China Construction Bank : Report for the Third Quarter of 2019

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document.

中國建設銀行股份有限公司

CHINA CONSTRUCTION BANK CORPORATION

(A joint stock company incorporated in the People's Republic of China with limited liability)

Stock Code: 939 (Ordinary H-share)

4606 (Offshore Preference Share)

REPORT FOR THE THIRD QUARTER OF 2019

The board of directors (the "Board") of China Construction Bank Corporation (the "Bank") is pleased to announce the unaudited consolidated results of the Bank and its subsidiaries (collectively the "Group") for the period ended 30 September 2019, prepared under the International Financial Reporting Standards (IFRS). This announcement is made in accordance with Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

1 IMPORTANT NOTICE

1. The Board and the board of supervisors of the Bank and its directors, supervisors and senior management warrant that the information contained in this quarterly report is truthful, accurate and complete and there are no false records or misleading statements contained in, or material omissions from, this report, and that they assume severally and jointly legal liability.
2. This quarterly report has been reviewed and approved at the Board meeting of the Bank held on 30 October 2019. A total of 12 directors of the Bank attended the meeting in person. Mr. Tian Guoli and Mr. Liu Guiping appointed Mr. Zhang Gengsheng as their proxy to attend the meeting and vote on their behalf by reason of other work engagement.
3. The financial statements in this quarterly report have not been audited.
4. Mr. Tian Guoli, legal representative of the Bank, Mr. Xu Yiming, chief financial officer of the Bank, and Mr. Fang Qiuyue, general manager of finance & accounting department of the Bank, hereby warrant the truthfulness, accuracy and completeness of the financial statements in this quarterly report.

2 CORPORATE PROFILE

2.1 Corporate information

	A-share stock abbreviation		建設銀行			Stock code		601939
	A-share listing stock exchange			Shanghai Stock Exchange
	H-share stock abbreviation		CCB			Stock code		939
	H-share listing stock exchange		The Stock Exchange of Hong Kong Limited
	Domestic preference shares
	abbreviation		建行優 1			Stock code		360030
	Domestic preference shares
	listing stock exchange			Shanghai Stock Exchange
	Offshore preference shares		CCB
	abbreviation		15USDPREF			Stock code		4606
	Offshore preference shares
	listing stock exchange		The Stock Exchange of Hong Kong Limited
	Contact person and contact
	information		Secretary to the Board		Company secretary
	Name		Hu Changmiao		Ma Chan Chi
	Customer service and
	complaints hotline			95533

Telephone: [phone]

Investor contact information Facsimile: 86-10-66218888E-mail address: [e-mail]

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2.2 Major financial information prepared under IFRS

The financial information set forth in this quarterly report is the consolidated results of the Group prepared under IFRS and expressed in RMB unless otherwise stated.

	(In millions of RMB unless			30 September			31 December
	otherwise stated)			2019				2018			Change (%)
Total assets	24,517,730		23,222,693			5.58
Total equity attributable to equity
	shareholders of the Bank	2,136,034		1,976,463			8.07
Net assets per share (in RMB)	8.29				7.65			8.37
				Three months	Change over	Nine months	Change over
				ended 30				the same	ended 30	the same
				September		period last	September	period last
				2019				year (%)	2019	year (%)
Operating income	167,146		6.91	511,533	6.78
Net profit	71,674		6.36	227,382	5.83
Net profit attributable to equity
	shareholders of the Bank	71,154		6.07	225,344	5.25
Net cash from operating activities		N/A				N/A	177,939	(76.11)
Basic and diluted earnings per
	share (in RMB)	0.28		3.70	0.90	4.65
					A decrease of				A decrease
						0.74				of 0.95
Annualised return on average				percentage				percentage
	equity (%)	14.13				points	15.13	points

2.3 Differences between the financial statements prepared under PRC GAAP and those prepared under IFRS

There is no difference in the net profit for the nine months ended 30 September 2019 or total equity as at 30 September 2019 between the Group's consolidated financial statements prepared under PRC GAAP and those prepared under IFRS.

2.4 Number of ordinary shareholders and particulars of ordinary shareholding as at 30 September 2019

2.4.1 As at 30 September 2019, the Bank had 350,336 ordinary shareholders, of whom 42,613 were holders of H-shares and 307,723 were holders of A-shares.

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2.4.2 Particulars of shareholding of top ten ordinary shareholders

Unit: share

Particulars of shareholding of top ten ordinary shareholders (based on the register of members as at 30 September 2019and confirmation of shareholders)

					Changes in
					shareholding					Number of
				Shareholding	during the					shares
	Name of ordinary		Nature of	percentage	reporting			Total number of		pledged
	shareholder		shareholder	(%)	period			shares held		or frozen
Central Huijin Investment		State	57.03	-			142,590,494,651(H-shares)		None
	Ltd. 1		0.08	-			195,941,976(A-shares)		None
HKSCC Nominees Limited 1,2		Foreign legal
	person	36.78	-4,676,375		91,961,999,824 (H-shares)		Unknown
China Securities Finance		State-owned
	Corporation Limited		legal person	0.88	-			2,189,259,768(A-shares)		None
China Baowu Steel Group		State-owned
	Corporation Limited 2		legal person	0.80	-			1,999,556,250(H-shares)		None
State Grid Corporation of		State-owned
	China 2,3		legal person	0.64	-			1,611,413,730(H-shares)		None
China Yangtze Power Co.,		State-owned
	Limited 2		legal person	0.35	-			865,613,000(H-shares)		None
			Foreign legal
Reca Investment Limited		person	0.34	-			856,000,000(H-shares)		None
Central Huijin Asset		State-owned
	Management Ltd. 1		legal person	0.20	-			496,639,800 (A-shares)		None
Hong Kong Securities		Foreign legal
	Clearing Company Ltd.1		person	0.17	-81,118,645		430,583,025 (A-shares)		None
National Social Security Fund
	Portfolio 106		State	0.06	+11,206,058			154,215,106 (A-shares)		None

1. Central Huijin Asset Management Ltd. is a wholly-owned subsidiary of Central Huijin Investment Ltd. HKSCC Nominees Limited is a wholly-owned subsidiary of Hong Kong Securities Clearing Company Ltd. Apart from these, the Bank is not aware of any connected relation or concerted action among the aforesaid shareholders.
2. As of 30 September 2019, State Grid Corporation of China and China Yangtze Power Co., Limited held 1,611,413,730 and 865,613,000 H-shares of the Bank respectively, all of which were held under the name of HKSCC Nominees Limited; China Baowu Steel Group Corporation Limited held 1,999,556,250 H-shares of the Bank, in which 599,556,250 were held under the name of HKSCC Nominees Limited. Save the aforesaid H-shares held by State Grid Corporation of China and China Yangtze Power Co., Limited, as well as 599,556,250 H-shares held by China Baowu Steel Group Corporation Limited, 91,961,999,824 H-shares were held under the name of HKSCC Nominees Limited, which also included the H-shares held by Temasek Holdings (Private) Limited.
3. As of 30 September 2019, the holding of H-shares of the Bank by State Grid Corporation of China through its wholly-owned subsidiaries was as follows: State Grid Yingda International Holdings Group Co., Ltd. held 54,131,000 shares, State Grid International Development Limited held 1,315,282,730 shares, Luneng Group Co., Ltd. held 230,000,000 shares and Shenzhen Guoneng International Trading Co., Ltd. held 12,000,000 shares.
4. None of the shares held by the aforesaid shareholders were subject to selling restrictions.

2.5 Number of preference shareholders and particulars of preference shareholding as at 30 September 2019

2.5.1 As at 30 September 2019, the Bank had 19 preference shareholders (or proxies), including one offshore preference shareholder (or proxy) and 18 domestic preference shareholders.

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2.5.2 Particulars of shareholding of top ten offshore preference shareholders (or proxies)

					Unit: share
			Changes in		Number of
		Shareholding	shareholding		shares
	Nature of	percentage	during the	Total number of	pledged or
Name of preference shareholder	shareholder	(%)	reporting period	shares held	frozen
The Bank of New York Depository	Foreign legal
(Nominees) Limited	person	100.00	-	152,500,000	Unknown

1. Particulars of shareholding of the preference shareholder were based on the information in the Bank's register of preference shareholders.
2. The register of non-public offshore preference shareholders presented the shareholding information of The Bank of New York Depository (Nominees) Limited as proxy of the preference shareholders in the clearing systems of Euroclear Bank S.A./N.V. and Clearstream Banking S.A. at the end of the reporting period.
3. The Bank is not aware of any connected relation or concerted action between the aforesaid preference shareholder and the top ten ordinary shareholders.
4. "Shareholding percentage" refers to the percentage of offshore preference shares held by the preference shareholder in the total number of offshore preference shares.

2.5.3 Particulars of shareholding of top ten (including ties) domestic preference shareholders

					Unit: share
			Changes in		Number of
		Shareholding	shareholding		shares
	Nature of	percentage	during the	Total number of	pledged or
Name of preference shareholder	shareholder	(%)	reporting period	shares held	frozen
Bosera Asset Management Co., Limited	Others	26.83	-	161,000,000	None
Manulife Teda Fund Management Co.,
Ltd.	Others	13.50	-9,000,000	81,000,000	None
China Mobile Communications Group	State-owned
Co., Ltd.	legal person	8.33	-	50,000,000	None
China Life Insurance Company Limited	Others	8.33	-	50,000,000	None
Truvalue Asset Management Co.,
Limited	Others	6.67	-	40,000,000	None
China CITIC Bank Corporation Limited	Others	5.00	-	30,000,000	None
GF Securities Asset Management
(Guangdong) Co., Ltd.	Others	4.50	-	27,000,000	None
Postal Savings Bank of China Co., Ltd.	Others	4.50	-	27,000,000	None
PICC Asset Management Company
Limited	Others	3.33	-	20,000,000	None
AXA SPDB Investment Managers Co.,
Ltd.	Others	3.33	-	20,000,000	None
E Fund Management Co., Ltd.	Others	3.33	-	20,000,000	None

1. Particulars of shareholding of the preference shareholders were based on the information in the Bank's register of preference shareholders.
2. The Bank is not aware of any connected relation or concerted action among the aforesaid preference shareholders, or between the aforesaid preference shareholders and the top ten ordinary shareholders.
3. "Shareholding percentage" refers to the percentage of domestic preference shares held by the preference shareholder in the total number of domestic preference shares.

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2.5.4 During the reporting period, there was no restoration of voting rights of the Bank's preference shares, nor distribution of dividend for preference shares. As reviewed and approved at the Board meeting on 30 October 2019, the Bank would distribute dividend for offshore preference shares on 16 December 2019, and the gross amount for dividend distribution is US$157,583,333.33 (equivalent to RMB1,112 million approximately). After withholding income tax, US$141,825,000 would be actually paid to the offshore preference shareholders, with an after-tax dividend rate of 4.65%. The dividend for domestic preference shares would be paid on 26 December 2019, and the gross amount for dividend distribution is RMB2,850 million (including tax), with a nominal dividend rate of 4.75%.

3 HIGHLIGHTS OF QUARTERLY RESULTS

3.1 Analysis of items in the statement of financial position

As at 30 September 2019, the Group's assets were RMB24,517,730 million, an increase of RMB1,295,037 million or 5.58% over the end of last year. The Group's liabilities were RMB22,364,764 million, an increase of RMB1,133,665 million or 5.34% over the end of last year.

Gross loans and advances to customers were RMB14,872,485 million, an increase of RMB1,089,432 million or 7.90% over the end of last year. In this amount, domestic corporate loans, personal loans and discounted bills of the Bank were RMB6,909,459 million, RMB6,312,746 million and RMB529,811 million respectively; loans made by overseas entities and subsidiaries were RMB1,080,695 million; accrued interest was RMB39,774 million.

Financial investments were RMB6,201,450 million, an increase of RMB486,541 million or 8.51% over the end of last year.

Deposits from customers were RMB18,463,826 million, an increase of RMB1,355,148 million or 7.92% over the end of last year. In this amount, domestic time deposits and demand deposits of the Bank were RMB7,845,537 million and RMB9,901,523 million respectively; domestic corporate deposits and personal deposits of the Bank were RMB9,074,615 million and RMB8,672,445 million respectively; deposits at overseas entities and subsidiaries were RMB522,178 million; accrued interest was RMB194,588 million.

Compared to the end of last year, the non-performing loans increased by RMB10,518 million to RMB211,399 million in accordance with the five-category loan classification standard. The non-performing loan ratio was 1.43%, down 0.03 percentage points from the end of last year. The ratio of allowances to non- performing loans was 218.28%, up 9.91 percentage points from the end of last year.

Total equity was RMB2,152,966 million, an increase of RMB161,372 million or 8.10% over the end of last year. In this amount, total equity attributable to equity

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shareholders of the Bank was RMB2,136,034 million, an increase of RMB159,571 million or 8.07% over the end of last year.

As at 30 September 2019, considering relevant rules for the transitional period, the Group's total capital ratio, Tier 1 ratio and Common Equity Tier 1 ratio, which were calculated in accordance with the Capital Rules for Commercial Banks (Provisional), were 17.30%, 14.50% and 13.96%, respectively, all in compliance with the regulatory requirements.

3.2 Analysis of items in the statement of comprehensive income

For the nine months ended 30 September 2019, the Group reaped net profit of RMB227,382 million, of which net profit attributable to equity shareholders of the Bank was RMB225,344 million, up 5.83% and 5.25% respectively over the same period last year. Annualised return on average assets was 1.27%, and annualised return on average equity was 15.13%.

Net interest income was RMB379,522 million, up 3.77% over the same period last year. Net interest spread was 2.12% and net interest margin was 2.27%, down 0.09 and 0.07 percentage points respectively from the same period last year, staying flat with the first half of the year.

Net fee and commission income was RMB108,968 million, up 12.89% over the same period last year. In this amount, bank card fees, electronic banking service fees, agency service fees and commissions on trust and fiduciary activities maintained relatively rapid growth compared to the same period last year as businesses in these areas kept sound development.

Operating expenses were RMB123,378 million, an increase of RMB7,749 million from the same period last year. Cost-to-income ratio increased by 0.04 percentage points to 23.24% over the same period last year.

Income tax expense was RMB50,742 million, an increase of RMB1,764 million from the same period last year, and the effective income tax rate was 18.24%.

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4 MAJOR ISSUES

4.1 Significant changes in major financial statements items, financial indicators and the causes thereof

√Applicable □Not applicable

	(In millions of RMB	30	31
	unless otherwise	September	December	Change
	stated)	2019	2018	(%)	Causes of the change
	Deposits with banks				The Group did not renew its time
	and non-bank				deposits with domestic banks upon
	financial				maturity, in order to support the
	institutions	333,743	486,949	(31.46)	development of the real economy.
					The positive fair value of foreign
					exchange related derivatives at the
					end of the period rose with increased
	Positive fair value of				fluctuations of foreign exchange
	derivatives	76,789	50,601	51.75	rates.
					This was mainly due to the increase
					in right-of-use assets as a result of
					the Bank's adoption of IFRS 16
					Leases from 1 January 2019, and the
					increase in continuing involvement
					assets related to asset securitisation
	Other assets	205,629	129,374	58.94	business, etc.
					Mainly because the amount of
					principal-guaranteed wealth
	Financial liabilities				management products dropped from
	measured at fair				the end of last year as affected by
	value through				the new regulatory rules on asset
	profit or loss	301,521	431,334	(30.10)	management.
					The negative fair value of foreign
					exchange related derivatives at the
					end of the period rose with increased
	Negative fair value				fluctuations of foreign exchange
	of derivatives	68,239	48,525	40.63	rates.
					This was mainly due to the increase
					in lease liabilities as a result of the
					Bank's adoption of IFRS 16 Leases
					from 1 January 2019, and the
					increase in continuing involvement
					liabilities related to asset
	Other liabilities	377,629	281,414	34.19	securitisation business, etc.
					Mainly affected by the increase in
	Other comprehensive				the fair value of investment in debt
	income	29,181	18,451	58.15	securities.

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	Nine months	Nine months
(In millions of RMB	ended	ended
unless otherwise	30 September	30 September	Change
stated)	2019	2018	(%)	Causes of the change
				Mainly due to the increase in
				valuation gains on funds and
Net gain arising				equity investments with the
from investment				fluctuations of the stock
securities	7,685	4,217	82.24	market.
Net gain/(loss) on				Mainly due to the increase in
derecognition of				gains on loan derecognition in
financial assets				the issuance of asset-backed
measured at				securities compared to the
amortised cost	2,216	(2,497)	N/A	same period last year.
				It was mainly due to the
				increase in the impairment
				allowances for precious metals
Others impairment				leasing with the growth of
losses	(253)	840	N/A	business size.
				It was mainly due to the
				increase in net profit of CCB
Non-controlling				Life over the same period last
interests	2,038	748	172.46	year.

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1. Progress of major issues, related impacts and solutions □Applicable √Not applicable
2. Unfulfilled undertakings overdue in the reporting period □Applicable √Not-applicable
3. Implementation of cash dividend policy during the reporting period √Applicable □Not applicable

The Bank distributed the 2018 cash dividend of RMB0.306 per share (including tax), totalling RMB2,936 million approximately, on 10 July 2019 to its A-share holders; it distributed the 2018 cash dividend of RMB0.306 per share (including tax), totalling RMB73,568 million approximately, on 30 July 2019 to its H-share holders.

4.5 Alerts and explanations of any forecasted loss or significant changes compared to the same period last year in accumulated net profit for the period from the beginning of the year to the end of the next reporting period

□Applicable √Not applicable

4.6 Changes in accounting policies √Applicable □Not applicable

From 1 January 2019, the Group has adopted International Financial Reporting Standard No. 16 - Leases issued by International Accounting Standards Board in 2016. This constitutes changes in accounting policies. Please refer to the Half-Year Report 2019 of the Bank for relevant information.

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5 RELEASE OF QUARTERLY REPORT

This quarterly report will be published on the "HKEXnews" website of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the website of the Bank (www.ccb.com) at the same time. The quarterly report prepared under PRC GAAP will also be published on the websites of the Shanghai Stock Exchange (www.sse.com.cn) and the Bank (www.ccb.com) at the same time.

By order of the Board

China Construction Bank Corporation

Liu Guiping

Vice chairman, executive director and president

30 October 2019

As of the date of this announcement, the executive directors of the Bank are Mr. Tian Guoli, Mr. Liu Guiping and Mr. Zhang Gengsheng; the non-executive directors of the Bank are Ms. Feng Bing, Mr. Zhu Hailin, Mr. Wu Min, Mr. Zhang Qi, Mr. Tian Bo and Mr. Xia Yang; and the independent non-executive directors of the Bank are Ms. Anita Fung Yuen Mei, Sir Malcolm Christopher McCarthy, Mr. Carl Walter, Mr. Kenneth Patrick Chung and Mr. Graeme Wheeler.

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APPENDIX 1 FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH IFRS

China Construction Bank Corporation

Consolidated statement of comprehensive income For the nine months ended 30 September 2019 (Expressed in millions of RMB, unless otherwise stated)

	Nine months ended		Three months from
			30 September		1 July to 30 September
	2019	2018	2019	2018
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Interest income	657,416	604,759	224,970	209,439
Interest expense	(277,894)		(239,034)		(95,884)		(83,200)
Net interest income	379,522	365,725	129,086	126,239
Fee and commission income	120,127	106,204	35,960	30,833
Fee and commission expense	(11,159)		(9,676)		(3,687)		(3,309)
Net fee and commission income	108,968	96,528	32,273	27,524
Net trading gain	7,230	8,660	2,372	748
Dividend income	655	671	241	259
Net gain arising from investment
securities	7,685	4,217	1,144	1,098
Net gain/(loss) on derecognition of
financial assets measured at
amortised cost	2,216	(2,497)	781	(132)
Other operating income, net:
- Other operating income	33,977	28,395	12,472	4,892
- Other operating expense	(28,720)		(22,634)		(11,223)		(4,292)
Other operating income, net	5,257	5,761	1,249	600
Operating income	511,533	479,065	167,146	156,336
Operating expenses	(123,378)		(115,629)		(44,829)		(40,948)
	388,155	363,436	122,317	115,388
Credit impairment losses	(109,943)	(100,611)	(35,305)	(33,582)
Other impairment losses	(253)	840	(105)	591
Share of profits of associates and joint
ventures	165	169	37	17
Profit before tax	278,124	263,834	86,944	82,414
Income tax expense	(50,742)		(48,978)		(15,270)		(15,023)
Net profit	227,382	214,856	71,674	67,391

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China Construction Bank Corporation

Consolidated statement of comprehensive income (continued)

For the nine months ended 30 September 2019

(Expressed in millions of RMB, unless otherwise stated)

	Nine months ended		Three months from
			30 September		1 July to 30 September
	2019	2018	2019	2018
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Other comprehensive income:
(1) Other comprehensive
income that will not be
reclassified to profit or
loss
Remeasurements of post-
employment benefit
obligations	110	(178)	-	-
Fair value changes of
equity instruments
designated as measured at
fair value through other
comprehensive income	580	(53)	262	(20)
Others	(3)		(5)		-		-
Subtotal	687	(236)	262	(20)

1. Other comprehensive income that may be

reclassified subsequently
to profit or loss
Fair value changes of debt
instruments measured at
fair value through other
comprehensive income	5,363	19,087	5,531	4,113
Allowances for credit losses
of debt instruments
measured at fair value
through other
comprehensive income	1,835	(644)	476	(483)
Reclassification
adjustments included in
profit or loss due to
disposals	(167)	(186)	(74)	(84)
Net loss on cash flow hedges	(189)	(239)	(15)	103
Exchange difference on
translating foreign operations	2,992		2,775		3,068		3,325
Subtotal	9,834	20,793	8,986	6,974
Other comprehensive income
for the period, net of tax	10,521	20,557	9,248	6,954

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China Construction Bank Corporation

Consolidated statement of comprehensive income (continued)

For the nine months ended 30 September 2019

(Expressed in millions of RMB, unless otherwise stated)

		Nine months ended		Three months from
				30 September		1 July to 30 September
		2019	2018	2019	2018
		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Total comprehensive income
for the period	237,903	235,413	80,922	74,345
Net profit attributable to:
Equity shareholders of the
Bank	225,344	214,108	71,154	67,081
Non-controlling interests	2,038		748		520		310
		227,382	214,856	71,674	67,391
Total comprehensive income
attributable to:
Equity shareholders of the
Bank	236,074	234,429	80,278	73,857
Non-controlling interests	1,829		984		644		488
		237,903	235,413	80,922	74,345
Basic and diluted earnings
per share
(in RMB Yuan)		0.90		0.86		0.28		0.27

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China Construction Bank Corporation

Consolidated statement of financial position

As at 30 September 2019

(Expressed in millions of RMB, unless otherwise stated)

		30 September		31 December
		2019	2018
		(Unaudited)		(Audited)
Assets:
Cash and deposits with central banks	2,378,819	2,632,863
Deposits with banks and non-bank financial institutions	333,743	486,949
Precious metals	43,176	33,928
Placements with banks and non-bank financial institutions	407,211	349,727
Positive fair value of derivatives	76,789	50,601
Financial assets held under resale agreements	198,220	201,845
Loans and advances to customers	14,412,293	13,365,430
Financial investments
Financial assets measured at fair value through profit or
loss	683,673	731,217
Financial assets measured at amortised cost	3,742,147	3,272,514
Financial assets measured at fair value through other
comprehensive income	1,775,630	1,711,178
Long-term equity investments	10,360	8,002
Fixed assets	165,727	169,574
Land use rights	13,744	14,373
Intangible assets	3,542	3,622
Goodwill	2,837	2,766
Deferred tax assets	64,190	58,730
Other assets	205,629		129,374
Total assets		24,517,730		23,222,693

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China Construction Bank Corporation

Consolidated statement of financial position (continued)

As at 30 September 2019

(Expressed in millions of RMB, unless otherwise stated)

		30 September		31 December
		2019	2018
		(Unaudited)		(Audited)
Liabilities:
Borrowings from central banks	437,034	554,392
Deposits from banks and non-bank financial institutions	1,186,073	1,427,476
Placements from banks and non-bank financial institutions	454,950	420,221
Financial liabilities measured at fair value through profit or
loss	301,521	431,334
Negative fair value of derivatives	68,239	48,525
Financial assets sold under repurchase agreements	34,446	30,765
Deposits from customers	18,463,826	17,108,678
Accrued staff costs	32,480	36,213
Taxes payable	72,056	77,883
Provisions	39,221	37,928
Debt securities issued	896,897	775,785
Deferred tax liabilities	392	485
Other liabilities	377,629		281,414
Total liabilities	22,364,764	21,231,099

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China Construction Bank Corporation

Consolidated statement of financial position (continued)

As at 30 September 2019

(Expressed in millions of RMB, unless otherwise stated)

		30 September		31 December
		2019	2018
		(Unaudited)		(Audited)
Equity:
Share capital	250,011	250,011
Other equity instruments
Preference shares	79,636	79,636
Capital reserve	134,537	134,537
Other comprehensive income	29,181	18,451
Surplus reserve	223,231	223,231
General reserve	280,058	279,725
Retained earnings	1,139,380		990,872
Total equity attributable to equity shareholders of the Bank	2,136,034	1,976,463
Non-controlling interests	16,932		15,131
Total equity	2,152,966	1,991,594
Total liabilities and equity		24,517,730		23,222,693

Approved and authorised for issue by the Board of Directors on 30 October 2019.

Liu Guiping	Kenneth Patrick Chung	Carl Walter
Vice Chairman, executive	Independent non-executive	Independent non-executive
director and president	director	director

17

China Construction Bank Corporation

Consolidated statement of cash flows

For the nine months ended 30 September 2019

(Expressed in millions of RMB, unless otherwise stated)

	Nine months ended 30 September
	2019	2018
	(Unaudited)		(Unaudited)
Cash flows from operating activities
Profit before tax	278,124	263,834
Adjustments for:
− Credit impairment losses	109,943	100,611
− Other impairment losses	253	(840)
− Depreciation and amortisation	17,140	12,502
− Interest income from impaired financial assets	(2,183)	(2,271)

• Revaluation gain on financial instruments at fair

value through profit or loss	(2,944)	(905)
− Share of profits of associates and joint ventures	(165)	(169)
− Dividend income	(655)	(671)
− Unrealised foreign exchange gain	(5,165)	(7,376)
− Interest expense on bonds issued	13,075	8,890

• Interest income from investment securities and net

income from disposal

(143,815)

(4,217)

• Net gain on disposal of fixed assets and other

long-term assets

(82)

(57)

263,526369,331

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China Construction Bank Corporation

Consolidated statement of cash flows (continued) For the nine months ended 30 September 2019 (Expressed in millions of RMB, unless otherwise stated)

Nine months ended 30 September

20192018

(Unaudited) (Unaudited)

Cash flows from operating activities (continued)
Changes in operating assets:
Net decrease in deposits with central banks and with banks
and non-bank financial institutions	214,406	390,342
Net (increase)/decrease in placements with banks and
non-bank financial institutions	(69,463)	32,265
Net increase in loans and advances to customers	(1,090,161)	(835,434)
Net decrease/(increase) in financial assets held under
resale agreements	4,070	(108,112)
Net (increase)/decrease in financial assets held
for trading purposes	(20,206)	6,446
Net (increase)/decrease in other operating assets	(135,826)		77,949
	(1,097,180)	(436,544)
Changes in operating liabilities:
Net decrease in borrowings from central banks	(115,211)	(8,785)
Net increase/(decrease) in placements from banks and non-
bank financial institutions	19,776	(2,146)
Net increase in deposits from customers and from banks
and non-bank financial institutions	1,057,091	816,525
Net increase/(decrease) in financial assets sold under
repurchase agreements	2,785	(40,621)
Net increase in certificates of deposit issued	108,716	95,787
Income tax paid	(66,957)	(47,923)
Net (decrease)/increase in financial liabilities measured at
fair value through profit or loss	(128,982)	9,426
Net increase/(decrease) in other operating liabilities	134,375		(10,184)
	1,011,593	812,079
Net cash from operating activities	177,939	744,866

19

China Construction Bank Corporation

Consolidated statement of cash flows (continued) For the nine months ended 30 September 2019 (Expressed in millions of RMB, unless otherwise stated)

Nine months ended 30 September

20192018

(Unaudited) (Unaudited)

Cash flows from investing activities
Proceeds from sales and redemption of financial	1,352,746	1,589,865
investments
Dividends received	651	606
Proceeds from disposal of fixed assets and other long-	2,720	5,280
term assets
Purchase of investment securities	(1,648,441)	(1,918,727)
Purchase of fixed assets and other long-term assets	(11,906)	(10,758)
Acquisition of subsidiaries, associates and joint ventures	(2,609)		(886)
Net cash used in investing activities	(306,839)	(334,620)
Cash flows from financing activities
Issue of bonds	48,301	75,592
Consideration paid for acquisition of non-controlling	-	(104)
interests
Dividends paid	(76,523)	(72,833)
Repayments of borrowings	(53,065)	(6,306)
Interest paid on bonds issued	(7,938)	(4,364)
Cash payment for other financing activities	(5,143)		-
Net cash used in financing activities	(94,368)	(8,015)

20

China Construction Bank Corporation

Consolidated statement of cash flows (continued) For the nine months ended 30 September 2019 (Expressed in millions of RMB, unless otherwise stated)

		Nine months ended 30 September
		2019	2018
		(Unaudited)		(Unaudited)
Effect of exchange rate changes on cash and cash
equivalents	11,082	16,850
Net (decrease)/increase in cash and cash equivalents	(212,186)	419,081
Cash and cash equivalents as at 1 January	860,702		571,339
Cash and cash equivalents as at 30 September	648,516	990,420
Cash flows from operating activities include:
Interest received	514,397	598,327
Interest paid, excluding interest expense on bonds
issued		(256,102)		(238,530)

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APPENDIX 2 CAPITAL AND LIQUIDITY INFORMATION

1. Capital adequacy ratios

According to the regulatory requirements, commercial banks shall calculate and disclose capital adequacy ratios in accordance with the Capital Rules for Commercial Banks (Provisional). The Group commenced to implement the advanced measurement approach for capital management from 2 April 2014. In this approach, the Group has elected to use foundation internal ratings-based approach for corporate credit risks exposure that meet regulatory requirements, internal ratings-based approach for retail credit risk exposures, internal models approach for market risk, and standardised approach for operational risk in the calculation of the relevant capital charges. Pursuant to the regulatory requirements, the Group calculates capital adequacy ratios with both the advanced approach and other approaches for capital measurement, and complies with the relevant requirements for capital floors.

Capital adequacy ratios calculated in accordance with the Capital Rules for Commercial Banks (Provisional)

	(In millions of RMB, except			As at 30 September 2019			As at 31 December 2018
	percentages)			Group			Bank			Group			Bank
Common Equity Tier 1 capital	2,046,426		1,898,173		1,889,390		1,766,840
Tier 1 capital	2,126,153		1,969,693		1,969,110		1,838,956
Total capital	2,535,703		2,371,995		2,348,646		2,215,308
Risk-weighted assets	14,661,444		13,757,162		13,659,497		12,863,070
Common Equity Tier 1 ratio	13.96%	13.80%	13.83%	13.74%
Tier 1 ratio	14.50%	14.32%	14.42%	14.30%
Total capital ratio	17.30%	17.24%	17.19%	17.22%

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2. Leverage ratio

As at 30 September 2019, in accordance with the Measures for the Administration of the Leverage Ratio of Commercial Banks (Revised), the Group's leverage ratio was 8.27%, meeting the regulatory requirements.

The Group's leverage ratio calculated in accordance with the Measures for the Administration of the Leverage Ratio of Commercial Banks (Revised)

	(In millions of RMB, except	As at 30	As at 30 June	As at 31	As at 31
	percentages)	September 2019	2019	March 2019	December 2018
Leverage ratio	8.27%	7.98%	8.05%	8.05%
Tier 1 capital after deduction	2,126,153	2,045,186	2,042,655	1,969,110
On and off-balance sheet
	assets after adjustments	25,720,002	25,616,737	25,383,975	24,460,149

3. Liquidity coverage ratio

According to the requirements of the Measures on Information Disclosure of Liquidity Coverage Ratio of Commercial Banks, commercial banks shall disclose the average daily liquidity coverage ratio for the quarter. In accordance with the current applicable regulatory requirements, definitions and accounting standards, the average daily liquidity coverage ratio of the Group for the 92 days in the third quarter of 2019 was 138.83%, meeting the regulatory requirements. The liquidity coverage ratio dropped by 5.05 percentage points from the second quarter of 2019, mainly due to the decrease of qualified and high-qualityliquid assets.

23

			Value before	Value after
No.	(In millions of RMB, except percentages)	translation	translation
	Qualified and high-quality liquid assets
1	Qualified and high-quality liquid assets		4,196,573
	Cash outflows
		Deposits from retail and small enterprise
2	customers, including:	8,513,117	722,336
3	Stable deposits	2,579,474	128,972
4	Deposits with a low degree of stability	5,933,643	593,364
		Unsecured (unpledged) wholesale financing,
5	including:	9,093,781	2,957,777
		Business relations deposits (excluding agent
6	bank business)	6,258,331	1,554,524
		Non-business relations deposits (all
7	counterparties)	2,752,295	1,320,098
8	Unsecured (unpledged) debts	83,155	83,155
9	Secured (pledged) financing		825
10	Other items, including:	1,690,057	201,520
		Cash outflows related to the requirement of
11	derivatives and other collaterals (pledges)	50,689	50,689
		Cash outflows related to financing loss of
12	mortgage (pledged) debt instruments	11,156	11,156
13	Credit facilities and liquidity facilities	1,628,212	139,675
14	Other contractual financing obligations	40	-
15	Contingent financing obligations	3,321,577	380,823
16	Total amount of expected cash outflows		4,263,281
	Cash inflows
		Mortgage (pledged) lending (including reverse
17	repurchase and borrowed securities)	249,952	241,103
18	Cash inflow from normal full settlement	1,448,680	939,117
19	Other cash inflows	59,519	55,487
20	Total amount of expected cash inflows	1,758,151	1,235,707
				Value after
				adjustment
21	Qualified and high-quality liquid assets		4,196,573
22	Net cash outflows		3,027,574
23	Liquidity coverage ratio (%)		138.83%

24