comprised of
buyers and are enrolled in Philippine Dealing and Exchange deposits, tradable money market instruments, government
Corporation’s Fixed Income Board. securities and corporate bonds and notes. The Fund’s
average duration is not more than one (1) year and caters to
Initial Public Offering investors with moderate risk appetite.
Type of public offering in which shares of a company is
issued or sold to the public typically consisting of both China Bank Cash Fund
institutional and retail investors. IPO’s allow companies to A Peso-denominated UITF classified as a money market
raise capital from public investors. fund which offers a high level of liquidity and better
earnings potential than those offered by regular savings
Follow On Offering deposit accounts and short-term time deposit accounts by
Issuance of stock subsequent to the company’s initial public investing primarily in special savings deposits. The Fund’s
offering (IPO). average duration is not more than one (1) year and caters to
conservative investors.
Preferred Shares
Type of stock which typically give preference to the China Bank Short-Term Fund
shareholders in the distribution of assets of the corporation A Peso-denominated UITF classified as a money market
in case of liquidation and/or in the distribution of dividends. fund which offers a high level of liquidity and better earnings
potential than those offered by offered by money market
Convertible Shares placements, regular savings deposit and short-term time
Shares of stock that have a feature that allows the holder to deposit accounts by investing primarily in a diversified
convert the share into another security. portfolio of marketable financial instruments including
deposits, money market instruments, government securities,
Exchangeable Shares and corporate bonds/notes and preferred shares of stock
Type of instrument that allows the holder to exchange the (classified as debt). The Fund’s average duration is not more
instrument to another instrument, typically an instrument than one (1) year and caters to moderate investors.
other than that of the existing instrument of the issuer, at
some future date and under prescribed conditions. China Bank Intermediate Fixed Income Fund
A Peso-denominated UITF classified as an intermediate bond
Mergers & Acquisition Advisory fund which intends to achieve for its participants income
Covers a broad spectrum of services which include advising in the intermediate term that is potentially higher than its
on mergers and acquisitions, evaluation of strategic established benchmark by investing primarily in a diversified
alternatives, analysis of business plans, and assessment of portfolio of high- grade marketable fixed–income securities
potential strategic and financial partners. comprised of deposits, tradable money market instruments,
government securities, corporate bonds and notes and
preferred shares of stock (classified as debt). The Fund’s
average duration is not more than three (3) years and caters
to investors with moderate risk appetite.

130 C H I N A B A N K I N G C O R P O R AT I O N
China Bank Fixed-Income Fund China Bank Dollar Money Market Fund
A Peso-denominated UITF classified as a long-term bond A US Dollar-denominated UITF classified as a money market
fund which intends to achieve for its participants a steady fund which offers liquidity and higher earnings potential than
stream of income by investing primarily in a diversified USD time deposits by investing primarily in fixed- income
portfolio of high-grade marketable fixed-income securities securities mostly time deposits, special savings accounts and
such as government securities, tradeable corporate bonds government securities. The Fund’s average duration is not
and notes of varying tenors as well as bank deposits and more than one (1) year and caters to conservative investors.
money market placements. The Fund’s average duration is
not more than ten (10) years and caters to investors with Investment Management Arrangement
moderate risk appetite. China Banking Corporation - Trust and Asset Management
Group (CBC - TAMG) handles the administration and
China Bank Balanced Fund investment of funds and assets of an individual in order to
A Peso-denominated UITF classified as a balanced meet his objectives. The arrangement may be discretionary
fund which intends to achieve for its participants capital wherein CBC - TAMG has full authority to make investment
appreciation as well as a steady stream of income by decisions based on pre-agreed investment guidelines, but
primarily investing in a diversified portfolio of high-grade may also be directed wherein investment decisions require
tradable fixed-income securities issued by the Philippine prior client consent.
government and local corporations and choice equity issues
listed in the Philippine Stock Exchange (PSE). The equity Personal Management Trust
component of the Fund shall not exceed 60% of the portfolio A living trust arrangement wherein CBC - TAMG acts as a
at any given time with an average duration of not more than trustee to manage the client’s wealth or estate, generally for
ten (10) years for the fixed-income investments. The Fund the preservation of assets or property for future use of the
caters to aggressive investors. beneficiaries, which may or may not be a third party, and/or
to answer for current needs. CBC - TAMG shall ensure fair
China Bank Equity Fund and equitable distribution of wealth in accordance with the
A Peso-denominated UITF classified as an equity fund client’s wishes and defined instructions.
which offers capital appreciation by primarily investing in
a diversified portfolio of choice equity issues listed in the Escrow Services Arrangement
PSE. The Fund caters to aggressive investors with its equity An arrangement wherein CBC - TAMG acts as an
component not exceeding 95% of the portfolio at any given independent third party or an escrow agent to safeguard the
time. interest of the parties to a transaction on assets, documents
or funds while the terms and conditions of the contract
China Bank High Dividend Equity Fund are being fulfilled. CBC - TAMG offers the following types
A Peso-denominated UITF classified as an equity fund which of escrow services: CGT, Buy & Sell, POEA, HLURB, and
offers long-term capital appreciation by primarily investing in PAGCOR.
a diversified portfolio of choice common and preferred equity
issues listed in the PSE which have regular dividend payment Employee Benefit Fund Management
policy and/or dividend payment track record. The Fund caters A cost-effective corporate arrangement where CBC - TAMG
to aggressive investors with its equity component not helps the company set up and manage its retirement fund
exceeding 95% of the portfolio at any given time. to benefit its employees as well as the company in terms of
avoiding unnecessary cash flow disruptions brought about by
China Bank Dollar Fund payment of retirement benefits and possible tax savings. The
A US Dollar-denominated UITF classified as long-term bond arrangement covers assistance in the development of the
fund which intends to achieve for its participants a steady retirement plan rules and regulations, coordination with the
stream of income by investing primarily in a diversified actuary, registration of the retirement plan with the Bureau
portfolio of high-grade marketable securities comprised of Internal Revenue for tax- exemption qualification, and the
mainly of Philippine sovereign bonds as well as US treasury development and implementation of investment strategies to
bonds of varying tenors. The Fund’s average duration is maximize the fund’s earnings.
not more than ten (10) years and caters to investors with
moderate risk appetite. Corporate Fund Management
CBC - TAMG acts as an Investment Manager authorized to
administer the funds of a corporation in accordance with
pre-agreed investment guidelines based on the company’s
objectives, liquidity requirements, yield expectation, and
risk tolerance. The arrangement may either be discretionary
wherein CBC - TAMG has full authority to make investment
decisions or discretionary wherein the company has control
on how the funds shall be invested.

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 Products and Services

Facility Agency Arrangement Promissory Note

CBC - TAMG acts as a liasion between a corporate borrower Short term deposits substitute (overnight to 1 year)
and a group of lenders to primarily ensure compliance by the evidenced by a PN Certificate; available in Philippine Peso;
parties with all the terms and conditions in syndicated loan not covered by PDIC.
facilities. The arrangement may also cover receipt from and
disbursement of loan payments to the parties, dissemination Foreign Exchange & Derivatives
of notices and information to all concerned, and coordination
of creditors’ meetings, among others. Foreign Exchange
Spot, Forward and FX Swaps - an agreement to buy/sell a
Security Trusteeship Arrangement currency for another currency.
CBC - TAMG acts as a trustee over the properties or assets
offered as collateral or are the subject of mortgage in favor Derivatives
of a syndicate of creditors. The arrangement may include Interest Rate and Cross Currency Swaps - a bilateral
the monitoring of required collateral value, custodianship of agreement to exchange periodic cash flows for a specific
security documents such as agreements, titles to properties, period of time, based on an agreed notional amount.
and insurance policies.
INSURANCE PRODUCTS
Collecting and Paying Agency Arrangement
CBC - TAMG facilitates the collection of payment and prompt Platinum Invest Elite
disbursement of amounts due to a syndicate of lenders. A single-pay variable life insurance product that allows one
to enjoy the rewards from investing in any or a combination
TREASURY SERVICES of professionally-managed investment funds, while providing
lifelong protection.
Investments
Enrich Max
Local currency-denominated Government and Corporate A single-pay variable life product that provides life insurance
Bond Issues and Perpetual Notes protection and potential optimum investment yields where
Peso-denominated debt Instruments issued by the National values are directly linked to the performance of investment
Government or select corporate entities with fixed interest funds.
rates paid quarterly or semi-annually, subject to final
withholding tax. MCBL Affluence Income
A single-pay variable life insurance product designed
Foreign currency denominated Government and to provide early access to earnings to meet short-term
Corporate Bond Issues and Perpetual Notes needs, unlimited earning potential through investment in
Foreign currency-denominated (US Dollar, Euro, Japanese a professionally managed fund to help achieve medium- to
Yen, Chinese Renminbi) debt Instruments issued by the long-term goals, and life protection insurance for peace of
Philippine National Government, other sovereign entities, or mind.
select local and foreign Corporate entities with fixed interest
rates paid semi-annually. MCBL Affluence Max Elite
A single-pay variable life product that maximizes the potential
China Bank Bond earnings of the policy through the guaranteed start-up bonus.
Peso-denominated debt instruments issued by China Banking
Corporation with fixed interest rate paid monthly, subject to MCBL Enrich
final withholding tax. A variable life insurance product that allows one to enjoy
the rewards from investing in any or a combination of
Deposits and Deposit Substitutes professionally-managed investment accounts, while providing
insurance protection.
LTNCD
Long Term Negotiable Certificate of Deposit issued by the MCBL Invest
bank with a tenor of at least 5 years with quarterly interest A minimum-pay unit-linked product which is geared towards
payments; available in Philippine Peso. investment and is intended to improve the build-up of the
account value (av) in the long run by minimizing upfront
Treasury Certificate of Deposit (TCD) charges and imposing higher surrender charges in early
Short term deposits (overnight to 1 year) evidenced by a policy years.
certificate of deposit; available in Philippine Peso, US Dollar
or Euro.

132 C H I N A B A N K I N G C O R P O R AT I O N
Base Protect Plus Personal Accident- and Travel
A term insurance plan which provides fixed term protection Protection for members of your business, organizations,
coverage for five (5) years, with an option to to automatically or institution in case of loss of life, dismemberment, or
renew coverage up to age 85 or convert to a permanent plan disablement due to accident. In case of death, the benefit is
depending on changing protection needs. paid to the designated beneficiary of the insured.

LifeBuilder Travel Accident Insurance

An insurance-and-investment product that allows you to Covers travel inconveniences such as flight delay, loss of
enjoy the rewards from investing in any or a combination of baggage, medical treatment, among others, for air travel to
professionally-managed investment accounts, while providing Schengen, ASEAN, worldwide and domestic itineraries.
you with guaranteed insurance protection.
Medical Insurance / Employee Benefit
Group Credit Life Offers health coverage to individuals, employers, and
Pays the balance of the loan in case of death of the borrower. medical providers (hospital and doctors) as protection against
Bonus benefit for employees of the lending company who financial exposure due to medical costs. Insurance packages
meet the minimum loan volume and successful enrollment. include Medical Reimbursement programs and Hospital
A. Basic life Income programs.
B. Accidental death disability & dismemberment
C. Total and permanent disability Comprehensive General Liability Insurance
D. Hospital income benefit Covers payment for accidental property damage or bodily
injury to a third party including legal fees, if necessary, that
Group personal accident happens in the course of business operations.
A yearly renewable and cancellable term plan which provides
the following benefits: Electronic Equipment Insurance
A. Accidental death Provides accident insurance for electronic equipment such
B. Accidental dismemberment or loss of use as: electronic data processing (EDP) and office equipment,
C. Double indemnity communication and radio equipment, graphics industry
D. Total permanent disability (optional) equipment, broadcast and television equipment, and other
E. Temporary total disablement (optional) miscellaneous electronic equipment.
F. Hospital indemnity (optional)
Money, Securities and Payroll Insurance
Fire and Allied Perils Protection against loss of money used for business
Insurance coverage for homeowners, building owners, and operations, in case of robbery / hold-up, burglary, brigandage,
tenants against loss or damage to Building (structure, etc.
building / leasehold improvements) and Contents (furniture,
fixtures and fittings, appliances, electronic equipment, etc.) Fidelity Guarantee Insurance
Protection against financial loss due to dishonest/fraudulent
Basic package covers Fire and Lightning, which can be acts of regular employees.
upgraded to include Extended Coverage (smoke, falling
aircraft, vehicle impact, explosion), and natural disasters Property Floater
(Earthquake (Fire & Shock), Typhoon and Floor). Covers loss or damage to mobile property such as heavy
equipment, machines, portable electronic equipment,
Other insurable perils for residential and commercial clients paintings, among others.
include: Riot, Strike and Malicious Damage; Bursting and/or
Overflowing of Tanks, Apparatus & Pipes; Sprinkler Leakage; Contractors’ Insurance All Risks (CARI)
and Spontaneous Combustion. A comprehensive insurance protection against physical loss
or damage and third party liability for construction works,
Motor Car contract works, civil engineering works, construction plant
Protection for vehicle owners against loss or damage to their and equipment, and/or construction machinery.
vehicles, medical expenses for them and their passenger
including Third Party Liabilities. Erections’ Insurance All Risks (EARI)
Protection for contract works involving electro-mechanical
Free 24-hour Roadside Emergency Assistance included in works, installation of machinery and equipment, and the like.
select packages. Aside from the contract works, this may also cover testing
and commissioning.
Extensive repair and dealer network for claims servicing.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 133
 Products and Services

Marine Cargo China Bank Mobile Banking App

Covers various hazards related to the movement of goods or A free mobile application, available on Apple and Playstore,
cargo via air, land or sea. The insurance can cover all stages that can be downloaded and installed in smartphones
of delivery - from the time the goods leave the warehouse, and tablets that enables customers to access their China
throughout the course of transit, until its delivery to the Bank accounts and perform basic and advanced banking
consignee’s final warehouse. transactions on the go. Through China Bank Mobile App,
customers also have access to unique features like RFID
Marine Hull reloading, NOW (No card on withdrawal/emergency cash),
Provides coverage for marine vessels and their machinery and JUMP (Just Use your Mobile Phone) transactions.
against Loss or Damage. Coverage can range from
comprehensive All Risks to limited Total Loss only. Point-Of-Sale (POS)
A local PIN-based payments solution using a POS terminal
Surety Bonds that allows ATM cardholders to use their cards as payment
Issuance of a surety bond to guarantee the principal’s for goods or services in select stores. It is riding on the
responsibility towards the obligee as required by law or BancNet electronic fund transfer–Point-Of-Sale (EFT-POS)
contract. system.

PAYMENT & SETTLEMENT SERVICES CASH MANAGEMENT SERVICES

China Bank Automated Teller Machine (ATM) China Bank Online Corporate
Self-service terminal providing 24/7 banking service like An internet-based banking channel for the business banking
cash withdrawal, balance inquiry, bills payment, and other needs of corporate customers. China Bank Online Corporate
transactions. China Bank ATM accepts China Bank TellerCard securely facilitates basic banking services, self-service
and other BancNet, Diner’s Club International, Discover, JCB, functionalities, and Cash Management Solutions.
KFTC, Mastercard, Unionpay and Visa cards. Selected China
Bank ATMs are also equipped for BEEP card reloading and Liquidity Management via China Bank Online Corporate
balance inquiry. Enables corporate customers have greater visibility and
control over their business liquidity to make informed
China Bank Cash Accept Machine (CAM) financial decisions.
Deposit-taking terminal for that facilitates cardless transaction • Sure Sweep - Experience faster and more efficient
and real-time crediting of deposits to a China Bank account. consolidation or distribution of funds for easier
CAM accepts old and new generation bills (PHP 100, 200, disbursement and better yields
500, 1,000). • Corporate Inter-Bank Fund Transfer - Transfer funds online
and real-time from your China Bank account to accounts in
China Bank Tellerphone other banks
A phone banking facility that allows clients to perform • Multi-Bank SOA Concentration (Available Soon) - Access
transactions anytime, anywhere via landline or cellphone, account balances, transaction reports, and account
including deposit account inquiry, fund transfer (to China Bank statements of your china bank accounts and other bank
accounts or to other local banks), bills payment, and more. accounts

China Bank Online Receivables Management

An internet-based banking channel that provides customers An automated collection solution to improve company
direct access to their accounts to do various banking receivables turnover and cash flow.
transactions via their personal computer, laptop, tablet, or • Automatic Debit Arrangement (ADA) - electronically initiate
mobile phone. Transactions include account viewing, funds collections from customers’ or subscribers’ enrolled
transfer (to China Bank accounts or to other local banks), bills deposit accounts
payment, UITF top-up, and more. • Check Depot - Enjoy the convenience of automatic
crediting of post-dated checks as they fall due

134 C H I N A B A N K I N G C O R P O R AT I O N
• Bills Pay Plus - Provide your customers with convenient • China Debit POS - Equip your business with the flexibility
payment options through China Bank’s vast network of to accept ATM and debit card payments
branches nationwide and 24/7 electronic banking channels • POS Cash Out - Provide your customers with the
• Referenced Deposit Solution - Provide your customers with convenience of cash withdrawals via a POS device, and at
convenient payment options, while making use of a deposit the same time, have an additional income channel
reference number, through China Bank’s vast network of
branches nationwide Trade and Settlement Solutions
• Smart Cash Safe Solution (Available Soon) - Deposit Services that streamline and accelerate the trade and
cash 24/7 via a cash accepting machine installed in your settlement life cycle of business.
premises • SCCP Broker’s Solution - Settle stock transactions with
• Check Pay Solution (Available Soon) - Manage your the securities clearing corporation of the Philippines via an
recurring collections in the form of PDCs issued by electronic platform. This solution facilitates net settlement
individual buyers and automate remittance of tax resulting of daily stock trade among stock brokerage firms of the
from sale of property. This solution comes with a special PSE.
checking account for buyers • Electronic Invoicing & Payment Solution (Available Soon)
- Reduce the time and cost of processing invoices. This
Payables Management solution automates and streamlines the presentation,
A payables solution for optimizing payment timing, reconciliation, and settlement of electronic invoices /
strengthening corporate cost management, and enhancing receivables.
operating margins
• Direct Debit Arrangement - Manage your recurring Government Payments and Collections
payments to vendors, suppliers, and utility companies via Online services for convenient government payments and
direct debit from your China Bank account collection directly from China Bank accounts.
• Auto Credit Arrangement (ACA) - Electronically remit same • Easy Tax Filing and Payment Solution - Electronically file
day or future dated payment instructions to the china bank and pay real property taxes
accounts of your payees • BIR eTax Payments - File and pay Bureau of Internal
• Check Writing Services - Free your company of the tedious Revenue (BIR) taxes
task of manually preparing a large number of checks o • eGov Payments - File and pay monthly contributions and
check write plus software - a stand-alone solution that loan payments to Social Security System (SSS), Philippine
automates the preparation of checks, vouchers, and reports Health Insurance Corporation (PhilHealth), and Pag-IBIG
• SSS Sickness, Maternity, and Employee Compensation
o Check Write Plus Outsourcing - Outsource the printing
(SSS SMEC) - Receive the SSS sickness, maternity and
and releasing of your corporate checks or China Bank
compensation benefit reimbursements of your employees
manager’s checks
via direct credit to your company’s China Bank account
o Check Write Plus Self-Service - A web-based solution
that automates the preparation of checks, vouchers, and CHINA BANK SECURITIES
reports
Stock Brokerage
• Payroll Services - Reduce administrative and manual Execution of secondary trade transactions covering peso
processes involved with paying your employee’s salaries and dollar-denominated stocks listed on the Philippine Stock
Exchange; participation in initial/secondary public offerings
o Payroll Crediting - A web-based solution for crediting your and follow-on offerings.
employees’ china bank payroll accounts directly
o China Pay Software - A stand-alone payroll & timekeeping Research Services
program that automates salary computation and pay slip Research reports covering listed companies, industry
and report generation sectors, stock market outlook, stock recommendations, daily/
weekly updates, among others.
o Payroll Processing - Outsource your entire payroll activity,
from the calculation of gross salary based on attendance
report up to generation of net pay, pay slips, internal and
statutory reports

POS Solutions
Solutions that make it easier for customers to do business
with companies.

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 GRI Content Index
102-55

For the Materiality Disclosures Service, GRI Services reviewed that the GRI content index is clearly presented and
the references for Disclosures 102-40 to 102-49 align with appropriate sections in the body of the report.

GENERAL DISCLOSURES

GRI STANDARD DISCLOSURE PAGE NUMBER AND/OR OMISSION

DIRECT ANSWERS
GRI 101: Foundation 2016
General disclosures
GRI 102: Organizational profile
General
102-1 Name of organization 2
Disclosures 2016
102-2 Activities, brands, products, and services 2, 127-135
102-3 Location of headquarters 2
102-4 Location of operations 2, 108-123
102-5 Ownership and legal form 2, 55
102-6 Markets served 2, 108-123
102-7 Scale of the organization 12, 59, 127-135
102-8 Information on employees and other 59
workers
102-9 Supply chain 47
102-10 Significant changes to the organization No significant changes are made to the
and its supply chain organization and its supply chain
102-11 Precautionary Principle or approach 44-53, 66
102-12 External initiatives 35
102-13 Membership of associations Trust Officers Association of the Philippines;
ACI Philippines; Association of Bank
Compliance Officers, Inc.; Association of
Bank Remittance Officers, Inc.; Association
of Philippine Correspondent Banking Officers,
Inc.; Bankers’ Association of the Philippines;
Bankers’ Institute of the Philippines,
Inc.; Bank Marketing Association of the
Philippines; Business Continuity Mangers
Association of the Philippines; Chamber
of Thrift Banks; Credit Card Association
of the Philippines; Credit Management
Association of the Philippines; Financial
Executives of the Philippines; Fund Managers
Association of the Philippines; Good
Governance Advocates and Practitioners of
the Philippines; Information Security Officers
Group; Investment House Association of the
Philippines Money Market Association of
National Advertisers; Personnel Management
Association; Philippine Business for
the Environment; Philippine Payments
Management, Inc.; Public Relations Society
of the Philippines; UNISDR Private Sector
Alliance for Disaster Resilient Societies;
Various Local Business Clubs
Strategy
102-14 Statement from senior decision-maker 4
102-15 Key impacts, risks, and opportunities 4
Ethics and Integrity
102-16 Values, principles, standards, and norms 3, 34-53
of behavior
102-17 Mechanisms for advice and concerns 35, 44-53
about ethics

136 C H I N A B A N K I N G C O R P O R AT I O N
GRI STANDARD DISCLOSURE PAGE NUMBER AND/OR OMISSION
DIRECT ANSWERS
Governance
102-18 Governance structure 36
102-19 Delegating authority 41
102-23 Chair of the highest governance body 38
102-24 Nominating and selecting the highest 38
governance body
102-28 Evaluating the highest governance body’s 39
performance
Stakeholder Engagement
102-40 List of stakeholder groups 20
102-41 Collective bargaining agreements 60
102-42 Identifying and selecting stakeholders 19
102-43 Approach to stakeholder engagement 20
102-44 Key topics and concerns raised 20
Reporting Practice
102-45 Entities included in the consolidated As listed in Note 1 of Financial Statement:
financial statements China Bank Insurance Brokers, Inc., CBC
Properties and Computer Center, Inc., China
Bank Savings, Inc., China Bank Capital
Corporation, CBC Assets One, Inc., China
Bank Securities Corporation.
102-46 Defining report content and topic 19, 21
boundaries
102-47 List of material topics 21
102-48 Restatements of information There are no restatements of information.
102-49 Changes in reporting There are no changes in reporting.
102-50 Reporting period Inside front cover
102-51 Date of most recent report Inside front cover
102-52 Reporting cycle Inside front cover
102-53 Contact point for questions regarding the 140
report
102-54 Claims of reporting in accordance with Inside front cover
the GRI standards
102-55 GRI Content Index Inside front cover, 136
102-56 External assurance This report is not externally assured.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 137
 GRI Content Index

MATERIAL TOPICS

GRI STANDARD DISCLOSURE PAGE NUMBER AND/OR OMISSION

DIRECT ANSWERS
GRI 200 Economic Standard Series
Economic Performance
GRI 103: 103-1 Explanation of the material topic and its Boundary 19
Management 103-2 The management approach and its components 65
Approach 2016 103-3 Evaluation of the management approach 65
GRI 201: Economic 201-1 Direct economic value generated and distributed 65
Performance 2016
Indirect Economic Impacts
GRI 103: 103-1 Explanation of the material topic and its Boundary 19
Management
Approach 2016 103-2 The management approach and its components 26-27
GRI 203: 203-2 Significant indirect economic impacts 14, 26-27
Indirect Economic
Impacts 2016
Anti-corruption
GRI 103: 103-1 Explanation of the material topic and its Boundary 19
Management 103-2 The management approach and its components 46
Approach 2016 103-3 Evaluation of the management approach 46
GRI 205: 205-2 Communication and training about anti-corruption 46
Anti-corruption policies and procedures
2016 205-3 Confirmed incidents of corruption and actions There are no confirmed incidents of
taken corruption.
GRI 300 Environmental Standard Series
Energy
GRI 103: 103-1 Explanation of the material topic and its Boundary 19
Management 103-2 The management approach and its components 66
Approach 2016 103-3 Evaluation of the management approach 66
GRI 302: 302-1 Energy consumption within the organization 66
Energy 2016 302-2 Energy consumption outside the organization 66
302-3 Energy Intensity 66
Water and Effluents
GRI 103: 103-1 Explanation of the material topic and its Boundary 19
Management 103-2 The management approach and its components 66-67
Approach 2016 103-3 Evaluation of the management approach 66-67
GRI 303: 303-1 Interactions with water as a shared resource China Bank’s branches source water
Water and Effluents from third-party providers. Water
2018 conservation measures are also in
place.
303-2 Management of water discharge-related impacts Effluents are treated or disposed
properly by the building owners as
China Bank are tenants.
303-5 Water consumption 67
Emissions
GRI 103: 103-1 Explanation of the material topic and its Boundary 19
Management 103-2 The management approach and its components 66
Approach 2016 103-3 Evaluation of the management approach 66
GRI 305: 305-1 Direct (Scope 1) GHG emissions No available data yet, but systems
Emissions 2016 are being put in place for data
gathering for the next reporting
cycle.
305-2 Energy indirect (Scope 2) GHG emissions 66
305-3 Other indirect (Scope 3) GHG emissions 66

138 C H I N A B A N K I N G C O R P O R AT I O N
 GRI STANDARD DISCLOSURE PAGE NUMBER AND/OR OMISSION
DIRECT ANSWERS
GRI 400 Social Standard Series
Employment
GRI 103: 103-1 Explanation of the material topic and its Boundary 19
Management 103-2 The management approach and its components 59-62
Approach 2016 103-3 Evaluation of the management approach 59-62
GRI 401: 401-1 New employee hires and employee turnover 59, 61-62
Employment 2016 401-2 Benefits provided to full-time employees that are 60
not provided to temporary or part-time employees
Occupational Health and Safety
GRI 103: 103-1 Explanation of the material topic and its Boundary 19
Management 103-2 The management approach and its components 61
Approach 2016 103-3 Evaluation of the management approach 61
GRI 403: 403-2 Types of injury and rates of injury, occupational 61
Occupational diseases, lost days, absenteeism, and number of
Health and Safety work-related fatalities
2016
Training and Education
GRI 103: 103-1 Explanation of the material topic and its Boundary 19
Management 103-2 The management approach and its components 61-62
Approach 2016 103-3 Evaluation of the management approach 61-62
GRI 404: 404-1 Average hours of training per year per employee 61
Training and 404-2 Programs or upgrading employee skills and 61
Education 2016 transition assistance programs
China Percent of the total number of employees eligible 61
Bank for apraisal
Indicator
Diversity and Equal Opportunity
GRI 103: 103-1 Explanation of the material topic and its Boundary 19
Management 103-2 The management approach and its components 59-60
Approach 2016 103-3 Evaluation of the management approach 59-60
GRI 405: 405-1 Diversity of governance bodies and employees 59
Diversity and Equal
Opportunity 2016
Local Communities
GRI 103: 103-1 Explanation of the material topic and its Boundary 19
Management 103-2 The management approach and its components 68-69
Approach 2016 103-3 Evaluation of the management approach 68-69
GRI 413: 413-1 Operations with local community engagement, 68
Local Communities impact assessments, and development programs
2016
Customer Privacy
GRI 103: 103-1 Explanation of the material topic and its Boundary
19
Management 103-2 The management approach and its components 31-32
Approach 2016 103-3 Evaluation of the management approach The management approach is
deemed successful since there are
no substantiated complaints on
breach of customer privacy.
GRI 418: Customer 418-1 Substantiated complaints concerning breaches of There were no substantiated
Privacy 2016 customer privacy and losses of customer data complaints on customer privacy
breach.

A N N UA L F I N A N C I A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 139
 Investor Information

ANNUAL STOCKHOLDERS’ MEETING INVESTOR INQUIRIES

102-53
June 18, 2020, Thursday, 4:00 p.m.
conducted virtually via We welcome inquiries from investors, analysts, and the financial
https://www.chinabank.ph/asm2020 community. For information about the developments
at China Bank, please contact:
SHAREHOLDER SERVICES
Alexander C. Escucha
For inquiries or concerns regarding dividend payments, account Senior Vice President and Head
status, change of address or lost or damaged stock certificates, Investor & Corporate Relations Group
please get in touch with: China Banking Corporation
28/F BDO Equitable Tower
Stocks and External Relations 8751 Paseo de Roxas
Office of the Corporate Secretary Makati City 1226, Philippines
China Banking Corporation Tel. No.: (+632) 8885-5609
11/F China Bank Building Email: investor-relations@chinabank.ph
8745 Paseo de Roxas cor. Villar St. Website: www.chinabank.ph
Makati City 1226, Philippines
CUSTOMER INFORMATION
Contact persons:
Atty. Angeli Anne L. Gumpal / Mr. Jaime G. Dela Cruz We welcome letters or all such communications on matters
pertaining to the management of the Bank, stockholders’ rights, or
Tel. No.: (+632) 8885-5132; 8230-6987 any other bank-related issues of importance. Stockholders who wish
Fax No.: (+632) 8885-5135 to communicate with any or all of the members of the China Bank
Email: aalgumpal@chinabank.ph Board of Directors may send letters to:
ocsstocks@chinabank.ph
Atty. Corazon I. Morando
Stock Transfer Service, Inc. Vice President and Corporate Secretary
Unit 34-D Rufino Pacific Tower
6784 Ayala Ave. China Banking Corporation
Makati City 1226, Philippines 11/F China Bank Building
8745 Paseo de Roxas cor. Villar St.
Contact persons: Makati City 1226, Philippines
Antonio M. Laviña
Ricardo D. Regala, Jr. Email: ocsstocks@chinabank.ph
aalgumpal@chinabank.ph
Tel. Nos.: (+632) 8403-2410; 8403-2412; 8403-9853
Fax No.: (+632) 8403-2414

140 C H I N A B A N K I N G C O R P O R AT I O N
 CHINA BANKING CORPORATION
China Bank Building
8745 Paseo de Roxas corner Villar Street
Makati City 1226, Philippines

www.chinabank.ph

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