2017 Annual Financial

and Sustainability Report

 i

ABOUT THE REPORT

102-50, 102-51 102-52, 102-54, 102-55

China Bank embarks on another milestone as we produce our first

Annual Financial and Sustainability Report. Our goal is to provide
a holistic understanding of how we embed sustainability into our
operations to deliver strong results while creating value for society. CONTENTS
This report covers our financial and non-financial performance from About this Report IFC
January 1, 2017 to December 31, 2017. We aligned the narrative to our About China Bank , Vision, Mission,
contributions to the 17 Sustainable Development Goals (SDGs) of the and Core Values 1
United Nations through the products and services we provide. We took Journey to 100 Years 2
a systematic reporting approach in embedding sustainability into our Financial Highlights 4
operations, including developing a sustainability strategy that reflects Non-Financial Highlights 6
our commitment to contribute more to the achievement of the SDGs. Foundations for Sustainable Growth 8
Message to Our Stakeholders 10
This report has been prepared in accordance with the Global Reporting Business Review 18
Initiatives (GRI) Standards: Core option. In the process, we have Driving Sustainable Economic Progress 18
successfully completed the GRI Materiality Disclosures services, Growing and Preserving Assets 28
which verifies that the General Standard Disclosures 102-40 to 102-49 Fostering Financial Inclusion 34
were correctly located in both the GRI Content Index (pages 237-240) Environmental, Social, and Governance 44
and in the text of this report. Board of Directors 82
Management Committee 86
Senior Officers 88
Management Directory 90
Awards and Distinctions 91
Financial Statements 92
China Bank Branches 212
China Bank Savings Branches 221
China Bank Off-Branch ATMs 226
Business Offices 231
Subsidiaries and Affiliate 232
Product and Services 235
Investor Information 236
GRI Index 237

ABOUT THE COVER

For nearly a century, China Bank’s unique place in Philippine economic history and the
banking industry has been characterized by its rich heritage, timeless values, enduring
partnerships, principled banking, service excellence, and value creation. The solid
foundation underlies the story of continued growth, network expansion, technology
and innovation, and business diversification as we pursue our goal of becoming a more
effective enabler of our customers’ success, and continue to be the best bank for them.
The year 2017, with its record of performance, transition and preparation for future growth,
marks another milestone in that continuing story—quietly symbolized by a simple scroll
sealed with the auspicious symbol of the Lu, denoting prosperity and good fortune.
 China Bank at a Glance 1

ABOUT CHINA BANK VISION

102-1, 102-2, 102-3, 102-4, 102-6 102-16

Drawing strength from our rich history,

China Banking Corporation (China Bank) is one of the leading private universal we will be the best, most admired, and
banks in the Philippines. We offer a full range of banking products and services to innovative financial services institution,
institutional (corporate, middle market/commercial, SMEs) and individual (retail, mass partnering with our customers,
affluent, high net worth) customers, as well as thrift banking, investment banking, employees, and shareholders in wealth
insurance brokerage, and bancassurance through our subsidiaries China Bank and value creation.
Savings, China Bank Capital, China Bank Securities, China Bank Insurance Brokerage,
and affiliate Manulife China Bank Life Assurance.
MISSION
Established in 1920 as the first privately-owned local commercial bank, China Bank
has an in-depth understanding of the way entrepreneurs and businessmen do We will be a leading provider of
business. While maintaining very close multi-generational relationships with the quality services consistently delivered
Chinese-Filipino community, we have since expanded the scope of our products and to institutions, entrepreneurs, and
services to cover all market segments as we pursue ways to create greater value for individuals here and abroad, to meet
the future. their financial needs and exceed
their rising expectations. We will be
The China Bank stock (PSE: CHIB) is listed on the Philippine Stock Exchange (PSE). We a primary catalyst in the creation of
are a member of the SM Group, one of the largest conglomerates in the Philippines. wealth for our customers, driven by a
desire to help them succeed, through a
Headquarters: China Bank Building, 8745 Paseo de Roxas corner Villar St., highly engaged team of competent and
Makati City 1226 Philippines 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,
596 888 China Bank Online, employees, shareholders, and the
branches ATMs China Bank Mobile App,
China Bank TellerPhone communities we serve.

9,124 1.3 million CORE VALUES

employees customers
• Integrity
• High Performance Standards
• Commitment to Quality
P7.5B P84B • Customer Service Focus
P751B
Net income Capital Assets • Concern for People
+16% +32% +19% • Efficiency
• Resourcefulness / Initiative

P635B P454B
Deposits Gross
+17% Loans
+17%

“Baa2” Best in corporate

Investment grade governance
credit rating Among the top 5
from Moody’s publicly-listed companies in the
Philippines for 6 straight years
2 China Bank Annual Financial and Sustainability Report 2017

JOURNEY TO 100 YEARS

1945
Reopens in July;
lends to key
industries for post-
war reconstruction
1920 1990
Opens for business 1931
The Great Depression Head office
on August 16, 1920
Founders: hits the Philippine 1968 officially transfers
banking sector; hit by Becomes the first to Makati
Dee C. Chuan,
Don Albino Sycip, runs, a rival bank goes bank in Southeast
and a group under, but China Bank Asia to process
of top Chinese weathers the crisis accounts online
businessmen unshaken

1927 1948
Is listed on the Opens first
Manila Stock 1935 branch in Cebu
Exchange P21.5M in
resources and one
of the country’s
biggest banks 1988
1942 Introduces
The Japanese military TellerPhone, the
shuts down China Bank first phone banking
in April, liquidates its service in the country
assets, and
arrests Don Albino and
George Dee Se Kiat
 China Bank at a Glance 3

2007
• Acquires Manila 2017
Banking Corp. and 2015 • Celebrates 90th
operates it as a • Launches investment listing anniversary
savings bank house subsidiary, • Gets investment
arm, China Bank China Bank Capital grade credit rating
1997 Savings (CBS) • Launches credit card from Moody’s
Best capitalized
bank during the
• Signs bancassurance 2012 business • Raises P15B from
joint venture with Acquires stock rights offer
Asian Financial Manulife Pampanga-based
Crisis, after a 2
Unity Bank
for every 3 shares
stock rights
offering

2006 2016
Completes first China Bank Capital
international US$53M 2014 acquires stock
secondary share • Acquires Planters brokerage house ATC
offering Development Bank Securities, renamed
• Raises P8B from stock China Bank Securities
rights offer
1996
Accesses the offshore
capital markets with
US$50M floating rate
certificates of deposit
(and US$75M in 1997)
4 China Bank Annual Financial and Sustainability Report 2017

FINANCIAL HIGHLIGHTS
102-7

2015 2016 2017

FOR THE YEAR (IN THOUSAND PESOS)

Net Interest Income 15,085,184 16,694,195 19,626,403
Non-Interest Income 4,487,142 5,094,746 6,101,694
Operating Income 19,572,326 21,788,941 25,728,097
Provision for Impairment & Credit Losses 966,574 850,546 754,171
Operating Expenses 12,193,207 13,350,873 15,961,818
Net Income Attributable to Equity Holders of the Parent Bank 5,606,666 6,458,296 7,513,972
AT YEAR END (IN THOUSAND PESOS)
Total Resources 526,826,963 633,198,011 751,447,510
Loan Portfolio (Net) 309,761,777 386,827,300 448,970,942
Investment Securities 71,209,973 98,982,422 127,970,546
Total Deposits 439,265,686 541,583,018 635,093,393
Stockholders’ Equity 59,170,904 63,386,204 83,655,497
Number of Branches 517 541 596
Number of ATMs 740 805 888
Number of Employees 7,540 8,124 9,124
KEY PERFORMANCE INDICATORS (IN %)
Profitability
Return on Average Equity 9.62 10.42 10.01
Return on Average Assets 1.17 1.16 1.12
Net Interest Margin 3.37 3.20 3.11
Cost to Income Ratio 62.30 61.27 62.04
Liquidity
Liquid Assets to Total Assets 36.09 34.39 36.40
Loans (net) to Deposit Ratio 70.52 71.43 70.69
Asset Quality
Gross Non-Performing Loans Ratio 2.53 1.86 1.41
NPL Cover 87.33 91.00 99.02
Capitalization
Capital Adequacy Ratio (CET 1/Tier 1) 12.58 11.30 13.47
Capital Adequacy Ratio (Total CAR) 13.50 12.21 14.22
SHAREHOLDER INFORMATION
Market Value
Market Price Per Share (In Pesos) 30.381/ 33.511/ 33.30
Market Capitalization (In Thousand Pesos) 68,958,700 76,077,058 89,402,898
Valuation
Earnings Per Share (In Pesos) 2.501/ 2.881/ 2.91
Book Value Per Share (In Pesos) 26.07 1/
27.921/ 31.16
Price to Book Ratio (x) 1.17 1.20 1.07
Price to Earnings Ratio 12.15 11.64 11.44
Dividends
Cash Dividends Paid (In Thousand Pesos) 1,716,414 1,853,728 1,988,719
Cash Dividends Per Share (In Pesos) 1.00 1.00 0.80
Cash Payout Ratio (In %) 33.54 33.06 30.79
Cash Dividend Yield (In %) 2.91% 3.09% 2.36%
Stock Dividends Paid (In Pesos) 1,373,142 1,482,993 1,988,729
Stock Dividends Per Share (in %) 8.00 8.00 8.00
1/ Restated to show the cumulative effects of stock dividends & stock rights
 Performance Highlights 5

NET INCOME TOTAL RESOURCES STOCKHOLDERS’ EQUITY

In Billion Pesos In Billion Pesos In Billion Pesos

8.0 800.0 90.0

7.0 700.0 80.0

7.5

83.7
751.4
70.0
6.0 600.0
6.5

633.2
60.0

63.4
5.0 500.0
5.6

59.2
526.8
5.1
5.1

50.0

56.6
471.2
4.0 400.0
40.0
413.7

45.4
3.0 300.0
30.0
2.0 200.0 20.0
1.0 100.0 10.0

0 0 0
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

DEPOSITS BRANCHES ATM TOTAL CAR

In Billion Pesos In Percent

700.0 900 900 18.0

888

800 800 16.0

600.0
635.1

805

15.39
700 700 14.0

14.88
740

14.22
500.0
541.6

13.50
600 600 12.0
661

12.21
596

400.0 10.0
439.3

500 500
561

541
399.3

517

8.0
470

400 400
354.3

300.0
300 300 6.0
367

200.0
200 200 4.0
100.0 100 100 2.0

0 0 0 0
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

RETURN ON EQUITY DIVIDENDS PAID MARKET CAPITALIZATION

In Percent In Billion Pesos In Billion Pesos
CASH STOCK
12 2.5 2.5 100
90
11.31

10
89.4

2.0 80
10.42

84.2

2.0
10.01
9.91

2.0
2.0

80.7

70
1.9

76.1

8
9.62

1.7

69.0

1.5 60
1.6
1.6

1.5

6 1.5 50
1.4
1.3

1.3

1.0 40
4
30
0.5
0.5 20
2
10
0 0 0 0
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
 6 China Bank Annual Financial and Sustainability Report 2017

NON-FINANCIAL HIGHLIGHTS
102-7

P796 Billion
Total Fund Mobilized for SDGs

P141 Billion P655 Billion

Total Disbursed through Direct Loans Total Funds and Capital Raised for Clients

28% Power 24% Sustainable 20% Infrastructure 78% Infrastructure 22% Power
Generation Communities Development Generation

9% Food and 7% Sustainable 12% Others*

Agriculture Energy
Note: DepEd and Real Estate not included in the total disbursed amount

*Water and Sanitations Systems, Education, Sustainable Mobility, Nutrition, Health

and Wellness, Micro & Small Business Loan, Climate and Disaster Resilience

Driving 6% 141% P258 Billion P805 Billion

Increase in volume Increase in volume Loan Portfolio Worth of Total
Economic Issuances
Progress Cash Management Syndicated & Term Loans & Equity Raising/IPO
SME Loans Transactions Securitized Loans Project Finance Bond Issuances
16%
Increase in
number of lives
covered
Growing 14% 13% Life &
and Increase in number of Increase in number of
Non-life
Preserving UITF Accounts Retirement Accounts
insurance
Assets UITFs Pension Fund

53%
Fostering
11% 23% 31% P1.4 Billion 14% 113% Increase in
Increase in Increase in Increase in Loans released Increase Increase in total claims
Financial customers volume volume to DepEd in credit card remittance volume
Inclusion employees gross billings
Remittance
Deposit Accounts Real Estate Loans Vehicle Loans Civil Servants Loans Cards & Payments Services
 Performance Highlights 7

Revised ESG Scorecard:

ASPECT 2017 PERFORMANCE ASPECT 2017 PERFORMANCE

Economic Social

Value Generated (in billion pesos) 32.64 Total Employees 9,124

Value Distributed (in billion pesos) 29.09 By Gender

Value Retained (in billion pesos) 3.55 Male 2,917

Female 6,207
Environment By Rank
GHG Emissions (Tonnes CO2e)
Rank and File 5,982
Scope 2 3,425
Junior Officers 2,835
Scope 3 645
Senior Officers 307
GHG Intensity (Tonnes CO2e/in billion pesos revenue) 124.68
Attrition Rate
3.42%
Average Electricity Consumption/Branch reduction Officer (%) 10.42

Savings/Branch (in pesos/branch) 1,000 Rank and File (%) 14.57

Overall (%) 13.15

Total Water Consumption (m ) 3

*Main facilities 66,089 Employee Covered by CBA (%)* 61

Total Water Intensity (m3/in billion pesos revenue) 18,643 Total No. of employees covered
by CBA* 3,993

*Parent bank only

Governance
No. of Employees Trained in Anti-corruption 5,209 Total No. of Rank and File (V to VII) promoted 1,074
Among the top 5 publicly-listed companies in corporate governance
for 6 straight years Average Training Hours per Employee 11.14

Appointed Roberto F. Kuan as the lead independent director and

Margarita L. San Juan as an independent director (only female
member of the Board) No. of Internal Engagement Programs 4
All material topics are adequately disclosed in accordance to SEC Total No. of Participants 2,127
and PSE policies
Third Month Questionnaire

Officer - Satisfaction Rating (out of 10) 8.05

Rank and File - Satisfaction Rating (out of 10) 8.68

% of employees who said they will recommend China

Bank as a workplace (based on 2017 exit interview) 97%
 8 China Bank Annual Financial and Sustainability Report 2017

FOUNDATIONS FOR SUSTAINABLE GROWTH

102-7

Proven Reliability and Enduring Client Quality Talent

Stability Relationships Capital

Committed to the highest As a leading universal bank Our workforce drives China Bank’s
standards of corporate operating for 97 years, China Bank relentless move forward. A key
governance, business integrity, is a trusted partner of generations strategy to our success all these
and professionalism, China of clients. We build and nurture years is attracting, developing, and
Bank continues to be a reliable strong customer relationships, retaining high caliber employees to
and stable institution. We guided by our mission to be a effectively support our expanding
are constantly improving our primary catalyst in wealth creation. operations. We are adopting the
performance, products, and With a customer-centric approach best practices in human resources
processes in step with the of always considering what’s management to create a positive
changing times, rising customer best for our clients, we develop working environment where people
expectations, and international relevant products and services, are motivated and energized to
best practices to fulfill our roll out various improvements do their best work and to provide
fiduciary duties and deliver on our and innovations, and simplify our excellent customer service all
commitments to our stakeholders. processes to enhance customer the time.
experience across all our touch
points.

P84 billion 1.3 million 9,124

CAPITAL CLIENTS EMPLOYEES
CET 1/Tier 1 CAR: 13.5%; 16% have been banking
Total CAR: 14.2% with China Bank for more
than 10 years

“Baa2”
INVESTMENT
GRADE CREDIT RATING
From Moody’s
 Foundations for Sustainable Growth 9

Efficient Operations Robust IT Infrastructure Wide Reach

With a balanced approach to China Bank’s business activities We put a lot of infrastructure
operational efficiency, we ensure are ably supported by robust IT and technology to provide the
that China Bank’s revenue streams infrastructure that can scale with best combination of value,
are growing faster than overhead demand. With our up-to-date accessibility, and convenience for
costs. Focused on increasing technology—from our core banking our customers. Driven to be within
productivity and achieving long- system to our various front-to- easy reach anywhere and anytime,
term efficiency, we continue to end operations systems— well- we continue to expand our
make the necessary investments thought out business processes, nationwide footprint and enhance
to enhance our market coverage, and comprehensive policy our electronic banking channels.
improve competitiveness, provide frameworks, we are organized to Our wide physical and digital
better and more responsive provide excellent service to our distribution network makes our
service, and generate long-term internal and external customers, products and services accessible
value for all stakeholders. manage our risks, and achieve our to more customers and enables
organizational goals. them to choose how, when, and
where they want to bank with us.

2.31% 596
COST-TO-AVERAGE NEW CORE BANKING BRANCHES
ASSETS RATIO SYSTEM Complemented by 888 ATMs,
China Bank Online,
Rolled out in 2015
China Bank Mobile Banking App,
China Bank TellerPhone
10 China Bank Annual Financial and Sustainability Report 2017

MESSAGE TO OUR STAKEHOLDERS

102-14, 102-15

We overcame challenges and took full advantage of opportunities,

using our capabilities, footprint, and scale to meet our customers’
financial needs and create sustained value for all our stakeholders.
We are continuing to invest in the future while delivering results for
today.
 Message to Our Stakeholders 11

To Our Fellow Stakeholders,

The year 2017 was a significant period of change and progress The government’s long-term development plan of accelerating
for China Bank, marking a new chapter in our storied history. economic development through 2040 was jump started
We achieved good business and financial results as we with a critical piece, as Congress enacted the first phase of
sustained our growth momentum, successfully completed tax reforms popularly known as TRAIN 1 ( RA 10963 or Tax
a stock rights offer to bolster our capacity to pursue further Reform Acceleration & Inclusion Act), which would partly fund
business growth, highlighted by an investment grade credit the government‘s ambitious “Build, Build, Build“program.
rating. Phase 2 of the tax reforms program is expected to be revenue
neutral, but the reduction of the Corporate Income Tax to align
We overcame challenges and took full advantage of with our ASEAN peers and modernize the fiscal incentives
opportunities, using our capabilities, footprint, and scale to system are among the significant initiatives expected to
meet our customers’ financial needs and create sustained broaden the tax base, improve tax efficiency while continuing
value for all our stakeholders. We are continuing to invest to encourage foreign investments and exports and improve
in the future while delivering results for today. And as we labor productivity.
prepare with anticipation for our 100th anniversary in 2020, a
new leadership in the management team has been entrusted The acceleration in the government’s infrastructure spending
with carrying the Bank forward and upward. The new senior was reflected in the slight increase in the country‘s fiscal
leadership is tasked to our vision of becoming the best, most deficit to P350.6 billion, still below the government‘s target of
admired, and innovative financial services institution. P482.1 billion or about 3% of GDP. The government’s plan to
usher in a golden era of infrastructure spending is considered
sustainable, as the country’s debt to GDP ratio of less than
What Happened in 2017 35% can very well accommodate additional spending,
complemented by funding from ODA and PPP. Similarly, the
The Philippines remained one of the fastest growing among acceleration in infrastructure-related imports coupled with
emerging economies in the region. Gross Domestic Product higher costs of fuel brought the current account deficit up to
(GDP) grew 6.7% in 2017, still a healthy growth record US$100 million in 2017. As a result, the peso shed 5.8% of its
compared to the 6.9% in 2016, as expansion in infrastructure- value against the dollar, averaging P50.40: US$1 in 2017 from
related and investment-related spending offset the expected P47.49: US$1 in 2016. Due to the positive investor sentiment,
slack from the previous year’s election-related spending. the PSEi closed 25% higher at 8,558 from 6,841 in 2016.
The strong economic expansion extended the economy’s
run of 76 quarters of uninterrupted growth, as the initial The Philippine banking industry was both a beneficiary and
phases of the government’s “Build, Build, Build” program a crucial catalyst in helping sustain this sustainable pace of
start to gain traction. The solid economic fundamentals growth of our economy. Industry assets expanded by 12%
provided the monetary authorities ample space to support or P1.5 trillion to P14.8 trillion, 81% of which came from
the country’s growth trajectory, and continue the program for loans growth. Bank lending continued to expand by 19%
broader market reforms under the new BSP Governor Nestor and went mostly to productive sectors.
Espenilla Jr.
12 China Bank Annual Financial and Sustainability Report 2017

New BSP Governor

HENRY SY, SR.

Honorary Chairman
and Advisor to the Boardd

Our thrift banking arm How We Performed

China Bank Savings In 2017, our Bank generated a record net income of
tripled its net income, P7.5 billion, up 16% on the back of sustained growth in core
and fee-based businesses. This translates to a return on
sustaining the momentum equity (ROE) of 10.01% and return on assets (ROA) of 1.12%.
of its turnaround to full
Our net interest income rose 18% year-on-year to P19.6
profitability in 2016.
billion, driven by the 17% growth in loan portfolio and stable
net interest margin of 3.11%.

Total assets expanded 19% to P751.4 billion. Gross loans

grew 16% by P65 billion to P454 billion due to strong demand
across all segments, particularly consumer loans, which
jumped 25%, and corporate loans, which rose 19%.

Even as the expansion in our loan portfolio continued

apace, stronger focus on credit underwriting standards and
disciplined collection efforts led to a milestone reduction
 Message to Our Stakeholders 13

in our NPL ratio to 1.4% -- lower than industry levels – as Major Developments
non-performing loans (NPL) dropped P900 million or 12.3%.
Continued provisioning improved the loan loss coverage ratio The year marked a significant change at the management
(LLR) to 99% from 91% (consolidated level) and to 175% leadership level, with William C. Whang becoming President
from 153% (parent bank). effective November 1, 2017. William joined the Bank in 2011
as head of our Institutional Banking Group, and was Chief
The growth in loans and asset base exceeded P100 billion in Operating Officer before his designation as President.
the last two years, supported by the growth in funding base.
Total deposits rose 17% to P635.1 billion, boosted by 24% Taking over as Chief Operating Officer is Executive Vice
growth in low-cost funds, resulting to healthy CASA (checking President Romeo “Romy” D. Uyan, Jr. who previously
& savings accounts) ratio of 54%, while the loans-to-deposit oversaw the Financial Markets segment while serving as
ratio was steady at 71%. Treasurer and Head of Treasury Group, while also serving as
President of China Bank Capital.
We generated this growth by focusing on our customers’
need and making China Bank more accessible. We Patrick D. Cheng was designated Chief Finance Officer.
sustained our network expansion efforts, opening 55 new Patrick joined the bank in 2013 as Trust Officer and Head of
branches to grow our nationwide footprint to 596 branches, Trust and Asset Management Group.
complemented by 888 ATMs and our secure and convenient
electronic banking channels. With a wider reach and more The senior management team is further bolstered by
ways to reach us, we are able to serve more customers Rosemarie C. Gan as Head of Retail Banking, and Alberto
anytime and virtually anywhere. Emilio V. Ramos as President of China Bank Savings --
both key units engaging the retail, SME, and commercial
Our thrift banking arm China Bank Savings tripled its net segments.
income, sustaining the momentum of its turnaround to full
profitability in 2016. At 160 branches as of year-end 2017, CBS Meanwhile, capable successors were designated for key
has more branches than China Bank in 2006 before the start functions -- Benedict L. Chan succeeded Romy as Treasurer
of our expansion phase triggered by the acquisition of Manila and Head of Treasury Group, while Lilian Yu replaced William
Bank. as Head of Institutional Banking Group. Ryan Martin L.
Tapia was designated President of China Bank Capital, with
In the capital markets, the China Bank Group continued to Marisol M. Teodoro appointed as President of China Bank
make its presence felt as a major player. Our investment Securities.
house subsidiary China Bank Capital sustained its market
leadership in the local bond market, and with a very active We take this opportunity to express our sincere thanks and
participation in major underwriting deals. It reported a 25% deep appreciation to Ricardo “Ric” R. Chua, who stepped
earnings growth, even as it completed its capital markets down as President and CEO on October 31, 2017. We are
capability with the launching of China Bank Securities (from truly grateful to Ric for his dedicated service of 42 years—
the acquisition of ATC Securities). President and CEO from September 2014 to October 31,
2017 and previously as EVP and COO from 1995 to 2014.
Ric had been instrumental to China Bank’s success, and we
are happy to note that we continue to benefit from his wise
counsel as an advisor to the Board.
 14 China Bank Annual Financial and Sustainability Report 2017

At the last stockholders’ meeting, we welcomed Ms. Bank, citing the Bank’s strong capital base and stable asset
Margarita L. San Juan to our Board as Independent Director, quality. This investment grade credit rating is at par with
succeeding the late Dy Tiong. Margie also serves as an the Philippine sovereign rating and the best rated banks in
Independent Director of our subsidiaries China Bank Savings the country. This investment grade rating followed a rating
and China Bank Capital. We hope to secure shareholder upgrade from Capital Intelligence to “BBB” from “BBB-“, and
and regulatory approval to increase the number of board a similar affirmation by Fitch Ratings of China Bank’s “BB+”
directors to twelve, to accommodate the addition of a fourth Long Term Issuer Default Ratings.
independent director, as we continue our efforts to be
aligned with best practice in corporate governance. Good corporate governance is the cornerstone of our
business. It has been crucial in our success in the last 97
While our 2014 P8 billion stock rights offering provided the years. We are pleased to note that our commitment and
resources to pursue our growth and diversification strategies efforts in this field was recognized both here and abroad.
post-Plantersbank acquisition, we returned to the capital
markets in May 2017 with another oversubscribed P15-billion At the annual Philippine Stock Exchange (PSE) Bell Awards
stock rights offering. This SRO bolstered our capital strength for excellence in corporate governance, China Bank was
to sustain our growth momentum across all segments, given a special citation as the only publicly listed company to
while we prepare for greater competition and a more have won the Bell Award for 5 consecutive years from 2012
complex regulatory scenario Basel 3 and related rules taking to 2016, and continued to be among the top five in corporate
effect. Our common equity tier 1 (CET 1) and total capital governance in 2017 – and the only bank to be so recognized
adequacy ratios as of end-December 2017 stood at 13.47% in each of those 6 years. We were recognized hailed by
and 14.22%, respectively. the Global Banking & Finance Review as the Best Bank for
Corporate Governance Philippines 2017 and Best Investor
The capital raising was complemented by a rationalization Relations Bank Philippines 2017.
of the liability funding mix with the issuance of LTNCDs
amounting to P15.9 billion -- P9.6 billion in November 2016 We marked another milestone as we celebrated the 90th
and P6.3 billion in June 2017. Apart from leveraging the anniversary of the listing of our shares in 1927 at the
stronger capital base with longer-term funding to match our Manila Stock Exchange (a forerunner of the Philippine Stock
long term asset deployment, the proceeds were used to Exchange).
support our strategic initiatives and business expansion.

In a development reflective of our balance sheet strength How We Create Shared Value
and our ample liquidity situation, we paid off -- one year
ahead of schedule -- the 3-year US$158 million Syndicated For 97 years, we have been combining financial success
Loan due in June 2018. Robust growth of our foreign with ethical practice and socially responsible action. We
currency deposits at favorable rates enabled us to repay the are driven to create sustainable value for our stakeholders
loan sooner. while being mindful of our broader impact on society and
the environment. We take seriously our responsibility for
A significant highlight of the year was the INVESTMENT making a positive difference in our stakeholders’ lives, for
GRADE credit rating of Baa2 given by Moody’s Investors protecting the environment, and for enabling societal and
Service in its very first credit rating report issued for China
 Message to Our Stakeholders 15

economic progress. And while we are proud of the strides

As we look forward
we have made in sustainability, we know there is more work
to be done. to celebrating our
100th anniversary in 2020,
This year, for the first time, references can be found
in various sections of this report to the United Nations our objective is to sharpen
Sustainable Development Goals (SDGs) which are most
significant to our business.
our focus on four wildly
important goals—business
Our Plans growth, operational
excellence, customer
With another great year 2017 to build on, and with a new
management team at the helm, we are prepared to face centricity, and employee
the challenges presented by an environment characterized engagement.
by globalization, fragmentation, and disruption. As we look
forward to celebrating our 100th anniversary in 2020, our
objective is to sharpen our focus on four wildly important
goals —business growth, operational excellence, customer
centricity, and employee engagement.

As our journey continues, we are even more excited for

what the future holds. We are preparing to embrace the
myriad opportunities of the next century by staying relevant
to our customers in an increasingly digital world, where
the rules of competition and business models are being HANS T. SY
redefined and even disrupted across many industries. We Chairman of the Board &
will pursue our digital banking transformation, with our the Executive Committee
innovations in platforms, products, and services aimed
at creating and enhancing value for our customers and
partners -- our road map to becoming the best Bank for our
customers and stakeholders.
GILBERT U. DEE
On behalf of the board of directors, management, Vice Chairman
and staff of China Bank, we thank our customers for your
continued support and partnership. We especially thank
our stockholders for your continued trust in your Board and
Management to continue our journey of strength, growth,
and shareholder value. WILLIAM C. WHANG
President
 16 China Bank Annual Financial and Sustainability Report 2017

SUSTAINABLE VALUE FOR ALL

102-9

As a leading universal bank operating for almost a century, China Bank believes in creating
value for stakeholders. We are a trustworthy and responsive bank to our customers
and shareholders, a fair and caring employer to our employees, and a responsible and
proactive ally to society.

Using our resources and expertise, we help our business We foster financial inclusion by offering accessible banking
and individual customers achieve their financial objectives products and services, making China Bank accessible to
and prosper, which redounds to more jobs, better quality of more people, and developing programs that encourage the
life, and vibrant communities. un-banked and underserved segments to save and access
banking products and services.
Through our core products and services, we create value in
three key ways: driving economic progress, growing and For all our customer segments, we have life and non-life
preserving assets, and fostering financial inclusion. products and services to enable them to manage risks,
bounce back from losses, and enjoy peace of mind and
We drive economic progress by supporting businesses financial security.
wherever they are in their growth journey. We provide
a complete range of credit facilities, financial solutions, Our value creation through our core products and services
and advisory services to businesses of all sizes. We is underpinned by our robust Environmental, Social, and
proactively finance businesses and projects that directly Governance (ESG) framework that drives us to conduct
deliver on the sustainable development goals, including our business in an ethical and responsible manner. We
education, infrastructure, energy, and sustainable have a full complement of highly qualified employees and
communities. comprehensive employee development programs. We have
policies in place to keep our environmental impact managed
We help grow and preserve our customers’ assets with an and ensure meaningful support for various advocacies.
array of deposit and investment products and services. No We have a consumer protection framework and efficient
matter what stage in life they are in, we have the solutions mechanisms for handling customer concerns. And we have
best suited to their lifestyle, ambitions, and preferences, a strong risk management, governance, and compliance
and offer sound financial advice to help them make the culture—a hallmark of our success all these years.
right choices.
 Sustainability at China Bank 17

Driving Economic Growing and Fostering Financial

Value Creation
Progress Preserving Assets Inclusion

Working Capital Time Deposits Basic Deposit Account

SME Loans Money Market Placements Kiddie Savings

Trade Financing Government Securities OFW Savings Account

(Peso and ROPs)
Supply Chain Financing Fixed-Income Bonds Consumer Loans

Term Loans and Project Long-term CD Real Estate

Finance Commercial Paper
Products and Retail Bonds Vehicle Loans
Syndicated Loans
Services
Securitized Loans Mutual Funds/UITFs Personal / Salary Loans

Bond Issuances Trust Fund Civil Servants Loan

Equity Raising / IPO Pension Funds Cards and Payments

Advisory Services, Estate Planning

Remittance Services
Mergers and Acquisitions
Escrow

Life and Non-life Insurance

Environmental Social
Human Resources Customer Protection
Sustainable Protection Responsibility
Banking
(ESG Framework)
Corporate Governance
18 China Bank Annual Financial and Sustainability Report 2017

Driving Sustainable
Economic Progress
 Business Review 19

A s one of the biggest universal

banks in the Philippines, China
Bank is intrinsically an enabler of
economic progress. We embrace this
role and go to great lengths to be the
best bank for our business customers
and facilitate business growth and
economic development in a way that
is sustainable and likewise beneficial
to society and the environment.
20 China Bank Annual Financial and Sustainability Report 2017

FINANCING SUSTAINABLE DEVELOPMENT

203-2

China Bank, built by entrepreneurs, is the local businessmen’s bank. We provide a wide
range of loan and credit facilities and trading and advisory services to our corporate and
commercial customers through our Institutional Banking Group (IBG). In 2017, IBG focused
not just on helping our customers scale up their businesses but also on scaling up our
financing for businesses and projects that contribute to the Sustainable Development Goals
(SDGs).

P258 billion 48% Close to P100 billion

IBG’s loan portfolio of the portfolio is aligned in loans for electrification, building
Up 17% with the SDGs sustainable communities, and
infrastructure development

DISBURSED LOANS CONTRIBUTING TO SUSTAINABLE DEVELOPMENT GOALS

Nutrition, Health and Wellness 1.16

Sustainable Mobility 2.16

Education 2.88

Water and Sanitation Systems 4.79

Sustainable Energy 8.76

Food and Agriculture 10.28

Infrastructure Development 18.26

Sustainable Communities 33.87

Electrification 40.62

0 5 10 15 20 25 30 35 40 45

In Billion Pesos
 Business Review 21

Great places to live, work,

and play
DISBURSED LOANS CONTRIBUTING
We helped enable the establishment
TO SUSTAINABLE DEVELOPMENT GOALS
of sustainable communities through
1.76% a P3 billion loan to Sta. Lucia Land
0.95%
2.34% Inc. (SLI). One of the country’s prime
3.90% real estate developers, SLI develops
Electrification
properties that spur progress and add
Sustainable Communities
value to the communities in which
7.14%
Infrastructure Development they are located. These include
33.08% a network of thriving residential
8.37% Food and Agriculture
communities and retail, tourism, and
Sustainable Energy leisure developments nationwide.
Water and Sanitation Systems
14.87%
Education
Wireless connections,
Sustainable Mobility digital innovations
27.59%
We helped fund Smart
Nutrition, Health and Wellness
Communications’ network
improvements to bring faster and
more responsive telecommunications
services across the country with
More power to the nation 150 MW greenfield coal-fired thermal a P9.9 billion loan. Smart is the
In 2017, we extended to SMC power plant located in Limay, Bataan. country’s leading mobile network. Its
Consolidated Power Corporation This plant utilizes the circulating LTE and 3G expansion program which
a P6.68 billion peso loan-part of a fluidized bed (CFB) technology which initially covered Boracay, Metro Davao,
12-year loan facility that partially transforms coal into a fuel source that Metro Cebu, Rizal, and Metro Manila
financed the construction of the 4 x is relatively low in pollutant emissions. last year, has been brought to other
parts of the country to boost network
speed, coverage, and capacity to
make the best digital experience more
accessible to more customers.

Photo from www.smcglobalpower.com.ph

 22 China Bank Annual Financial and Sustainability Report 2017

BROADENING ACCESS TO FINANCING

VIA THE CAPITAL MARKETS
203-2

We provide businesses access to a range of financing options Investment Banking Division

to improve their funding structure and capacity to grow and Started in 2011
expand. Aside from traditional bank lending, we offer debt or equity China Bank Capital
financing arrangements through China Bank Capital, our investment Established in 2015
house subsidiary, and its stock brokerage arm, China Bank
Securities. We help both the private and government sectors raise
funds through the capital markets to finance expansion projects and
infrastructure developments that enhance the production capacity of
No. 1
the nation. in peso retail bond issues

TOTAL CAPITAL RAISED No. 1

in peso preferred shares issues

19% Participated in
others 41
debt & equity transactions of
30
companies that belong to the top
1,000 Philippine corporations

81% P805 billion

worth of issuances, including two
aligned with Retail Treasury Bond issuances of the
the SDGs Philippine Government amounting to
P436 billion

China Bank Securities

(formerly ATC Securities)
Acquired in 2017

18% 63%
electrification infrastructure
No. 3
in IPO volume
 Business Review 23

Supporting infrastructure
China Bank Capital was one of the
joint issue managers and joint lead
underwriters of Eagle Cement’s Initial
Public Offering. The proceeds went
to the construction of a cement plant
in Cebu and distribution centers and
marine terminals in Southern Luzon,
Visayas and Mindanao, in preparation
for the aggressive infrastructure
program of the government as well as
the continued boom in the real estate
market and the expanding tourism
sector.

China Bank Capital was the issue Supporting education

manager, underwriter, and bookrunner China Bank Capital acted as one of
of Vista Land and Lifescapes’ Fixed the joint issue managers and joint lead
Rate Retail Bonds issuance. The underwriters of STI Education Services
bond proceeds directly financed Group’s Fixed Rate Retail Bonds offer
the development, construction, and which financed investments that
completion of the Evia Lifestyle Center deliver access to quality education,
Expansion and Vistamall Malolos, as namely campus expansion projects.
well as for general corporate purposes. Other portions of the bond proceeds
were used for land acquisition, future
expansion, and general corporate
purposes.
Supporting electrification
China Bank Capital was one of the joint
lead arrangers for SMC Consolidated
Power Corporation syndicated term
loan which financed the acquisition
of an existing 2x150 MW Circulating
Fluidized Bed (CFB) coal-fired power
plant and financing of development
and construction activities for a new
2x150 MW CFB coal-fired power plant
in Limay, Bataan.
24 China Bank Annual Financial and Sustainability Report 2017

EMPOWERING SMEs
203-2

Small and medium scale enterprises (SMEs), which account for 95% of business
establishments in the Philippines, are crucial for the country’s economic growth and
competitiveness. Through China Bank Savings (CBS), we are enabling SMEs by providing
them with the financial products, services, and advice they need to start and succeed. CBS’
SME lending continued to rise in 2017, reflective of our commitment to help SMEs meet
their business challenges and realize their full potential.

P31 billion 1,812 P17 million

SME loans up 6% SME borrowers in 2017 average loan amount

2017 SME LOANS

24%
Real Estate Activities

1% Water Supply, Sewerage, Waste

Management and Remediation
2% Agriculture, Forestry, and Fishing
3% Education
4% Construction
22% 4% Electricity, Gas, Steam, and
Wholesale and Retail Trade: Air-Conditioning Supply
Repair of Motor Vehicles
5%
Professional, Scientific, Technical, Admin,
and Social Work Activities

6% Transportation and Storage

7%
13% Accommodation and
Food Service Activities
Manufacturing
9%
Financial and Insurance
Activities
 Business Review 25

Dedicated to SMEs
CBS has specialized lending divisions
that cater to the specific needs of
SMEs, particularly in acquiring real
estate and vehicles to start and grow
their businesses. The Real Estate
Lending Division, formed in 2015, is
focused on serving horizontal
sub-urban developers to help them
build affordable housing and enable
more Filipinos to acquire their first
homes. The Bus and Truck Lending
Division, which started in the middle
of 2017, supports bus companies in
Metro Manila that are looking to phase
out their old models and procure more
efficient units, in response to the
re-fleeting program of the government.
In just half a year, CBS has supported
50% of the market.
26 China Bank Annual Financial and Sustainability Report 2017

BOOSTING BUSINESS EFFICIENCY

Managing working capital and cash flow can be a complex endeavor. We help businesses of
all sizes optimize funds, accelerate collections, manage the payment cycle, and streamline
and automate processes with our comprehensive suite of cash management solutions
designed for better liquidity, receivables, and disbursements management. In 2017, the
number of cash management transactions more than doubled, which likewise translated to
increased efficiency and reduced expenses for the companies we serve.

5,000 31% 141%

corporate customers, increase increase in cash management
13,000 in new corporate transaction count to
user accounts customers 13.2 million

50%
increase in receivables
management transactions

26%
increase in payables
management transactions

25%
increase in government
payment transactions

25%
increase in retail POS
transactions
 Business Review 27

Convenient cash withdrawals

at the point of sale
China Bank partnered with Universal
Storefront Services Corp. (USSC) to
enable customers to withdraw cash
from point-of-sale (POS) terminals in
USSC branches. The POS Cash Out
service is available at 95 of USSC outlets
nationwide. Customers can save time
by making POS withdrawals as they
can combine purchasing and withdrawal
transactions. Meanwhile, this facility
enables USSC to attract additional
customers who visit their branches
because they need cash. USSC runs
one of the country’s largest networks
of one-stop service shops specializing
in money transfer, transport ticketing,
and payment collection, among others.
China Bank plans to expand this facility
to more partners in the near future to
further enhance its service to all Bancnet-
member Bank customers.

More robust China Bank

Online-Corporate
China Bank Online-Corporate was
enhanced in 2017 to meet the
increasingly sophisticated needs of our
corporate customers. The new and
improved online banking facility has
multi-factor authentication for greater
security, a user-friendlier account
management dashboard capable of
displaying account balances, including
those in third party banks, for a
360-degree view of cash position, and
a mobile approval function for added
convenience and flexibility.
28 China Bank Annual Financial and Sustainability Report 2017

Growing and
Preserving Assets
 Business Review 29

W ith a mission to be a catalyst

of wealth creation, China Bank
is committed to help customers
save and invest at any life stage
and secure their financial future.
We endeavor to understand our
customers’ financial situation and
ambitions in order to offer them the
best possible advice and services and
help them navigate the challenges of
creating wealth, seeing it grow over
time, and preserving and passing it
down to the next generation.
 30 China Bank Annual Financial and Sustainability Report 2017

BUILDING WEALTH ON A FOUNDATION

OF TRUST

For us, banking is a matter of trust. We place great importance on earning and maintaining
our customers’ trust and giving them peace of mind that the money they entrusted to us is
always safe. Aside from basic deposit products and services, we provide customers with a
wide range of treasury, trust, wealth management, bancassurance products and services,
and sound financial advice to help them grow and preserve their wealth. Our team of
seasoned trust officers and relationship managers ensure our clients make well-informed
decisions—aligned with their investment objectives, time horizon, and risk tolerance.

TREASURY INVESTMENTS
TRUST BANKING ASSETS UNDER MANAGEMENT
We provide customers with a range (AUM)
of investment options as they enjoy
affordable investment amounts, no
management fees, and attractive 29%
returns. China Bank is a Government UITF
Securities Eligible Dealer (GSED),
a registered broker-dealer of fixed
income securities with the Securities 71%
and Exchange Commission, and a non-UITF
brokering participant in the Fixed
Income Trading Platform of the
Philippine Dealing and Exchange
Corporation. We offer access to direct TRUST BANKING
investments in government securities
issued by the Bureau of Treasury China Bank is one of the
and to highly-rated bonds of various leading institutions in trust
maturities issued by prime Philippine banking. Through our Trust and
corporations. Asset Management Group,
we offer unit investment P132 billion 23%
trust funds (UITF), personal AUM increase in
Up 28% Investment
management fund, investment Management
management, escrow, and Account
corporate trust services to
Among the Top 10 meet our customers’ unique
Best-Performing financial needs. In 2017, our
GSEDs Assets Under Management
UITF
(AUM) grew 28% to P132
billion, placing China Bank 14%
among the top 5 in terms of increase in number 13%
of UITF accounts increase in
AUM among privately-owned
Pension Fund
local banks.
 Business Review 31

DELIVERING BEST RETURNS FOR INVESTORS

Rank UITF 2017 (year-on-year) returns

No. 1 China Bank Balanced Fund 14.62%

No. 1 China Bank Intermediate Fixed-Income Fund 2.13%

No. 1 China Bank Short-Term Fund 2.10%

No. 3 China Bank High Dividend Equity Fund 21.63%

No. 5 China Bank Institutional Money Market Fund 1.74%

Source: www.uitf.com.ph

Best Managed Fund

For the second year in a row, the
Chartered Financial Analyst (CFA)
Society Philippines named China Bank
Dollar Bond Fund as the
“Best Managed Fund of the Year”
in the Dollar Long-Term Bond category.
CFA Society Philippines President
Cristina Arceo handed the award to
China Bank CFO Patrick Cheng (former
Trust and Asset Management Group
Head) at the 2017 Charter Awards
Ceremony.

Insights from experts

China Bank conducts learning sessions
and market outlook forums year-round
to help customers better understand
financial and estate planning, and the
market developments that have an
impact on investments. In 2017, we
had 34 pocket events attended by
more than 200 customers.
 32 China Bank Annual Financial and Sustainability Report 2017

BUILDING WEALTH ON A FOUNDATION

OF TRUST

WEALTH MANAGEMENT

We are committed to managing,

growing, and protecting our clients’
wealth for generations. Through our
Wealth Management Group, we
serve the specialized needs of the
high net worth segment. Our open
architecture platform enables us to
optimize our clients’ portfolios with the
best-in-class solutions—our proprietary
products as well as those of other
financial institutions. Our highly
skilled relationship managers provide
dedicated, on-call service to conduct
our clients’ banking needs expertly,
swiftly, and in total confidence. In
2017, we sustained our momentum as
preferred Wealth Managers.

P84.7 billion 15% P406 million

AUM increase in number net income
Up 7% of Private Banking accounts Up 34%

CHINABANK

BANCASSURANCE

NUMBER OF LIVES COVERED Planning for financial security must always

account for the unexpected. Through Manulife
71,027 80 71.03
Thousands

China Bank Life Assurance Corporation

policies in force 70
57.33 16% (MCBL),our bancassurance joint venture
60 with one of the largest insurers in the world,
46.77
18%
50 Manulife, we offer a full range of innovative
40 20% insurance products to help our customers
84%
30 82% prepare for life’s eventualities. And when they
80% do happen, customers are assured that claims
20
will be handled promptly and efficiently. In
10
2017, MCBL’s 10th year, we reaffirmed our
16% 0
2015 2016 2017 commitment to provide the best insurance
increase in
lives covered Existing New In-Force protection for our customers, with each policy
underpinned by our strong claims-paying ability.
 Business Review 33

INSURANCE Total Exposure / Face Amount

76.87
80

Billions
70 61.22 20.27%
60
47.39 20.53%
50

40 23.90%
P77 billion 30
79.73%
total insurance 79.47%
coverage amount 20 76.10%
Up 20%
10

0
2015 2016 2017
Existing New In-Force

INSURANCE - Total Claim Proceeds

160 148.47
Millions

140 119.88
120 28.32%
97.25
100 34.10%
17.59%
80 41.29%
P148 million 60
in claims disbursed 45.39% 3.72%
Up 53% 40 53.50%
54.73%
20
20.27%
0
2015 2016 2017
Death/Rider Claims Maturities Surrenders Div/Ex Refunds/Others

Peso Smart Financial Literacy Program

Manulife Philippines partnered with volunteer
organization Hands On Manila (HOM) to
launch Peso Smart, a series of financial literacy
classes designed to teach public school
students the basics of saving and investing.
Manulife employees designed the curriculum
with Hands On Manila’s partner educators and
served as mentors during the weekly Peso
Smart sessions with 30 grade 6 pupils from
pilot schools Nueve de Febrero, Pembo, and
Plainview.
34 China Bank Annual Financial and Sustainability Report 2017

Fostering Financial
Inclusion
 Business Review 35

C hina Bank is well positioned

to help consumers manage their
money and secure their financial
future. Cognizant of the negative
impact of lack of financial knowledge
and access to financial services to
people’s lives, their future, and even
the country’s economic growth, we
mobilize our resources and expertise
to make banking more inclusive and
to promote financial literacy. We
provide financial information through
a variety of accessible channels, we
expand our nationwide footprint and
develop products and services to reach
the underserved markets, and deploy
digital platforms to make banking easy
and convenient anytime, anywhere.
 36 China Bank Annual Financial and Sustainability Report 2017

PROVIDING MORE CONVENIENT ACCESS

Banking is a people business at heart. Our relationship with our customers starts in our
branches and we stay connected with them through our electronic banking channels,
effectively combining technological advances with the time-tested advantages of
face-to-face interactions. In 2017, we continued to expand and enhance our physical and
digital distribution network to provide customers with even more convenient, secure,
and easy access to our products and services.

596 888 EMV 24/7

Branches ATMs All ATMs China Bank Online
& ATM Cards China Bank Mobile App
China Bank TellerPhone

BRANCH BANKING
596 BRANCHES NATIONWIDE
We believe that there is no
technological substitute to meeting the 173
people you are entrusting with your
in Luzon 436
China Bank
money. Our network of branches,
manned by competent, honest, and
friendly banking professionals, is still 65
our main distribution channel. Even in in Visayas
the digital age, our branches remain
crucial for acquiring new customers 43
and growing relationship with the 315 in Mindanao
160
in Metro Manila
existing ones. Transactions such as China Bank Savings
opening an account, getting financial
advice, or taking out a mortgage are
exclusively done in our branches.

55 11% P3.7 billion

branches increase Net income of the
opened in 2017 in customers Retail Banking Business
 Business Review 37

E-BANKING
888 ATMS NATIONWIDE,
We serve our customers offline and ONE OF THE FIRST TO BE
online—from our branches to our EMV-COMPLIANT
ATMs, China Bank Online, China
Bank Mobile Banking App, and China
Bank TellerPhone. We recognize that 589 724
China Bank
today’s customers are mobile and on-branch

demand the convenience and flexibility 299

off-branch
of managing their finances anywhere,
anytime, on any device. Thus, we 164
continue to invest in up-to-date China Bank
technology and efficient and secure savings

systems not only to be available to our

customers 24/7, virtually anywhere,
but to provide them with a seamless TRANSACTIONS ARE SHIFTING
and consistent experience across all TO ELECTRONIC CHANNELS
channels.

39% 49%
electronic
electronic

61% 51%
over-the- over-the-
counter counter

83 2016 2017
ATMs deployed in 2017
38 China Bank Annual Financial and Sustainability Report 2017

ENCOURAGING SAVINGS

We offer various types of deposit accounts with low or zero initial deposit and low
maintaining balance to make it easy for customers to manage their household budget or
business finances, set aside money for emergencies, and build their funds for future needs.
By opening more branches in the last ten years, especially in the provinces, we are able
to reach out to our previously un-served communities and offer them a better and more
secure option than just stashing away money at home or in an informal system of saving
and lending money. All China Bank deposits are insured up to P500,000 by the Philippine
Deposit Insurance Corporation.

P343 billion
CASA

P635 billion
in total deposits in 2017
up 17%

P292 billion
time deposits

24%
increase in Current & Savings
accounts (CASA)

11%
increase in the number
of new savings and
checking accounts
 Business Review 39

BRIDGING FAMILIES

Working abroad, enduring home sickness is a price a lot of Filipinos are willing to pay to provide for
their loved ones. Through China Bank On-Time Remittance and Overseas Kababayan Services, we
help overseas Filipino workers (OFWs) make the most of their hard-earned money. Combined with
our vast network of international remittance partners, domestic pay-out partners, and various modes
of remittance, sending and receiving money through China Bank is fast, secure, and affordable. In
2017, we processed 2.9 million remittance transactions. Our remittance volume more than doubled to
US$2.87 billion, accounting for 10% of the total OFW remittances sent though banks last year.

29 IMPROVED MARKET SHARE FROM 5% IN 2016

Domestic and International
remittance partners with TO 10% IN 2017
branches worldwide
US$1.35 billion US$2.87 billion
OFW remittances sent OFW remittances sent
through China Bank through China Bank

5 2016 2017
domestic payout partners
with over
8,000
branches and outlets all over
the Philippines
US$26.09 Billion US$28.06 Billion
Total OFW remittances Total OFW remittances
sent through banks sent through banks
Empowering OFWs with money
management skills
China Bank conducts financial literacy
lectures for OFWs as part of the Pre-
Deployment Orientation Seminar
(PDOS). A mandatory requirement for
all OFWs, the PDOS aims to make
them aware of the realities of working
in a foreign country. At the China Bank
PDOS Center in Ermita, Manila, our
remittance officers share practical tips
and information on budgeting, saving,
and investing to help OFWs secure their
family’s future. In 2017, we conducted
18 financial literacy lectures attended by
a total of 7,550 OFWs bound for Asia and
the Middle East.
 40 China Bank Annual Financial and Sustainability Report 2017

MAKING DREAMS COME TRUE

People dream of having their own home, acquiring their own vehicle for business/livelihood,
or traveling to their dream destination. Helping our customers achieve their dreams is one
of the most significant things we can do for them. In 2017, our consumer loans increased
25% to P63 billion, translating to more dreams realized.

REAL ESTATE LOANS

203-2

Our low interest rates and flexible

payment terms make it easy and
affordable for customers to buy or P40 billion 4,559 P11.6 billion
in outstanding real estate loans loan volume
build a home, renovate their homes, real estate loans in 2017 up 18% up 25%
refinance an existing housing loan, up 24%
or reimburse a recent purchase
or construction of a residential
or commercial property. Our
consolidated real estate loans
89%
residential
increased 24% to P40 billion in 2017. 11%
Residential loans accounted for 89% commercial
of our outstanding retail real estate
loans, reflective of our commitment
to help Filipino families have their very
own homes.
 Business Review 41

VEHICLE LOANS
203-2

As we support our customer’s dreams

of buying their own vehicle for personal
use, we place great importance on
P19 billion 12,236 P11.1 billion
in outstanding new vehicle loans loan volume
helping them acquire vehicles such vehicle loans in 2017 up 26% up 34%
as trucks and vans that supports their up 31%
livelihood and enterprises. We also
continue to look for opportunities to
finance mass transport solutions that
help alleviate traffic congestion. In 2017,
our consolidated vehicle loans reached
P18.9 billion in 2017, up 31% compared
to 2016. New loans for the purchase
of buses, trucks / equipment and light 77%
commercial vehicles increased 37% in for personal
use
23%
2017. This accounted for 23% of the new for mass transit
loans in 2017. and business/livelihood
use
 42 China Bank Annual Financial and Sustainability Report 2017

MAKING DREAMS COME TRUE

DepEd LOANS
203-2 P1.4 billion 11,432
loan released new loan
in 2017 accounts in 2017
Like any consumer, teachers sometimes have problems
with cash shortage. Through China Bank Savings (CBS),
we are helping the Department of Education’s public NUMBER OF BORROWERS
school teachers and non-teaching employees with their PER PROCEED TYPE
cash flow problems and keeping them from borrowing
12000

No. of borrowers
from loan sharks and being trapped in debt. CBS offers
10000
Easi-APDS Loan, an affordable, non-collateral loan

Educational
for the teaching and non-teaching personnel of the 8000

Consumption
Department of Education (DepEd). Since the launch of

Hospitalization

Personal
6000
Easi-APDS Loan in 2015, CBS has lent almost P2 billion

Business

Housing
4000
to help over 16,000 DepEd teachers and employees
with their financial emergencies, home repairs, 2000

education, and business needs. 0

DISTRIBUTION OF AMOUNT OF LOAN

DISBURSED BASED ON PURPOSE
3% Hospitalization

Loan 9% Housing
Proceeds
directly
General contributing 7% Business
needs to SDG
of the
clients
20% Educational
Teaching the teachers financial empowerment
CBS helps teachers become more financially empowered through
“China Bank Savings DepEd Venture: Alay sa mga Guro”. The
program was launched during the National Teachers’ Month and
DISTRIBUTION OF AMOUNT World Teachers’ Day on October 6, 2017 wherein CBS gathered
OF LOAN DISBURSED PER AREA 600 public school teachers and DepEd employees from 59
participating schools for a day of leisure and learning activities,
9%
including a financial wellness seminar conducted by business
Luzon 1% coach and motivational speaker Rex Mendoza. Discussed during
Visayas the seminar was the value of investing and regularly setting aside
90% a portion of their income for savings no matter how little they
Mindanao earn, and using credit wisely, such as allocating borrowed funds
to gainful purposes like investing in property or business or to
cover their family’s health and education needs.
 Business Review 43

CREDIT CARDS

In today’s economy, a credit card

is an important part of life. Aside
from being a more secure mode of
payment for just about everything, a
credit card is handy for emergencies.
We offer three credit card variants
that fit various consumer lifestyles
and spending habits. In 2017, we had
three big raffle promos and launched
the “#LiveRewarded with China Bank
Mastercard” campaign to make it China Bank Prime, China Bank Platinum,
even more rewarding for customers and China Bank World MasterCard Launched in 2015
to use their China Bank MasterCard
for gastronomic experiences
(“#DineRewarded”), for discovering
the world (“#TravelRewarded”), or for
making occasional shopping splurges

that they deserve (“#ShopRewarded”). Delights for every occasion

Our merchant partnerships were also We intensified our card usage
intensified so cardholders can enjoy programs with tie-ups with merchants
44,792 more perks and discounts. like Giordano, Burgoo, and Gumbo and
cards in force with tactical promotions like with Zalora
Big prizes and surprises for Chinese New Year, Island Rose
CHINABANK In February, we had the “Tokyo Holiday for Mother’s Day, and Techno Marine
Treats Raffle Promo” and gave away an for Father’s Day. We also established
all-expense paid vacation prize package programs with hotels, travel, and
for 2 to Tokyo, Japan. This was followed leisure partners like Raffles & Fairmont
in June with the “Splendid London Makati, Spectrum, Two Seasons, and
P5.2 billion Raffle Promo” that awarded a lucky The Oriental Hotels. Our ongoing
in gross billings in 2017 cardholder with the experience of a partnership with Mastercard Priceless
up 14% lifetime in London. We capped off the Experiences provided exciting cross-
year with the “12 Weeks of Christmas” border offers in Macau, Japan, Korea,
CHINABANK

campaign that truly brought the holiday and Singapore. New partnerships with
cheer to 920 daily winners of P1,000 online merchants like Lazada, ShopBack
worth of SM Gift Pass, 12 weekly and Jinio strengthened our online
winners of P20,000 worth of SM Gift presence. The year ended with over 60
merchants in total, and still growing.
P289 million Pass, and 1 grand raffle winner of
in installment billings P100,000 worth of SM Gift Pass.
44 China Bank Annual Financial and Sustainability Report 2017

Environmental, Social,
and Governance
 Environmental, Social, and Governance 45

W e take our responsibility to our

customers, employees, investors, and
society very seriously. While serving
our customers well is the core of our
business strategy, we approach all of
our stakeholders with the same sense
of responsibility and commitment.
We closely monitor the changing
environment in which we operate
to ensure that we remain relevant,
responsive, and able to capture and
manage our environmental, social,
and governance (ESG) issues on an
ongoing basis. We aim to manage the
impact of our activities and balance our
interests with those of our stakeholders
to ensure our long-term profitability,
drive economic progress, and generate
sustainable value for all.
 46 China Bank Annual Financial and Sustainability Report 2017

UNDERSTANDING WHAT MATTERS MOST

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 2017, we conducted a materiality assessment for the first time to identify and prioritize
material sustainability topics that are of significance to both the Bank’s business and our
stakeholders. We engaged an external consultant, Philippine Business for the Environment,
to provide additional rigor and analysis to the process.

Materiality Process
102-42, 102-46, 102-47

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

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.

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.

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.
 Environmental, Social, and Governance 47

Material Topics
102-47

Resulting from the materiality process are key topics that are highly significant to our stakeholders and to building a more
sustainable company. These topics will serve as our points for review in the succeeding reporting periods.

Category Material Topics How we measure our performance Boundary

Governance Efficiency in dispensing of fiduciary Alignment with BSP, SEC and PSE rules, Internal
duties and with international

Adherence to our core values best practices

GRI 102 Governance
Transparency
GRI 205 Anti-corruption
Trustworthiness
Economic Financial performance GRI 201 Economic Performance Internal
Pricing of products and services GRI 203 Indirect Economic Impacts and External
Managing risks
Environment Resource Management GRI 302 Energy Internal
GRI 303 Water
GRI 305 Emissions
People Employee retention and talent GRI 401 Employment Internal
management GRI 404 Training and Education
Healthy workplace GRI 403 Occupational Health and
Client relationship Safety
Local community development GRI 405 Diversity and Equal Opportunity
GRI 413 Local Communities
GRI 418 Customer Privacy
Value Creation Impact of our financial products on Financial contribution to SDG Investment Internal
sustainable development Areas and External
 48 China Bank Annual Financial and Sustainability Report 2017

Engaging our Our How we engage them

What matters to them What we are doing
stakeholders stakeholders and how often

102-40, 102-43, 102-44 Customers • Daily customer interactions: • Service quality • Continuous service,
face-to-face with personnel • Availability and accessibility process, and technology
at branches; via e-mail, of electronic banking improvements
Engaging with our telephone, and social media channels • On-going capacity building:
channels • Easy account opening and hiring people with the right
stakeholders is essential • Annual customer satisfaction loan application requirements qualifications, competencies,
surveys and processes and attitude and further
to building trust and • Regular visits to select • Sound financial advice developing their skills
strong relationships. customers • Capable personnel to through training
• Year-round events: market address concerns
By understanding their outlook briefings, wealth
needs, concerns, and forums, etc.
expectations, and more Investors • Regular investor meetings • Shareholder returns • Timely and transparent
• Periodic roadshows of Investor • Financial performance updates and disclosures
importantly, embedding Relations • Continued growth, well-
their feedback into our • Annual stockholders’ meeting managed risks

strategy and our daily Employees • Regular face-to-face meetings, • Career development • Continuous implementation
trainings, and digital • Work-life balance and enhancement of
business, we are able interactions through email, • Understanding of employee development
to develop long term- Intranet, and e-Learning Portal organizational goals and employee volunteerism
• Monthly area meetings programs
solutions, make responsible • Annual National Convention • Cascade of Wildly Important
business decisions, and • Annual performance evaluation Goals (WIGs)

perform better. We will Regulators • Regular correspondence via • Transparency and • Prompt response to inquiries
letters and email accountability and requests for explanation
continue to engage with • Regular audits • Compliance with relevant on certain matters
• Annual BSP examination Philippine laws, rules, and • Timely and transparent
our stakeholders on a regulations disclosures and regulatory
regular basis to keep • Updates on the performance compliance reports
of the Bank • Annual conduct of internal
a pulse on their rising • Responsible lending and external audits
expectations and the • Ethics and compliance
changing sustainability Analysts • Regular correspondence via • Shareholder returns • Prompt response to inquiries
letters and email • Financial performance • Timely and transparent
landscape. • Periodic roadshows of Investor • Continued growth, well- updates and disclosures
Relations managed risks • Complete, self-explanatory
• Periodic one-on-one dialogues disclosures

Suppliers and • Accreditation • Procurement policies • Cascade of policies and

contractors • Regular correspondence via regular updates
letters and email
• Regular dialogues during FRP
process
Industry • Membership • Continuing membership • Active membership
groups • Periodic general membership • Discussion of industry • Attendance in meetings,
meetings, working committee trends, updates, and conferences, and fellowship
meetings, conferences, and common concerns activities
fellowship activities • Adoption of new rules and • Participation in meetings with
regulations key policy decision makers
• Collaboration
• Participation in socio-civic
projects
NGOs and • Regular correspondence via • Support for projects and • Participation in and support
charitable letters and email initiatives of worthy causes
institutions • Periodic partnerships or • Collaboration • Continuous enhancement of
sponsorships • Feedback on activities community relations
• Post-event feedback conducted
 Environmental, Social, and Governance 49

GENERATING AND DISTRIBUTING VALUE

201-1

Our strong financial performance makes it possible for us to achieve our long-term growth
objectives and deliver sustainable value to our stakeholders. With solid earnings, we are able
to invest in technologies, branches, systems, and processes for delivering excellent customer
service, provide fair wages and benefits to our employees, distribute dividends to our
shareholders, and contribute to government revenues and to community development. We
are driven to succeed knowing that our success ripples through the economy and benefits the
people and the communities where we operate.

2017 DIRECT ECONOMIC VALUE

Distributed

Provisions Other Operating

P754.17 Costs
million P7.84
billion
Generated Retained
Payments to Payments
Employees to Providers of Capital
P32.64 P5.70 P10.89 P3.55
billion billion billion
billion

Payments to Government Community Investments

P3.92 P371.39
billion thousand

TOTAL P29.09 BILLION

As the revenue we generate

ECONOMIC VALUE GENERATED
progressively increases over the
years, economic value distributed 40
Billions

to our stakeholders also grew. In 35 32.64

2015, we distributed P21.29 billion 30 10.86%
26.99
in economic value, which increased 23.80
25 11.58%
12% to P23.86 billion in 2016. Last 10.56%
20
year, we distributed P29.09 billion 89.14%
in economic value, 22% higher 15
88.42%
89.44%
compared to 2016. 10

0
2015 2016 2017
Economic value distributed Economic value retained
 50 China Bank Annual Financial and Sustainability Report 2017

MANAGING OUR ENVIRONMENTAL IMPACT

102-11

We are committed to managing our operations responsibly and running our business in a
way that supports the protection of the environment. We recognize that our stakeholders
increasingly view environmental performance as an essential part of business performance
and thus strive to reduce our carbon footprint while we grow our business. Through the
years, we have been digitizing customer services and communications, investing in energy-
efficient technology in our offices and branches, and promoting the practice of reducing,
reusing, and recycling bank-wide through our Going Green Campaign. We are seeking ways
to become more eco-efficient in the coming years to further reduce our environmental
impact.

Water Consumption
303-1

HEAD OFFICE AND OTHER OFFICES

66,089 cubic meters

Water consumption in 2017

63% Head Office

22% Head Office Parking
11% Binondo Business Center
3% VGP, TMBC
0% Shaw, Haig
1% Valenzuela

BRANCHES ANNUAL AVERAGE WATER AVERAGE WATER

CONSUMPTION / YEAR / BRANCH CONSUMPTION IN BRANCHES
(China Bank only) In thousand pesos per month
3.0

2017 2016 2.18 2.11

2.4
P25,280 P26,180
391 branches* 352 branches* 1.8

* Excluding new branches opened during the year

1.2

We are currently monitoring our consumption 0.6

to come up with a water conservation plan
0
2016 2017
 Environmental, Social, and Governance 51

Energy Consumption and GHG Emissions

302-1, 302-2, 305-2, 305-3

HEAD OFFICE AND OTHER OFFICES

CO2
3,425 tonnes CO2 645 tonnes CO2
of Scope 2 GHG emissions in 2017 of Scope 3 GHG emissions in 2017

5,679,000 kWh
84% Head Office Building
1% Head Office Parking Admin - Motorpool 77%
(Diesel)
12% Binondo Business Center
Canteen 7%
2% BDO Equi-Tower (LPG)
1% VGP, TMBC Admin - Motorpool 16%
(Gasoline)
0% Shaw, Haig
0% Valenzuela

BRANCHES

AVERAGE ELECTRICITY
3.42% reduction CONSUMPTION IN BRANCHES
in electricity consumption despite In thousand pesos per month
opening 45 new branches 28.99
30
27.99

P1,000 savings 25

branch/month 20

15
ANNUAL AVERAGE ELECTRICITY
CONSUMPTION / YEAR / BRANCH 10
(China Bank only)
2017 2016 5

P335,920 P347,820 0
2016 2017
391 branches* 352 branches*
* Excluding new branches opened during the year
 52 China Bank Annual Financial and Sustainability Report 2017

SUCCEEDING WITH A HIGHLY ENGAGED

AND PRODUCTIVE TEAM

Our employees are vital to our ability to serve our customers well, run our business
profitably, and achieve our goals for the Bank and society at large. We are committed to
strengthen our high performance, close-knit family culture where everyone in the team
is contributing, continuously learning, and communicating openly. In line with this, we
welcome diversity, provide equal opportunities for employment, skills development, and
career advancement, and foster a safe and engaging work environment.

Diversity and Inclusion

102-7, 102-8, 401-1, 405-1
BY GENDER
As a leading bank in the Philippines
with nationwide operations, we 6,207
Female
believe that diversity in expertise,
perspectives, age, gender, and culture
in all our offices and branches makes 9,124
total employees in 2017
us a smarter organization, leading to
better decision-making and improved 2,917
business performance. The more BY COMPANY Male
diverse we are, the greater insight
we have of our customers and the 6,506 BY REGION
China Bank
better we can understand and serve 2,324
their needs. Thus, in both recruitment China Bank 5,931
Savings
and career advancement, we offer
equal opportunities to all potential 172
China Bank
and current employees based on their PCCI
qualifications and suitability, without 85 1,763
discrimination. 11 China Bank
26 Insurance
526 904
China Bank NCR
China Bank
Securities Luzon
Capital
2,134 Visayas
Mindanao
new employees hired in 2017
BY RANK BY AGE

5,982 4,804
543
711 2,835
Male

3,777
307
1,423 Rank and File Below 30 years old
Female Junior Officers 30-50 years old
Senior Officers Over 50 years old
 Environmental, Social, and Governance 53

Talent Development
404-1

We care deeply about our employees’ growth and

development and want to help them reach their full potential.
Professional training and development programs are offered
through both in-house and bank-sponsored external training
courses to build our employees’ operational, technical,
marketing, service, communication, and leadership skills.
In addition, we provide financial support to employees who
pursue Master’s degrees related to banking and investments
through our Tuition Refund Program for Graduate Studies*.
Compensation and Benefits
102-41, 401-2

We value our employees and want them to enjoy a

fulfilling career with us. We provide fair and competitive
compensation, consistent with industry standards, and 19,884**
comprehensive benefits, including group accident insurance, Total no. of
employees trained
term life insurance, comprehensive healthcare plan,
retirement benefits, employee assistance plans (loans, car
221,487
plan, tuition reimbursement, etc.), sick leave, vacation leave, Total training hours
and more. Our merit-based rewards system ensures that
promotions, merit increases, profit sharing*, and performance 11.14
bonuses are based on the individual employee performance Average training
hours per employee
rating and contributions to the Bank.

In 2017, we concluded a new collective bargaining agreement

(CBA) with the CBC Employees’ Association. The 2017-2020 BY GENDER
CBA*, provides for wage increases, improvements in benefits Employees trained
14,492 5,392
like HMO dependents, medical allowance, teller allowance,
rice subsidy, and sick leave benefits, accident insurance Training hours
coverage for employees with regular field assignments, 158,277 63,210
and a contract signing bonus for China Bank’s rank and file FEMALE MALE
employees nationwide.
BY EMPLOYEE CATEGORY
EMPLOYEES TRAINING
3,993 TRAINED HOURS
Total no. of employees covered by
CBA* Rank and file 14,317 174,977

Middle management 5,285 44,822

61%
Percentage of employees covered Senior management 282 1,688
by CBA*

* For parent bank only ** Employees participated in several courses during the year
 54 China Bank Annual Financial and Sustainability Report 2017

Career Advancement and Succession

404-2 1,074 EMPLOYEES
We encourage our employees to constantly strive for
PROMOTED IN 2017
excellence and empower them with the requisite tools,
training, and support to succeed in their careers and
contribute to the Bank’s success. We have established
clearly defined roles and expectations to ensure that each
425
employee works purposely and productively, motivating officers
them to pursue the many opportunities in the Bank for
career advancement. Our Performance Management
System ensures that promotions are based on meritorious
649
performance. Meanwhile, our Succession Management rank and file
Program ascertains that we have a pool of potential
successors for our future leadership needs. We conduct
periodic reviews of the talent pipeline and implement
individual career development plans.

Health and Safety

We take a holistic approach to ensure our
employees thrive at China Bank. We believe
that productivity is tied to safe and healthy
working conditions; thus, our human resources
policies and programs are not only in line with
occupational safety and health standards, but also
support and promote overall wellness and active
and balanced living. We hold annual earthquake
and fire drills, release regular health and safety
bulletins, and conduct annual physical check-ups
and various wellness events and sports activities.
We also have first aid kits at all branches and
well-stocked clinics at our head office, VGP and
Philcom offices, Binondo Business Center, and
Cebu Business Center.
 Environmental, Social, and Governance 55

Engagement and Work-Life Balance

ATTRITION
401-1
Officers Rank and File Total
We constantly engage with our employees to motivate and 2016 11.50% 19.13% 16.56%
energize them to do their best work everyday. With our open 2017 10.42% 14.57% 13.15%
communication approach, various engagement and work-
life integration programs (see page 56), and the inspiring
leadership of our senior management, our people feel that
EMPLOYEE TURN-OVER
they are doing work that matters, that we understand and
respond to what matters to them, and that they should Officers Rank and File Total
stay with China Bank because they truly matter to us. The 2016 305 996 1,301
progressive drop in our attrition rates reflects the increasing 2017 308 826 1,134
satisfaction of our employees with their jobs and the Bank.

Engagement Programs*

Our employees’ thoughts, opinions, and suggestions are important to us. We have programs in place to gauge genuine
employee sentiment and honest feedback at any point of their employment with us. The feedback and insights gained
are analyzed and used to improve existing processes, policies, and programs and to develop new ones to boost employee
engagement, productivity, and loyalty. We likewise have mechanisms in place to ensure that employees feel free to voice
out their concerns without fear of reproach.

SharePoint Café 4 Third Month Questionnaire

An idea-sharing program batches conducted A follow-up mechanism for monitoring the extent of
that utilizes the World in 2017 adjustment of new employees (rank and file and officers) on
Café method to facilitate their third month with the Bank with regard to their work,
collaborative dialogue with
55 training, relationships with peers and superiors.
total participants
bank officers to gain insights
on their concerns, ideas, level 7.8 235 1,053
of satisfaction, and reasons out of 10 officer respondents rank and file respondents
for choosing and staying with Average satisfaction in 2017 in 2017
the Bank. rating
8.05 8.86
out of 10 out of 10
Average satisfaction rating Average satisfaction
Voice Avenue 7 rating
A retention tool for assessing batches
rank and file employees’ of assessments
current disposition and in 2017
perception about their job and Exit Interview 684
the Bank to gain insights on 100 A mechanism for getting Exit interviews conducted
what makes employees stay, total participants
feedback from employees in 2017
what keeps them engaged, who leave the Bank for
and how to prevent future various reasons. 97%
of respondents said they
resignations.
will recommend China Bank
as a place of work

* For parent bank only

 56 China Bank Annual Financial and Sustainability Report 2017

Work-Life Integration Programs*

As a way of institutionalizing Habit 7 of The Seven Habits of Highly Effective People, one of our core programs on personal
effectiveness, we keep our team motivated, healthy, and energized with work-life integration programs (WLIPs). We place
prime importance on our employees’ personal growth and thus provide them with activities to enjoy other pursuits that will
contribute to their mental, physical, and emotional well-being. In 2017, a total of 18 WLIPs were conducted:11 in Manila, 6
in Cebu, and 1 in Cagayan de Oro.

MARCH
Self Defense for Females

JANUARY MAY
Basic Calligraphy Parent and Child: No Bake Desserts

JULY
Vismin Region: Makeup Workshop

JUNE JUNE
Gentle Flow Yoga VisMin Region: Basics of Baking

AUGUST NOVEMBER
Vismin Region: Basic Basic Painting Workshop
Photography Workshop

SEPTEMBER
VisMin Region: Meat
Preservation Techniques

* For parent bank only

 Environmental, Social, and Governance 57

SERVING CUSTOMERS WELL

102-43, 102-44

Our customers are the center of what we do at China Bank. We develop customer-centric
products, policies, and processes to create great customer experiences and build enduring
relationships of trust with our customers. Our Board is on top of our robust Consumer
Protection Framework which guides us in serving our customers, protecting their rights and
interests, and handling their requests, concerns, and complaints to their satisfaction.

Fair Treatment
We believe in treating all our customers fairly and honestly.
We provide clear, accurate, truthful, and accessible
information so customers can make informed decisions
about our products and services. All consumer information
materials mandated by the Bangko Sentral ng Pilipinas
(BSP) are prominently displayed in our branches. We make
recommendations in good faith and based on what is suitable
to our customers. We have policies in place to protect
customers from over-indebtedness. Moreover, our friendly
branch personnel and Customer Contact Center are trained
to answer questions (via phone, email, or social media) about
our products and services, explain the risks that certain
products or services carry, and advise customers on financial
matters.
written consent of the customer. Access to customer data is
Transaction Security restricted to authorized personnel only. The confidentiality of
The safety of our customers’ money is our number one China Bank customer data also extends to our subsidiaries,
priority, and we work hard to prevent our customers from affiliates, and third party suppliers and contractors.
becoming victims of financial crime. We have security
systems and protocols that are regularly monitored and Customer Assistance
updated to ensure the security of customer transactions We are driven to earn our customers’ loyalty through great
across all our banking channels. We also provide timely advice customer service. We appreciate the chance to assist them
via our branch personnel, posters, email, website, and social with any aspect of their accounts, our products or services,
media on guarding against scams and protecting ATM and and to make things right for them should they have
credit card and sensitive information like PINs and passwords. concerns. Our customers can reach us through a variety
Reporting captured, missing and stolen cards, and fraud cases of convenient channels: Customer Support Hotline, e-mail,
is easy through our 24/7 Customer Support Hotline. “Contact Us” page of our website, Facebook, Twitter, and
our vast network of branches nationwide. Our Customer
Data Privacy Contact Center (CCC), headed by our Chief Consumer
103-2 Assistance Officer, is our designated Consumer Assistance
We go to great lengths to provide a secure and confidential Office. Supported by our Customer Contact Management
environment to protect our customers’ data. We comply System (CCMS), CCC ensures that requests and concerns
with all applicable privacy laws and maintain customer data sent through any channel are well documented, efficiently
confidentiality except when a disclosure is obliged by the handled, and promptly investigated and resolved.
Court or other authorities, or disclosure is made with the
 58 China Bank Annual Financial and Sustainability Report 2017

Customer Satisfaction Survey Customer Interactions

Customer feedback is important to us. We encourage 81% of the customer interactions captured by our CCMS in
customers who visit our branches to let us know how we 2017 were inquiries and requests. Complaints only accounted
served them via a simple customer satisfaction survey. We for 5% from 6% in 2016.
have customer feedback drop boxes in our branches and
the feedback forms are collected and tallied on a monthly
basis. The 2017 overall results revealed that 93% of the
respondents are satisfied or very satisfied with our service.
10% Others
Customers rated us on Service – queue time, branch staff 5%
service for account opening and deposit/withdrawal, and Complain t
ATM services, and premises – overall look of the branches
and security guard.

58% 2017
27%
2017 CUSTOMER SATISFACTION SURVEY Inquiry Request
in Percentage of 2,094 Respondents

100

90

78
80 74 76

70 8% Others
60 6%
Complaint
50

40
60% 26%
Inquiry Request
30 2016
20 20
20 15

10
3 3 2 4 3 2
0
Very Satisfied Dissatisfied Very
Satisfied Dissatisfied

Overall Rating Services Premises

24/7 CUSTOMER SUPPORT (Press “0” to speak to a phone banker) 88-55-888 Metro Manila
Toll-free numbers: 001-800-1-888-5888 Hong Kong / Singapore / Korea / Thailand
1800-1888-5-888 (PLDT) Provinces 00-800-1-888-5888 Italy/China
1800-3888-5-888 (Digitel) Provinces 011-800-1-888-5888 USA/Canada
0011-800-1-888-5888 Australia
010-800-1-888-5888: 0061010-800-1-888-5888 (mobile phone/pay phone) Japan
 Environmental, Social, and Governance 59

REPORTED CONCERNS
2% 5%
Others 3% Others
2%
Deposits & Deposits &
Branch Banking Branch Banking

24%
Credit Card
71%
Alternative
Channels
54%
Alternative
2017 Channels 2016 39%
Credit Card

Reported Concerns Complaints Resolved

Although it is notable that the share of alternative channels 94% of the complaints received in 2017 were resolved within
(ATM, Internet Banking, Phone Banking, POS) increased the BSP standard turnaround time.
from 54% in 2016 to 71% in 2017, concerns related to these
channels generally decreased by 5%. Similarly, Credit Card-
6%
related concerns dropped to 24% as credit card processes Beyond TAT
were enhanced.

The common client concerns in 2017 were mostly related to

ATM withdrawals, captured cards and other online banking
transactions, such as bills payment and fund transfer. Credit 94%
Within
card-related concerns received were mostly on declined card 2017 TAT
transactions, statement-related complaints, and transaction
disputes. Despite the switch to EMV and the ensuing ATM
re-carding and deactivation of non-EMV ATM cards last year,
there was no increase in ATM-related concerns.

Overall, concerns received in 2017 were 27% less vs. 2016.

@ [email protected] (02) 519-0143 www.facebook.com/chinabankph

Customer Contact Center

China Bank Building, 8745 Paseo de Roxas www.chinabank.ph www.twitter.com/chinabankph
corner Villar Street, Makati City
1226 Philippines
 60 China Bank Annual Financial and Sustainability Report 2017

SUPPORTING OUR COMMUNITIES

413-1

We are committed to the well-being of the communities where we operate. By fostering

local economic development activities and providing jobs, as well as through community
engagement and charitable giving, we contribute economic and social benefits and help
address important community issues. Our community-based giving program encourages
employee volunteerism and builds a sense of shared pride in supporting causes and initiatives
that our employees are passionate about. Over the years, China Bank and China Bank Savings
(CBS) have made generous donations of time and resources to public schools, hospitals,
environmental organizations, and various charities through our branches and offices in the
communities where we operate.

MARCH Narra seedlings to soil-ready polyethylene bags, prune

overgrown roots of 300 Narra seedlings, transfer grown
9 PC Donation to Nagkaisang Nayon Narra seedlings to elevated seedling beds to get more
Elementary School, Quezon City sunlight, and plant Laniteng Gubat and Molave trees.
The first leg of China Bank and CBS' donation of personal
computers to help modernize public schools in the JULY
country.
18 Tulong sa Marawi
APRIL CBS turned over 200 student starter kits, 200
basic teaching kits, 100 hygiene kits, six boxes of slippers
27 Tindang Bigay Tulong Part 2 and assorted clothing in response to the urgent appeal of
China Bank’s rummage sale that raised over the Department Education for aid to teachers and primary
P15,000 to help fund the various projects of the Human school students of Marawi during the several weeks of
Resources Group’s Personal Social Responsibility fierce battles between government forces and insurgents.
Program.
24 PC Donation to Moonwalk National High
MAY School, Parañaque
The second leg of China Bank and CBS' donation of
15 Brigada Eskwela personal computers to help modernize public schools in
200 CBS volunteers helped clean and refurbish the country.
classrooms and campus facilities of 40 public elementary
and high schools in four Metro Manila cities and 15 AUGUST
provinces.
15 PC Donation to San Fernando Elementary
JUNE School, Pampanga
The third leg of China Bank and CBS' donation of
24 Buhay Punlaan personal computers to help modernize public schools in
In partnership with Haribon Foundation, China the country.
Bank employees and their relatives joined the forest
restoration activity at Buhay Punlaan, a nursery of 16 Donation to Philippine Red Cross' Blood
native tree species and living laboratory showcasing Samaritan Project
rainforestation technology in Lumban, Laguna. The China Bank donated 174 blood units to 62 indigent
Bank donated cash to the Haribon Foundation and the families as part of the Bank's continued humanitarian
volunteers helped bag soil mixture, transfer 200 grown support to the Philippine Red Cross.
 Environmental, Social, and Governance 61

SEPTEMBER NOVEMBER

14 Busog-Lusog Project 23 Project RAISE for Education/Empowerment

CBS joined the observance of Nutrition Month of Dumagats (RED)
with a Busog Lusog nutrition activity for Grade 1 pupils of CBS launched Project RED as an ongoing program
Lakandula Elementary School in Tondo, Manila. to support volunteer teachers of AGAP Buhay in the
Dumagat communities in Rizal province. The program
15 PC Donation to Santor Elementary School, aims to collect both new and pre-loved books, art
Bulacan supplies, teaching aids, and school materials for the
The fourth leg of China Bank and CBS' donation of personal benefit of the Remontado Dumagat communities in
computers to help modernize public schools in the country. upland Barangay Laiban in Tanay, Rizal and Talim Island in
Laguna de Bay.
Clean-up of the Las Piñas-Paranaque Critical
23 Habitat and Ecotourism Area (LPPCHEA) DECEMBER
In partnership with Haribon Foundation, China Bank
helped remove as much trash as possible from LPPCHEA, 18 Caring is Sharing Activity
considered as the last refuge for migratory birds in Metro China Bank employees shared the joy and
Manila. blessings of Christmas with the abandoned children
cared for by the Asilo de San Vicente de Paul. The
OCTOBER volunteers spent a fun-filled day with the children, shared
a sumptuous meal with them, and distributed 80 gift
DepED Venture: Alay sa mga Guro packs of school lunch kits, umbrellas, and tumblers. For
6 An event conducted by CBS to commemorate the institution, they donated 10 sacks of rice, canned
National Teachers’ Month and World Teachers Day goods and powdered milk, and vitamins for kids and
attended by 600 teachers and non-teaching staff from 59 adults.
public schools across Metro Manila. The highlight was the
exclusive seminar on financial wellness by leading financial 19 Regalong Pamasko Para sa mga Pamilyang
literacy and expert motivational speaker Rex Mendoza. Walang Tahanan
CBS employees distributed 144 comfort packages to
Run for Marawi homeless families along Roxas Boulevard, Manila. The
26 CBS employees joined the benefit run for displaced packages contained gifts of rice, pasta and noodle packs,
Marawi residents. The event was organized by the assorted canned goods, biscuits, sweets, juice mix,
Bankers Club of Negros Occidental and was held in Bacolod. drinking water, toys, and clothing.
 62 China Bank Annual Financial and Sustainability Report 2017

DOING BUSINESS THE RIGHT WAY

102-16

Good corporate governance is vital to China Bank’s success and sustainability. We are
committed to doing business the right way—in accordance with the law, the best practices,
and the best interest of our stakeholders. Our robust governance, compliance, and risk
management system ensures that we have a strong foundation to pursue our goals and
deliver on our commitments.

Guided by the principles of accountability, transparency, fairness, and integrity, we are

driven to continuously improve and uphold the highest standards of corporate governance
to remain strongly positioned for value creation.

Continuously Strengthening our Governance • Election of one female Independent Director,

102-12, 102-17 Margarita L. San Juan
• Appointment of a new President, William C. Whang
Our Board adopts a policy of full compliance with the • Updating of the diversity policy and its disclosure
Code of Corporate Governance (the “Code”). To carry out with the skill set matrix and the measurable
the Board’s mandate, the Compliance Office oversees the objectives – available in our Corporate Governance
effective implementation and monitoring of the Bank’s micro site: http://chinabank.ph/corgov.aspx
compliance with the Code. In 2017, we fully complied with • Reorganization of the Audit, Corporate Governance,
all the material requirements of a publicly-listed company, and Risk Oversight Committees
as set forth in the Code. To enhance our position as one of
the best-governed banks in the Philippines, we continue 4. Reviewed and revised the committee charters to align
to strengthen our corporate governance practices by with the latest issuances.
implementing new initiatives, including addressing the
few remaining recommendations in the Integrated Annual 5. Conducted the annual assessment for the Board, Board
Corporate Governance Report. level committees, and the President and Chief Executive
Officer (CEO).
1. Updated the Corporate Governance Manual (CG
Manual) to align with the recently issued regulations 6. Conducted an annual training for directors and officers
and international best practices. on corporate governance, anti-money laundering, data
privacy, and board skill on decision making (Butterfly
2. Enhanced the Related Party Transactions (RPT) Perspective).
framework, policy, processes, practices, and updated
the committee charter to comply with applicable rules Board of Directors
and regulations. The Board is the highest governing authority at China Bank.
The Board sets the tone for and leads the practice of ethical
3. Complied with the requirements of the Code for business conduct, guides our overall corporate philosophy
publicly listed companies and the ASEAN Corporate and direction, and carries out oversight responsibility
Governance Scorecard. The following are some of the for business and risk strategy, financial soundness, and
changes in the Board: regulatory compliance.
• Appointment of a lead independent director,
Roberto F. Kuan
 Environmental, Social, and Governance 63

The current Board is composed of 11 directors and two An executive director is defined in our CG Manual as a
advisors who bring with them diversity in skills, expertise, director who has executive responsibility of day-to-day
experience, age, gender, and educational background. Of operations of a part or the whole of the organization, while
the 11, two are executive directors, three are Independent a non-executive director has no executive responsibility and
and the rest are non-executive directors creating an does not perform any work related to the operations of the
appropriate mix that is commensurate to the size and corporation. Independent Directors are also non-executive
complexity of our operations. directors.

To ensure that directors can perform their duties to the Bank Independent Directors
diligently, our CG Manual states that directorships in other To create a strong element of independence in the Board,
publicly-listed companies shall be limited to five. we have three independent directors. To lead the Board in
cases where management has clear conflict of interest, a
Chairman and Chief Executive Officer Lead Independent Director was appointed in 2017 with the
102-23 following functions:
• Serves as an intermediary between the Chairman
The roles of Chairman of the Board and Chief Executive and the other directors when necessary;
Officer are clearly separated and their responsibilities • Convenes and chairs meeting of the non-executive
have been set out in our CG Manual. The Chairman, a non- directors; and
executive director, is responsible for the leadership and • Contributes to the performance evaluation of the
effective running of the Board, while the President leads Chairman, as required
the senior executive team in the day-to-day running of China
Bank, primarily responsible for the achievement of agreed We define an Independent Director as someone holding no
objectives and the execution of strategies as established by interests or relationships with China Bank, the controlling
the Board. shareholders, or the Management that would influence their
decisions or interfere with their exercise of independent
On October 31, 2017, Ricardo R. Chua who served as China judgment, among others.
Bank President & CEO for three years, and prior to that as
Chief Operating Officer for 20 years, officially retired. He
was succeeded by William C. Whang as our new President
on November 1, 2017.
 64 China Bank Annual Financial and Sustainability Report 2017

We have fully complied with all the applicable rules on their Retirement and Succession
nomination and election. And based on the 2017 annual The Board is responsible for ensuring and adopting an
assessment of directors, the Board was satisfied that our effective succession planning program for directors, key
three Independent Directors continue to be independent officers and management to ensure growth and a continued
and free from any business or other relationship that could increase in the shareholders’ value. To promote dynamism in
interfere with their exercise of independent judgment. the corporation, as a matter of policy, a director shall remain
in the Board of the Bank for as long he/she remains to be fit
As stated in the CG Manual, our independent directors and proper for the position of a director, in accordance with
serve a cumulative term of up to nine years (reckoned from the requirements of the MORB.
2012 based on the rules of the Securities and Exchange
Commission). While they are on the China Bank Board, they Succession, replacement or vacancy in the Board due to
are not allowed to hold interlocking directorships in more retirement or any other reason, is addressed in our By-
than five listed companies. Laws, stating that vacancies in the Board may be filled by
appointment or election of the remaining directors, if still
Board Nomination and Election constituting a quorum; otherwise, the stockholders shall fill
102-24 such vacancy in a regular or special meeting called for this
purpose.
We have a rigorous and transparent procedure for the
nomination and election of new directors to the Board to Board Orientation and Training Program
ensure a diverse and well-balanced approach. To the extent Continuous education is important to keep our Directors up-
practicable, directors may be selected from a broad pool to-date with industry developments and to strengthen the
of qualified candidates. The Board may use professional Board’s competencies in dealing with corporate governance,
search firms or other external sources of candidates when risk management, and strategic issues faced by the banking
searching for candidates for the Board. industry in general, and China Bank in particular.

The shareholders nominate candidates by submitting the We have a full orientation program for newly-elected
nomination to any member of the Nominations Committee, Directors, which includes branch visits and comprehensive
the Corporate Governance Committee, or the Corporate training materials and operations manuals, and a continuing
Secretary on or before the prescribed date. The Nominations education program for all our Directors, which includes
Committee reviews and evaluates the qualifications of the briefings on relevant new laws, risk management updates,
candidates in line with the fit and proper standards, the and changes in accounting standards at Board/Board
full Board confirms these candidates’ nominations, and Committee meetings and seminars on Corporate Governance
the shareholders elect the directors during the Annual and anti-money laundering conducted by SEC-accredited
Stockholders’ Meeting. training providers. In order to maintain professional integrity,
enhance his/her skills, knowledge and understanding of the
Upon their election, the Directors are issued a copy of their development in banking industry, the Directors are required
general and specific duties and responsibilities as prescribed to attend, at least once a year a training course/seminar on
by the Manual of Regulations for Banks (MORB), which corporate governance or relevant topics.
they acknowledge to have received and certified to have
read and fully understood. Copies of the acknowledgement Exclusive Corporate Governance Training for Directors
2017
receipt and certification are submitted to the Bangko Sentral and Key Officers
ng Pilipinas (BSP) within the prescribed period. Moreover, Exclusive Corporate Governance Training for Directors
2016
and Key Officers
the directors also individually submit a Sworn Certification
2015 Exclusive Corporate Governance Training
that they posses all the qualifications as enumerated in Exclusive Corporate Governance Workshop
2014
the MORB. These certifications are submitted to the BSP Anti-Money Laundering Seminar
after their election. Additional certifications are executed 2009 Anti-Money Laundering Seminar
Special Seminar on Corporate Governance for Bank
by Independent Directors to comply with the Securities 2002
Chairmen & CEOs
Regulation Code and BSP rules which are then submitted to
the SEC.
 Environmental, Social, and Governance 65

Corporate Secretary The Board is provided with the information and resources
To enable our Directors to discharge their duties efficiently needed to effectively discharge its fiduciary duty. The Board
and effectively, they have full and unrestricted access to is informed on an ongoing basis of the Bank’s performance,
Management and employees of the Bank and affiliated major business issues, new developments, and the impact
companies, external consultants and advisors, and the of the economic and regulatory environment. All Directors
Corporate Secretary. are supplied with the relevant information and materials
such as the agenda for each board meeting, together with
The Corporate Secretary is a senior, strategic-level detailed reports and proposal papers, at least five business
corporate officer who has the vital role of official record days before the board meeting date. Members of Senior
keeper responsible for the administrative side of board and Management are invited to attend board meetings to provide
committee meetings, corporate governance gatekeeper the Board with detailed explanations and clarifications on
responsible for overseeing sound board practices, and board proposals to enable the Board to make an informed decision.
liaison who works and deals fairly and objectively with the The meetings of the Board and its committees are recorded
board, management, stockholders and other stakeholders. in minutes, and all resolutions are documented.
The Corporate Secretary is required to attend all Board
meetings. In 2017, the China Bank Board had 17 meetings, including
the organizational meeting regularly held after the Annual
Stockholders’ Meeting.

Director Attendance %
Hans T. Sy (Chairman) 16 94
Gilbert U. Dee (Vice Chairman) 17 100
Ricardo R. Chua a 15 100
William C. Whang b 2 100
Peter S. Dee 17 100
Joaquin T. Dee 17 100
Herbert T. Sy 14 82
Harley T. Sy 15 88
Alberto S. Yao 17 100
Board Meetings Roberto F. Kuan 17 100
The Board meets at least once a month, set to be every first Jose T. Sio 16 94
Wednesday, to review China Bank’s financial performance, Margarita L. San Juan c 9 100
a
Retired on October 31, 2017
approve strategies, policies, and business plans, as well as b
Elected on November 1, 2017
to consider business and other proposals which require the c
Elected on May 4, 2017
Board’s approval. Special Board meetings may also be called
to deliberate and assess corporate proposals or business Board Committees
issues that also require Board approval. For Board decisions, 102-19
a minimum quorum of at least 2/3 of the Board members China Bank has nine board-level committees and five
present, unless a different voting requirement is required by management-level committees.
existing laws, rules, and regulations.
Each committee has a charter and operates within its
The directors are expected to prepare for, attend, and specific delegated authority and functions. The committee
participate in these meetings, and to act judiciously, in charters, which are reviewed annually and amended
good faith, and in the best interest of China Bank and our when necessary, are posted in our Corporate Governance
shareholders. microsite: http://chinabank.ph/corgov.aspx.

Under China Bank’s CG Manual, a Director may participate The members of the different committees are appointed
by telephone-conferencing when exigencies prevent him by the Board at the annual organizational meeting, taking
from attending a Board meeting in person. into account the optimal mix of skills and experience of the
members.
 66 China Bank Annual Financial and Sustainability Report 2017

Executive Committee (ExCom) has the powers of the

Board, when the latter is not in session, in the management
of the business and affairs of China Bank to the fullest
extent permitted under Philippine law.

The ExCom convened 41 times in 2017, including 2 joint

meetings with the Risk Oversight Committee (formerly Risk
Management Committee).

Director Attendance %
Hans T. Sy (Chairman) 36 88
Gilbert U. Dee 41 100
Peter S. Dee 34 83 Audit Committee oversees all matters pertaining to audit,
Joaquin T. Dee 40 98 primarily the evaluation of the adequacy and effectiveness of
Ricardo R. Chua a 33 94 the Bank’s internal control system and integrity of financial
William C. Whang b 6 100 statements, with explicit authority to investigate any matter
a
Attended 33 out of 35 meetings from January 2017 until his retirement
effective October 31, 2017 within its terms of reference, to ensure the strength of
b
Attended 6 out of 6 meetings from his election effective November 1, 2017 the Bank’s internal controls. It also appoints, reviews, and
concurs in the appointment or replacement of the Chief
Corporate Governance Committee is responsible for Audit Executive (CAE) and the External Auditor, and is
ensuring that the Bank’s Corporate Governance framework responsible for ensuring that the CAE and the internal and
is regularly reviewed and updated, and implemented external auditors remain independent, an annual review
accordingly at all times. It provides assistance to the is performed, and the Bank complies with the Institute of
Board by overseeing the orientation and training programs Internal Auditors’ International Standards for the Professional
for its members, as well as facilitating the performance Practice of Internal Auditing and Code of Ethics.
evaluation of the Board, Board-level committees and senior
management. The Audit Committee had 14 meetings in 2017, including
6 joint meetings with the Compliance and Corporate
The Corporate Governance Committee had 25 meetings Governance Committees
in 2017, including joint meetings with the following:
Audit Committee – 6, Compliance Committee – 4, and Director Attendance %
Nominations Committee – 15. Alberto S. Yao (Chairman) 14 100
Joaquin T. Dee 14 100
Roberto F. Kuan a 9 75
Director Attendance % a
Member from May 4, 2017
Roberto F. Kuan (Chairman) 20 80
Alberto S. Yao 25 100
Compliance Committee is tasked to monitor compliance
Hans T. Sy a 13 87
Joaquin T. Dee b 15 100 with established banking laws, rules and regulations
Margarita L. San Juan c 8 80 specifically in creating a dynamic and responsive compliance
a
Member up to May 3, 2017; attended 13 out of 5 joint meetings of risk management system to identify and mitigate risks that
Nominations & Corporate Governance Committees, 4 joint meetings of
Compliance & Corporate Governance Committees, and 6 joint meetings of may erode the franchise value of the Bank, and ensures that
Audit, Compliance and Corporate Governance Committees Management is doing business in accordance with the said
b
Member up to May 3, 2017; attended 15 out of 5 joint meetings of
Nominations & Corporate Governance Committees, 4 joint meetings of prescribed laws, including policies, procedures, guidelines
Compliance & Corporate Governance Committees, and 6 joint meetings of and best practices.
Audit, Compliance and Corporate Governance Committees
c
Member from May 4, 2017; attended 8 out of 10 meetings
The Compliance Committee convened 10 times in 2017,
including joint meetings with the Audit and Corporate
Governance Committees – 6, and with the Corporate
Governance Committee – 4.
 Environmental, Social, and Governance 67

Director Attendance % Compensation or Remuneration Committee provides

Hans T. Sy (Chairman) 9 90 oversight over the remuneration of senior management
Joaquin T. Dee 10 100 and other key personnel, ensuring that compensation is
Alberto S. Yao 10 100 consistent with the interest of all stakeholders and the
Bank’s culture, strategy, and control environment.
Risk Oversight Committee (formerly Risk Management
Committee) is responsible for the development and
The Compensation or Remuneration Committee had 4
oversight of the Bank’s risk management functions,
meetings in 2017.
including the evaluation of the effectiveness of the
enterprise risk management framework and ensuring that
Director Attendance %
corrective actions are in place to address risk management Roberto F. Kuan (Chairman) 3 75
concerns in a timely manner. It oversees the risk taking Hans T. Sy 4 100
activities of the Bank and ensures the continued relevance, Alberto S. Yao 4 100
comprehensiveness, and overall value of the institutional risk Harley T. Sy 4 100
Margarita L. San Juan 3 75
management plan.

Related Party Transactions Committee, composed entirely

The Risk Oversight Committee had 14 meetings in 2017,
of Independent Directors, is responsible for reviewing all
including 2 joint meetings with the ExCom.
material related party transactions (RPT) to ensure that
they are conducted at arm’s length basis and at fair terms
Director Attendance %
as those offered to non-related parties, overseeing the
Joaquin T. Dee (Chairman) a 5 100
Hans T. Sy 12 86 proper implementation of the RPT Policy, and ensuring that
Gilbert U. Dee a 5 100 corresponding transactions are duly identified, measured,
Alberto S. Yao 14 100 monitored, controlled, and reported.
Margarita L. San Juan b 8 89
a
Member up to May 3, 2017; attended 5 out of 5 meetings
The Related Party Transactions Committee had 12 meetings
b
Member from May 4, 2017; attended 8 out of 9 meetings
in 2017.
Nominations Committee, composed entirely of
Independent Directors, is responsible for reviewing and Director Attendance %
Roberto F. Kuan (Chairman) 12 100
evaluating the qualifications of all persons nominated to the
Alberto S. Yao 12 100
Board and other appointments that require Board approval, Margarita L. San Juan a 7 100
including promotions favorably endorsed by the Promotions a
Member from May 4, 2017; attended 7 out of 7 meetings
Review Committee. It is also tasked to review the
qualifications of the candidates to ensure that their qualities
and/or skills are appropriate for leading and assisting the
Bank in achieving its vision and corporate goals.

The Nominations Committee had 15 joint meetings with the

Corporate Governance Committee in 2017.

Director Attendance %
Roberto F. Kuan (Chairman) 13 87
Alberto S. Yao 15 100
Margarita L. San Juan a 8 80
a
Member from May 4, 2017; attended 8 out of 10 meetings
 68 China Bank Annual Financial and Sustainability Report 2017

Trust Investment Committee provides oversight functions receive performance-related compensation based on their
and overall strategic business development and financial performance, banking experience, position, and rank in the
policy directions to the Trust and Asset Management Group. Bank, while non-executive Directors do not receive any
It oversees the trust, investment management, and fiduciary performance-related compensation. The remuneration policy
activities of the Bank, and ensures that they are conducted for employees (staff to senior officers) are in the Governance
in accordance with applicable rules and regulations, and Policies section on page 75.
judicious practices. Moreover, it ensures that prudent
operating standards and internal controls are in place and Other Committees
that the Board’s objectives are clearly understood and duly
implemented by the concerned units and personnel. Management Committee (ManCom) formulates the
Bank’s business plans and budget as directed by the
The Trust Investment Committee convened 11 times in 2017. Board and reports to the Board on the implementation
of corporate strategies designed to fulfill the Bank’s
Director Attendance % corporate mission and business goals. At the operating
Herbert T. Sy (Chairman) 8 73
level, it covers top management matters such as, but not
Harley T. Sy a 5 100
Jose T. Sio 10 91 limited to, environmental assessment, objectives setting,
Peter S. Dee b 6 100 performance and budget review, asset/liability management,
Ricardo R. Chua c 9 90 organizational and human resource development, product
William C. Whang d 1 100 development, and major operating policies.
Patrick D. Cheng e 11 100
Carina L. Yandoc f - -
a
Chairman until May 2017; attended 5 out of 5 meetings Asset & Liability Committee (ALCO) oversees the
b
Member effective June 2017; attended 6 out of 6 meetings implementation of the asset-liability management policies that
c
Member until October 2017; attended 9 out of 10 meetings
d
Member effective November 2017; attended 1 out of 1 meeting govern the structure of the financial resources of the Bank.
e
Member Until November 2017
f
Member effective December 2017
Credit Committee (CreCom) reviews and approves all
credit applications within its credit approval authority. It also
Board Evaluation System
102-28 reviews all credit applications exceeding its credit approval
China Bank has an annual self-assessment to determine the authority, and if found acceptable, endorses such to the
individual Directors, Committees, the whole Board, and the ExCom or the Board of Directors.
President & CEO’s level of compliance with leading practices
and principles on good governance and to identify areas for Technology Steering Committee (TSC) oversees and
improvement. The Compliance Office summarizes the results manages the IT resources of the Bank. Except for strategic
of the evaluation and the Corporate Governance Committee initiatives and IT expenditures, all matters pertaining to IT
reports it to the Board. resource management and performance measurement are
fully delegated to the TSC as provided for in its Charter.
Based on the results of the 2017 evaluation, there are no
significant deviations and in general, the Bank has fully Operations Committee (OpsCom) reviews and
complied with the provisions and requirements of the recommends improvement on current operations, review,
CG Manual. design, and implementation of new projects.

Board Remuneration Board of Trustees of CBC Employees’ Retirement Plan is

China Bank Directors are entitled to a per diem of P500.00 responsible for the investment and disbursement of CBC
for attendance at each Board/Board Committee meeting Employees’ Retirement Plan assets in accordance with SEC
and to 4% of the Bank’s net earnings. Executive Directors regulations and the best interests of the plan holders.
 Environmental, Social, and Governance 69

ORGANIZATIONAL CHART
102-18

BOARD OF DIRECTORS

BOARD COMMITTEES

CORPORATE RELATED PARTY COMPENSATION EXECUTIVE TRUST RISK CORPORATE

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

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

CREDIT MANAGEMENT
COMMITTEE COMMITTEE

TECHNOLOGY
ASSET & LIABILITY
STEERING
COMMITTEE
COMMITTEE

PROJECT MGT.
OFFICE

INFORMATION SECURITY
SECURITY OFFICE OFFICE
Hanz Irvin S. Yoro Melecio C. Labalan, Jr.

CHIEF OPERATING
OFFICER
Romeo D. Uyan, Jr.

OPERATIONS
COMMITTEE

RETAIL BANKING FINANCE LENDING FINANCIAL BUSINESS CORPORATE

BUSINESS SEGMENT SEGMENT BUSINESS MARKETS OPERATIONS SUPPORT
Rosemarie C. Gan Patrick D. Cheng SEGMENT SEGMENT SUPPORT SEGMENT SEGMENT

Remittance Consumer Institutional CB Capital Treasury Wealth Centralized Credit Legal & Human Digital Investor &
& Credit Card Banking Banking Management Operations Management Collections Resources Banking Corporate
Business Business Relations
Renato K. Lilibeth R. Cariño Lilian Yu Ryan Martin Benedict L. Chan Angela D. Cruz Delia Marquez Melissa F. Corpus Belenette C. Tan Maria Rosanna Alexander C.
de Borja, Jr. L. Tapia Catherine L. Testa Escucha
 70 China Bank Annual Financial and Sustainability Report 2017

CONGLOMERATE MAP

Malls CHINA BANK

SAVINGS, INC. (CBSI)
98.3%
SM Prime Residential
PROPERTY Holdings, Inc. 50%

Citymall 34% Commercial CHINA BANK CAPITAL

CORPORATION (CBCC)
100%
Hotels &
Conventions
CHINA BANK SECURITIES CORP.
Leisure &
Tourism CBC ASSETS ONE (SPC), INC.

CHINA BANKING MANULIFE-CHINA BANK LIFE

SM CORPORATION (CHIB) ASSURANCE CORP. (MCBLIFE)
INVESTMENT 19.9% 40%
BANKING
CORPORATION
(SMIC)
Banco de Oro
44.7%

SM Stores CHINA BANK INSURANCE

BROKERS, INC. (CIBI)
100%
SM
Supermarket

SM Retail Inc. SM
RETAIL
77.3% Hypermarket
CBC PROPERTIES AND COMPUTER
CENTER, INC. (CBC PCCI)
100%
SaveMore 100%

Financial Allied Subsidiary Non-Financial Allied Subsidiary Financial Allied Associate

 Environmental, Social, and Governance 71

INTERNAL CONTROLS Compliance Unit. The Corporate Governance Unit assists the
102-11 CCO in its governance mandates, while the IT Compliance
Unit assists in the IT system support. All units in the Bank
The Board is responsible for the establishment and review have Compliance Coordinators to ensure that all risks
of China Bank’s system of internal controls, while the associated to the operations and business of the individual
day-to-day responsibility for internal control rests with units are identified, monitored, and mitigated.
Management. All of our employees are involved to a certain
degree in our internal control process. To enhance regulatory and compliance awareness and
continuously strengthen our compliance culture, the
Our internal control system is comprised of a well- Compliance Office cascades all recent laws, rules, and
defined organizational structure with clear authorities, regulations to all concerned and regularly conducts trainings
responsibilities, and operating procedures; a robust on corporate governance, related party transaction, bank
compliance function executed by the Compliance Office fraud, anti-money laundering, and consumer protection,
and overseen by the Compliance and Corporate Governance among others. It also acts as liaison for the Board and
committees; an enterprise risk management function Management on regulatory compliance matters with the
performed by the Risk Management Group (RMG) and regulatory agencies; provides advisory services, including
supervised by the Risk Oversight Committee; and an internal reviewing proposed China Bank products and services;
audit function, independently exercised by the Audit Division updates our Compliance Manual annually to align with
and watched over by the Audit Committee. recent regulatory requirements.

Based on the Audit Committee’s continuing review and RISK MANAGEMENT

monitoring of the Bank’s internal control system, in 2017, We recognize that the business of banking necessarily
material controls, risk management systems and framework entails risk, and that proper risk mitigation, not outright
remain adequate and effective to the Bank’s size and risk avoidance, is the key to long-term success. Our risk
complexity of transactions. management principle centers on determining how much
risk we are willing to bear for a given return, deciding if the
COMPLIANCE SYSTEM risks represent viable opportunities, and finding intelligent
Our Compliance Office plays a crucial role in fostering a approaches to managing risks. Our corporate governance
culture of group-wide compliance in all facets of the Bank, structure keeps pace with the changing risks that China Bank
assists the Board in the discharge of its governance function faces and will be facing in the coming years with a dynamic
to protect China Bank’s reputation and our stakeholders’ risk management program that calls for the continuing
interests, and ensures the Bank’s safety and soundness. reassessment of risks and controls and the timely reporting
In place is a compliance risk management system that is of these risks to the Board.
designed specifically to identify and mitigate risks that may
erode the franchise value of the Bank. The Risk Management Group (RMG) executes the risk
management function which is generally responsible for
Our Compliance Office is headed by the Chief Compliance identifying, assessing, monitoring and mitigating the key
Officer (CCO) who reports functionally to the Compliance risks inherent to the operations of China Bank as a financial
and the Corporate Governance committees and institution. RMG is headed by the Chief Risk Officer and
administratively to the Bank’s President. The Compliance reports to the Board through the Risk Oversight Committee,
function is supported by a duly approved Compliance Charter a separate board-level independent committee with explicit
that defines the duties and responsibilities, mandate, authority and responsibility for determining China Bank’s risk
independence, and manner on which compliance is tolerance level and overseeing the implementation of risk
implemented. At the helm of this function is the Regulatory management policies.
 72 China Bank Annual Financial and Sustainability Report 2017

Market and Liquidity Risk

The objective of our market risk policies is to obtain the best
balance of risk and return while meeting our stakeholders’
requirements. Meanwhile, our liquidity risk policies center
on maintaining adequate liquidity at all times to be in a
position to meet all obligations as they fall due.

To measure market risk exposures, we use Historical

Simulation Value-at-Risk (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 We have an existing Internal Credit Risk Rating System
and monitored through reports from the Market Risk (ICRRS) to measure in a consistent manner the credit risk for
Management System implemented in 2016 to enhance risk corporate borrowers with total assets, total facilities, or total
measurement and automate daily reporting. exposures amounting to P15 million and above. For retail
and small and medium entities and individual loan accounts,
Liquidity and interest rate risk exposures are measured we have a credit scoring system, the Borrower Credit Score
and monitored through the Maximum Cumulative Outflow (BCS). There is also an existing application scorecard for
(MCO) and Earnings-at-Risk (EaR) reports from the Asset consumer loans (auto loans, housing loans, credit card).
and Liability Management (ALM) system. The ALM system
was implemented in 2013 and upgraded in 2016 to a new In addition, the Board approved a Sovereign Risk Rating
version with modules for calculating liquidity ratios. Model in 2016 to assess the strength of the country rated
with reference to its economic fundamentals, fiscal policy,
Market risk, interest rate risk, and liquidity risk exposures are institutional strength, and vulnerability to extreme events.
adequately managed through limits and triggers that are in
accordance with the risk appetite of the Board. In 2014, RMG engaged Moody’s Analytics for the quantitative
and qualitative validation of the internal CRRS, which was
Since 2014, our Internal Audit has been independently followed by the model recalibration in 2015. In 2016, with
validating the internal risk measurement models – VaR, EaR the assistance of Teradata as our technology provider, RMG
and MCO – annually. The latest validation results concluded completed the statistical validation of the BCS using the
that these internal risk measurement models are appropriate same methodology applied to the validation of the corporate
for the measurement of its market, interest rate, and risk rating model. A validation of the recalibrated model
liquidity risks, respectively. recommended by Teradata and the RMG-enhanced model
was performed in 2017.
To further enhance the analysis of the Bank’s accrual
portfolio, RMG will continue to explore other metrics such as Operational, Business Continuity Management (BCM)
the Economic Value of Equity. and Information Technology (IT) Risk
We have a framework of policies, procedures, and the tools
Credit Risk to ensure that China Bank’s operational and IT risks are
Our policies for managing credit risk are determined at managed in a timely and efficient manner. RMG continues to
the business level with specific procedures for different effectively assess, monitor, control, and communicate such
risk environments and business goals. Risk limits and risks as well as take initiatives to further improve the Bank’s
thresholds have been established to monitor and manage disaster preparedness.
credit risk from individual and counterparties and/or group of
counterparties, and industry divisions. Periodic assessments RMG spearheads the bank-wide operational risk
are also conducted to review the creditworthiness of our identification and self-assessment process to determine
counterparties. priority risks areas, ascertain that proper checks and
 Environmental, Social, and Governance 73

balances are in place, and introduce additional measures to policies, processes, and procedures for market risk, liquidity
strengthen overall operational controls. In addition, RMG risk, credit risk, operational risk and compliance risks specific
maintains a Centralized Loss Database (CLD) where all to our Trust business. Legal, strategic, and reputational
the reported incidents of losses are recorded. Information risks were also incorporated in the Trust Risk Management
captured are processed and analysed to pinpoint general Guidelines. In 2017, our Trust and Asset Management Group
control weaknesses and operational vulnerabilities; and started testing a new trust banking enterprise solution which
collects data to establish the appropriate Key Risk Indicators would cover front, middle and back office functionalities,
with the corresponding thresholds which are monitored on a including risk and compliance.
periodic basis.
INTERNAL AUDIT
Our risk-based and scenario-driven BCM Program is Internal audit is vital to China Bank’s success and
underpinned by our commitment to always be of service to sustainability. Our Audit Division is responsible for the
our customers. The program includes appropriate resiliency internal audit function, assisting the Board of Directors,
strategies, recovery procedures, facilities, contingency through the Audit Committee, in the discharge of the
measures, communication, and crisis management plans Board’s governance and control responsibilities, and
across the organization to ensure we are prepared for any providing independent and objective assessment of China
disaster and capable of quickly resuming operations in Bank’s operations, including risk management, control
the event of a major disruption. RMG regularly conducts and governance processes to achieve the Bank’s goals
a Business Impact Analysis (BIA) to determine the critical and objectives. The Audit Division advocates the Institute
business processes and system dependencies. The of Internal Auditors’ new mission to enhance and protect
results of the BIA are used to further enhance our recovery organizational value by providing risk-based and objective
strategy and appropriately align with defined Recovery assurance, advice, and insight.
Point and Recovery Time Objectives. In 2017, several
disaster preparedness tests and simulation exercises The Audit Division, headed by the Chief Audit Executive, has
were carried out. RMG, IT Audit, and Information Security dual reporting lines to ensure independence: functionally to
Office assessed the results, covering both infrastructure the Audit Committee and administratively to the President.
and procedural matters and using existing regulations and It has a Board-approved Internal Audit Charter with the
industry best practices to benchmark the Bank’s ability to authority and access that cut across all functions, units,
respond to different scenarios. processes, records, and personnel; a risk-based plan/
approach that focuses on significant risks that are linked to
In managing the Bank’s IT Risks, we are guided by a robust Bank’s objectives and strategies; and experienced auditors
IT Risk Management Framework anchored on our business capable of performing their tasks competently and efficiently.
strategy, capabilities, and risk appetite. RMG identifies
IT-related vulnerabilities and determines the effectiveness In 2017, the Audit Division continued to improve audit
of our IT controls through the IT risk assessment process. efficiency and effectiveness, enhancing existing practices
All our IT Risk Management processes are aligned with and implementing new initiatives in line with its vision
the standards and operating principles provided in BSP to be an innovator of best practices which promotes
Circular No. 808 (Guidelines on IT Risk Management) and excellence, continuous growth, and improvement across the
BSP Circular No. 982 (Enhanced Guidelines on Information organization and the banking industry. The Data Analytics
Security Management). Unit was created under the IT Audit Department to optimize
the use of Audit Command Language Data Analytics,
Trust Risk an audit tool that assists auditors in the collection and
We manage our trust risk based on the regulations specified processing of data in a computerized environment. Some
in BSP Circular 766 or the Guidelines in Strengthening of the Unit’s main activities include developing scripts for
Corporate Governance and Risk Management Practices regular or repetitive audit procedures. To further enhance the
on Trust, Other Fiduciary Business, and Investment skills and competencies of our auditors, they attended a total
Management Activities. RMG continues to strengthen China of 26 internal trainings and 41 external trainings. In addition,
Bank’s risk management practices on Trust by enhancing the three of our IT auditors obtained international certifications,
 74 China Bank Annual Financial and Sustainability Report 2017

namely: Certified Information Systems Auditor (CISA), they did not have any disagreement with Management
Certified in Risk and Information Systems Control (CRISC) that could be significant to the Bank’s financial statements
and Certified Payment-Card Industry Security Implementer or their auditor’s report. Further, there are no matters
(CPISI). that in their professional judgment may reasonably be
thought to bear on their independence or that they gave
EXTERNAL AUDIT significant consideration to in reaching the conclusion that
Our external auditor fulfills a critical function in ensuring independence has not been impaired.
that our financial statements are accurate and presented
in accordance with the Philippine Financial Reporting SGV representatives are present at the Bank’s Annual
Standards. SyCip Gorres Velayo & Co./ Ernst & Young (SGV) Stockholders Meeting to respond to matters concerning
has been our external auditor for over 20 years, with the their audit of the Bank.
signing partners rotated every five years in compliance with
the SEC laws. SGV is again recommended for appointment at the 2018
Annual Stockholders Meeting.
Fiscal Year Audit Fees and Non-Audit Fees
Audit-Related Fees
2017 P8,192,800 P254,240
GOVERNANCE POLICIES
2016 P6,994,960 P448,970

The Board of Directors, Management, employees and

The above audit and audit-related fees cover services
shareholders believe that good corporate governance is a
rendered for the performance of the audit or review of the
necessary component of what constitutes sound strategic
Bank’s financial statements, including the combined financial
business management and will therefore undertake greater
statements of the Trust and Asset Management Group, and
effort necessary to create more and continuing awareness
the issuance of comfort letters relative to our 2017 Stock
within the organization.
Rights Offering and the Second Tranche offering of Long
Term Negotiable Certificates of Deposits. The audit fees
Code of Ethics
were taken up and approved by the Audit Committee at its
102-17
regular meetings on February 21, 2018 and February 15,
In the conduct of our business and dealings with
2017, respectively.
stakeholders, we are guided by the relevant rules and
regulations and our own CG Manual and Code of Business
Tax fees related to the audit of tax accounting and
compliance are already incorporated in the year-end audit Conduct and Ethics. The Manual contains our corporate
fees under Audit and Audit-Related Fees category as this is governance policies, structure, principles, as well as the
part of the audit process conducted by the external auditors. general and specific duties and responsibilities of the Board
and the individual Directors. It is regularly updated to ensure
The Board/Audit Committee likewise discussed, approved, alignment with the latest regulatory issuances. Meanwhile,
and authorized to engage SGV in non-audit work for the the Code provides clear guidelines on acceptable and
independent validation of votes in the annual stockholders’ unacceptable behavior and business practices.
meeting and for the compliance certificate issued to
international bank lenders. Payment for these services, and All China Bank Directors, officers, and staff are required
seminar fees are included under Non-Audit Fees. to abide by and fully comply with the Manual and the
Code. Our CCO monitors compliance with the Manual
Throughout the years that SGV has been auditing the and responds to inquiries from employees regarding good
Bank, it has not found any significant exceptions, such corporate governance policies and practices. Our Human
as cases of fraud or dishonesty, and any other matters Resources Group ensures that every China Bank employee
which could potentially result in material losses to the is aware of and upholds the Code. All new employees are
Bank and our stakeholders. In 2017, SGV confirmed that given a copy of the Code of Ethics booklet and undergo the
 Environmental, Social, and Governance 75

New Employees’ Orientation Course (NEOC) wherein the compensation for the same positions in comparable
Code is comprehensively discussed. organizations (similar size, organizational structure, business
risk, and management complexity).
For easy reference, both the Manual and the Code are
posted on our Intranet facility and our website Selection and Appointment of Senior Officers
China Bank is committed to developing a competent
Dividends workforce led by a high performing senior management
China Bank declares cash dividends at a payout ratio of at team. In accordance with the Corporate Governance
least thirty percent (30%) of the net income of the prior year, Manual, the Board is primarily responsible for approving the
subject to the conditions and limitations set forth in more selection of Top Management as led by the President. On
detail in the policy statement contained in the Corporate top of the “fit and proper” rule, senior officer appointments
Governance Manual. (VPs-up) are based on who is the most qualified and
best suited for the position, in line the Bank’s strategic
The Dividend Policy is an integral component of our Capital objective of having the highest-caliber leaders who inspire
Management Policy and Process. Its fundamental and the trust and confidence of our employees, customers,
overriding philosophy is sustainability. Dividend pay-outs investors, and other stakeholders. Our Top Management
are reviewed annually and are calibrated based on the prior and Human Resources Group Head ensure that the policies
year’s earnings while taking into consideration dividend and procedures for building our talent pipeline and filling
yields, future earnings streams and future business up key positions through internal promotion (Succession
opportunities. In declaring dividend payouts, we use a Management Program) or external sourcing are upheld
combination of cash or stock dividends. throughout the selection and appointment process. Senior
positions monitored by BSP with the rank of FVP and up are
Remuneration coursed through our Corporate Governance Committee and
We aim to attract, motivate, and retain the best people to approved by the Board.
best serve our customers. Our general remuneration policy
is to provide fair and competitive salary and benefits to Anti-Money Laundering
China Bank employees commensurate with their experience, China Bank is committed to the consistent and continuing
responsibilities, job grade/corporate rank, and position title. compliance with the Anti-Money Laundering (AML) law,
An employee’s level in the organization is determined by the rules, and regulations. The Board of Directors through the
job grade (for rank and file employees) or corporate rank (for Compliance Committee ensures that programs and controls
officers) identified with their position, which is the basis of are in place, implemented, monitored, and regularly updated
compensation and benefits relative to the banking industry. to ensure that our Bank, employees, products, and services
The position title of an employee defines the general are not used for money laundering and terrorist financing
description of his/her function (e.g., Customer Relations activities.
Assistant, Branch Head, Chief Operating Officer), while
the job grade or corporate rank determines the hierarchy in We have our own Money Laundering and Terrorist Financing
terms of pay and benefits (e.g. Rank and File IV, Assistant Prevention Program (MLPP) which embodies the policies
Vice President, Senior Vice President). and procedures in complying with the AML requirements.
The MLPP is regularly updated in line with regulatory
For senior officers, our remuneration policy is to likewise changes and best practices. Our Compliance Office is
provide them with fair and competitive salary and benefits responsible for managing, updating, and implementing the
commensurate with their experience, responsibilities, MLPP, including ensuring that our employees have sufficient
rank and position, and reasonably proportional to the and up-to-date knowledge of the AML law, regulations,
Bank’s economic situation. In determining senior officer and policies through communication and classroom and
compensation, we also benchmark against the executive electronic-based training.
 76 China Bank Annual Financial and Sustainability Report 2017

Whistleblowing Guidelines on Dealings in China Bank Shares

102-17 102-17
Without fear of any retaliation, our employees, customers, China Bank employs strict policies on securities transactions
shareholders, and third party service providers may report to support and uphold all applicable laws against insider
questionable or illegal activity, unethical behavior, fraud or trading. This prohibits directors, officers, and employees
any other malpractice by mail, phone or e-mail. The identity who are considered to have knowledge of material facts or
of the whistleblower is kept confidential and all reports are changes in the affairs of China Bank which have not yet been
investigated accordingly. If determined sufficient in form publicly disclosed—including any information likely to affect
and substance, the disclosure is referred either to the Audit the share price of the Bank’s stock—to directly or indirectly
Division or the Human Resources Group (HRG) for further engage in financial transactions that make use of “insider
investigation. If the report is found to be baseless, the information”. This also includes consultants and advisers and
Whistleblower is informed of the status within 24 hours all other employees who are made aware of undisclosed
from receipt. Meritorious disclosure, as may be determined, material information.
will be given recognition and may be entitled to an award
as deemed necessary by the HRG or the Investigation Any transactions by the Directors and principal officers
Committee. involving the Bank’s shares are required to be disclosed
within three business days from the date of the transaction.
The CCO is the primary driver in the implementation of
our Whistleblowing Policy. Disclosures are directed to the Anti Bribery & Corruption
CCO who is responsible for determining the sufficiency and 102-17

validity of the report. The policy also allows reporting of any China Bank is committed to honest and ethical business
disclosure to the Chief Audit Executive, Chief Risk Officer, practices and does not tolerate any form of bribery and
and the HRG Head. corruption. We take our legal responsibilities very seriously
and expect our directors and employees at all levels and
Reports/disclosures may be sent to any China Bank Officer grades to do the same. China Bank directors and employees
or to: are to act professionally, fairly, and with integrity in all our
business dealings and relationships wherever we operate;
CHIEF COMPLIANCE OFFICER thus, they 1) must never offer, promise, or give a financial
China Banking Corporation or other advantage to any person or party, including public
P. O. Box 2182, Makati Central Post Office officials, with the intention of inducing or rewarding improper
1226 Makati City, Philippines performance by them of their duties or to facilitate the
Mobile number: 0947-9960573 transaction of the Bank, and 2) must never directly or
E-mail address: [email protected] indirectly accept or agree to receive a financial or other
A disclosure form is also available at advantage as a reward for performing any act prejudicial to the
www.chinabank.ph Bank, the director/employee himself, or a third party. In 2017,
a total of 5,209 employees underwent anti-corruption training.
Conflict of Interest
102-17 Education and Training
Conflict of interest between the Bank and employees should China Bank’s compliance culture is constantly reinforced
be avoided at all times. However, should a conflict arise, through education and training. The Compliance Office
the interest of the Bank must prevail. Employees are not regularly briefs Compliance Coordinators in all branches and
permitted to have or be involved in any financial interests head office units to raise their awareness and understanding
that are in conflict or appear to be in conflict with their duties of the principles and concepts of good corporate
and responsibilities to China Bank. They are likewise barred governance, with which they are required to cascade to
from engaging in work outside of the Bank unless with their respective colleagues. All new hires of the Bank are
duly-approved permission, as well as work that lies in direct given mandatory orientations on Compliance, Anti-Money
competition with the Bank. Laundering, Whistle-Blowing, and Corporate Governance.
Lectures on compliance are also conducted during the
Officers Development Program (ODP) and Supervisory
Development Program (SDP).
 Environmental, Social, and Governance 77

Supplier/Contractor Selection Social Media Policy

We practice utmost professionalism in managing the Bank’s China Bank’s expansive brand of customer and public
resources. We process all matters of due diligence and service spans all modern channels of communication
compliance to ensure that any service or goods procurement including social media and online networking platforms. The
will pose the greatest benefit to the Bank, while posing Bank’s social media presence is guided by the mandate of its
little to no negative impact on stakeholders. This entails a Code of Ethics, and is one of the first in the industry to have
thorough evaluation on the procurement’s risk to personnel, policies in place to ensure that our employees’ interaction
company assets, the environment, equipment, and service with the online public is consistent with the Bank’s core
to customers. Consequently, we only transact with suppliers value of professionalism. Social Media Administrators serve
who have been assessed to have the necessary experience, as overseers of any online post made in the Bank’s name.
capability, and financial viability, and who conduct business In the same way, employees are constantly instructed
using economic, environmental and professionally sound and reminded to extend their professional demeanor to
methods while remaining compliant with all applicable laws and their personal online interactions. China Bank employees
regulations. are cautioned to abide by the policies on personal posts,
comments and statements relating to the Bank, that
China Bank is committed to fair market practices, engaging they may avoid online publication of any content or
in the services of suppliers and contractors that have statement disparaging the Bank or its clients, or otherwise
passed through a legitimate evaluation process that ensures jeopardize the Bank’s and its clients’ interests. They are
a fair competition among other service providers under likewise informed against posting of prohibited content
consideration. The Bank follows standards of objectivity, such as incitement to commit crime, drug paraphernalia,
impartiality and equal opportunity, and evaluates based on pornographic media, and the like. The Bank continues to
thorough criteria such as quality, price, service, and overall exert efforts to enhance its social media policies to better
value to the business, ensuring that we prevent any favoritism accommodate the guidelines on mitigating social media risk
or conflicts of interest. All prospective suppliers must also issued by the BSP.
undergo and pass a preliminary accreditation process before
any contract is awarded to them. They are also assessed on Related Party Transactions
their actual performance as compared to promised delivery 102-17
dates, quality of work / goods, and adherence to agreed
We recognize that Related Party Transactions (RPT) may give
specifications and purchase order prices.
rise to a conflict of interest; thus, we are careful in dealing
with related parties. Transactions with such parties are
Disclosure and Transparency
thoroughly reviewed and verified as having been conducted
The Bank is a staunch advocate of transparency and
in the ordinary course of business, at arm’s length basis, at
accountability, maintaining a high standard of disclosure to
fair market prices, and upon terms not less favorable to the
facilitate public understanding of the Bank’s financial condition
Bank, in the same terms as those offered to others, by the
and the state of its corporate governance in order for them
RPT Committee before they are endorsed to the Board for
to make a well-informed decision. All material information
approval. All material RPT are ratified by the stockholders
about China Bank is adequately and promptly disclosed in
during the Annual Stockholders’ Meeting.
accordance with SEC and PSE’s disclosure policy like the
publication of our quarterly financial statements in national
Our RPT Framework serves as a guide to the China Bank
broadsheets and presentation of a detailed annual report
group in dealing with related parties. The Bank’s RPT
for our Stockholders’ Meetings. Furthermore, we disclose
policy is kept relevant and aligned with recent regulatory
market-sensitive information like dividend declarations, joint
issuances. No director is allowed to participate in the
ventures and acquisitions, sale and disposition of significant
discussion or deliberation, including approval of a transaction
assets, as well as financial and non-financial information
where he is a related party, to prevent conflict of interest.
that may affect the decision of the investing public via press
releases on broadsheets and internal publications. We also
A related party transaction is considered material if it is
electronically file our disclosures through the Electronic
Disclosure Generation Technology (Edge) of PSE, making them P50 million and up. Starting 2018, our materiality threshold
available on the PSE website. Our corporate website is likewise shall be on a per transaction basis, aligned with recent
regularly updated to include the latest news and current regulatory requirements.
information about the Bank.
 78 China Bank Annual Financial and Sustainability Report 2017

Significant (P50M and above) Related Party Transactions as of December 2017

(In Philippine Peso unless otherwise indicated)
Type of Amount/ Type of Amount/
Name of Counterparty Name of Counterparty
Transaction Contract Price Transaction Contract Price
Angela T. Dee-Cruz Line 63.0 M 250.0 M
(Officer) Outstanding 17.0 M Investment in SSA $ 1.5 M
Alberto, Anthoniette & Joan Ross Yao China Bank Savings Inc. (Short Term) 200.0 M
Trust 1.2 B
(Director and his close family members) 84.0 M (Subsidiary) 500.0 M
Elizabeth Sy Trust 100.0 M
(Close family member of a director) 50.0 M 84.0 M
Elizabeth T. Sy & Eric Charles Uy Trust Bonds 50.0 M
(Close family members of a director) 70.0 M 199.0 M
Henry Sy, Sr. Loan 300.0 M 100.0 M
(Honorary Chairman) Outstanding 300.0 M Foreign Exchange 51.5 M
Hans T. Sy (Director) Trust 22.3 B JJACCIS Development Corporation Loan 600.0 M
50.0 M (Other Related Party) Outstanding 257.4 M
Herbert T. Sy & Hendrik T. Sy Trust 53.5 M 528.9 M
(Director) 61.4 M 729.0 M
Herbert T. Sy & 51.2 M Manulife Chinabank Life Assurance Corp. 2.4 B
Bonds
Herbert T. Sy, Jr. Trust 50.0 M (Associate) 2.6 B
(Director and his close family member) 100.2 M 665.0 M
Herbert T. Sy & Harley T. Sy (Director) Trust 100.0 M 1.4 B
Sps. Irwin and Consuelo Ponce National Reinsurance Corporation (Affiliate) Bonds 50.0 M
Line
(Close family member of a director) 127.0 M 574.3 M
400.0 M 752.4 M
100.0 M 3.8 B
14.0 B 3.3 B
7.3 B 300.4 M
1.6 B 4.1 B
BDO Universal Bank 4.8 B 600.0 M
Bonds/FX 309.9 M Bonds 3.1 B
(Affiliate)
20.1 B 875.0 M
265.6 M Rizal Commercial Banking Corporation
(Other Related Party) 900.0 M
8.3 B
250.0 M
600.8 M
3.3 B
742.5 M
200.0 M
11.5 B
500.0 M
4.2 B
501.6 M
600.0 M
4.1 B
4.7 B
FX 4.1 B
5.2 B
6.6 B
64.4 M
2.6 B
13.7 B
RCBC Savings Bank 250.8 M
7.7 B
Bonds 100.0 M
50.0 M (Other Related Party)
50.0 M
7.1 B
SM Investments Corporation Loan 8.0 B
1.0 B
(Stockholder) $ 32.5 M
850.0 M SM Investments Corp./Sybase Equity
150.5 M Investments Corp./ Multi-Realty
50.2 M Loan
Development Corp.
151.4 M (Stockholder / Affiliates) 15.5 B
100.9 M SM Prime Holdings Inc./Costa Del Hamilo,
202.7 M Inc./SM Hotels and Conventions Corp. Loan Line
BDO Private Bank, Inc. 252.1 M (Affiliates) 3.1 B
Bonds / FX 450.0 M SM Prime Holdings, Inc. (Affiliate) ROPA 161.6 M
(Affiliate)
1.1 B SM Development Corp. (Affiliate) Loan 1.1 B
600.0 M Summerhills Home Development Corp.
Loan
609.6 M (Affiliate) 500.0 M
50.0 M 100.0 M
306.7 M Sunlife Grepa Financial, Inc. 60.0 M
257.5 M Bonds 150.0 M
(Other Related Party)
150.0 M 144.0 M
303.5 M 50.0 M
BDO Private Bank Wealth Advisory and 514.4 M Sysmart, Inc. Loan 5.0 B
Bonds
Trust Group (Affiliate) 253.3 M (Stockholder) Outstanding 3.8 B
BDO Securities Corporation (Affiliate) Equity Investments 1.6 B Super Industrial Corp.
Loan
1.9 M (Other related party) 50.0 M
Anchor Land Holdings Inc. & Subsidiaries
1.7 B Contract to Sell
(Other Related Party) 348.3 M
CBC Trust Group 1.4 M
One Network Bank Bonds 400.0 M
Bonds 499.0 M
(A Group in the Bank) (Affiliate) 100.0 M
330.9 M
National Grid Corporation of the Philippines Loan 12.0 B
5.8 B
(Other Related Party) 79.0 M
5.9 B
Money Market 2Go Group, Inc. Loan 1.0 B
Fund 700.0 M (Other Related Party) 100.0 M
China Bank Capital Corporation Redemption of Posh Properties Development Corp. and
(Affiliate) Money Market 500.0 M Gotamco Realty Investment Corp. Loan
Bond 130.0 M (Other Related Party) 1.0 B
China Bank Securities Corporation Sale of CHIB Posh Properties Development Corp. 3.7 B
Loan
(Subsidiary) Shares 362.6 M (Other Related Party) 1.3 B
 Environmental, Social, and Governance 79

INFORMATION FOR STOCKHOLDERS

Date of Foundation
China Bank was incorporated on July 20, 1920 and opened for business on August 16, 1920. The Bank is registered with
the Securities and Exchange Commission under SEC registration number 443. China Bank’s amended By-laws may be
downloaded from our website, www.chinabank.ph, or requested from the Office of the Corporate Secretary:

ATTY. CORAZON I. MORANDO

Vice President and Corporate Secretary
11/F China Bank Building
8745 Paseo De Roxas corner Villar Street
Makati City 1226, Philippines
Tel. Nos.: (+632) 885-5131, 885-5132
Fax No.: (+632) 885-5135
Email: [email protected]

Record and Beneficial Owners Holding 5% or More of Voting Securities (as of February 28, 2018)
102-5

Name of Beneficial
Name, Address of Record Owner & No. of Shares
Owner & Relationship Citizenship Percentage
Title of Class Relationship with Issuer Held
with Record Owner

PCD Nominee Corporation *

37th Floor Tower I, The Enterprise Center, 6766 Various stockholders/
Common Non-Filipino 721,420,468 26.86%
Ayala Ave. corner Paseo de Roxas, Makati City clients
Stockholder
Sy Family
SM Investments Corporation
PCD Nominee
Common 10 Floor L.V. Locsin Bldg.,
th
Filipino 461,975,661 17.20%
Corporation
6752 Ayala Avenue, Makati City Stockholder
Stockholders
Sysmart Corporation Henry Sy, Sr. and Family
10th Floor L.V. Locsin Bldg., Sycamore Pacific
Common Filipino 415,995,323 15.49%
6752 Ayala Avenue, Makati City Corporation
Stockholder Stockholders
PCD Nominee Corporation *
37th Floor Tower I, The Enterprise Center, 6766 Various stockholders/
Common Filipino 402,575,155 14.99%
Ayala Ave. corner Paseo de Roxas, Makati City clients
Stockholder
* Based on the list provided by the Philippine Depository & Trust Corporation to the Bank’s transfer agent, Stock Transfer Service, Inc., as of February 28, 2018, The
Hong Kong and Shanghai Banking Corporation Limited (396,732,386 shares or 14.77%) 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.

Authorized and Issued Capital

Authorized Capital Issued Shares:
P33.0 Billion divided into 3.3 Billion shares 2,685,899,812 common shares
with a par value of P10.00 per share
 80 China Bank Annual Financial and Sustainability Report 2017

Summary of Filipino and Non-Filipino Holdings (as of February 28, 2018)

Number of
Nationality Number of Shares Percentage
Stockholders
Filipino 1,852 1,957,095,364 72.866%
Non-Filipino (PCD) 1 721,420,468 26.860%
Chinese 49 3,350,169 0.125%
American 20 2,678,157 0.100%
Australian 1 1,956 0.000%
British 2 97,631 0.004%
Canadian 3 463,403 0.017%
Dutch 1 62,198 0.002%
Spanish 1 107 0.000%
Taiwanese 3 730,359 0.027%
TOTAL 1,933 2,685,899,812 100%

Trading in Company Shares by and Total Shareholdings of Bank Directors and Executive Officers
(as of December 31, 2017)

A. Directors
Shareholdings Number Number Shareholdings
Name Position as of of Shares of Shares as of Percent
January 1, 2017 Disposed Acquired December 31, 2017
Hans T. Sy Chairman of the Board 2,584,069 - 957,350 3,541,419 0.132%
Gilbert U. Dee Vice Chairman 10,652,714 1,083,254 3,263,446 12,832,906 0.478%
William C. Whang Director & President 13,063 - 4,455 17,518 0.001%
Peter S. Dee Director 278,986 - 22,319 301,305 0.011%
Joaquin T. Dee Director 38,542,777 - 13,144,135 51,686,912 1.924%
Herbert T. Sy Director 380,747 - 129,845 510,592 0.019%
Harley T. Sy Director 194,785 - 66,426 261,211 0.010%
Jose T. Sio Director 2,623 - 894 3,517 0.000%
Alberto S. Yao Independent Director 6,619 - 542,257 548,876 0.020%
Roberto F. Kuan Independent Director 25,161 - 307,932 333,093 0.012%
Margarita L. San Juan Independent Director 71,019 - 24,219 95,238 0.004%
TOTAL 70,132,587 2.611%

B. Executive Officers (In addition to Messrs. Gilbert U. Dee and William C. Whang)
Shareholdings Number Number
Shareholdings as of
Name Position as of of Shares of Shares Percent
December 31, 2017
January 1, 2017 Disposed Acquired
Rosemarie C. Gan Executive Vice 96,965 - 33,067 130,032 0.005%
President
Patrick D. Cheng Senior Vice President 457,491 - 160,265 617,756 0.023%
& CFO
Alexander C. Escucha Senior Vice President - - 83,886 83,886 0.003%
Benedict L. Chan First Vice President II & - - 15,678 15,678 0.001%
Treasurer
Renato K. De Borja, Jr. First Vice President II 500 - 169 669 0.000%
Gerard T. Dee First Vice President II 5,864 - 272,000 277,864 0.010%
Delia Marquez First Vice President II 17,236 - 6,324 23,560 0.001%
Lilibeth R. Cariño First Vice President 3,049 - 1,118 4,167 0.000%
Angela D. Cruz First Vice President 1,222,851 - 417,025 1,639,876 0.061%
Elizabeth C. Say First Vice President 2,561 - 872 3,433 0.000%
Shirley G.K.T. Tan First Vice President 11,910 - 953 12,863 0.000%
Maria Rosanna Catherina First Vice President - - 6,340 6,340 0.000%
L. Testa
Stephen Y. Tan First Vice President - - 2,746 2,746 0.000%
TOTAL 2,818,870 0.105%
GRAND TOTAL 72,951,457 2.716%
 Environmental, Social, and Governance 81

MARKET INFORMATION

Principal market where the equity is traded: Philippine Stock Exchange, Inc. (PSE)

Market Value
Actual Prices
2017 HIGH LOW CLOSE 2017 HIGH LOW CLOSE
Jan - Mar 41.55 38.00 40.70 Jan - Mar 39.50 33.50 39.15
April - Jun 41.60 34.50 36.70 April - Jun 40.25 37.00 38.00
Jul – Sept 36.90 35.00 35.35 Jul – Sept 39.00 37.60 38.00
Oct – Dec 36.20 32.80 33.30 Oct – Dec 38.30 37.60 38.00

Adjusted Prices (due to stock rights and 8% stock dividend)

2017 HIGH LOW CLOSE 2017 HIGH LOW CLOSE
Jan - Mar 36.65 33.51 35.90 Jan - Mar 36.57 31.02 36.25
April - Jun 36.69 31.94 33.98 April - Jun 38.50 35.23 38.00
Jul – Sept 34.17 32.41 32.73 Jul – Sept 39.00 37.60 38.00
Oct – Dec 34.50 32.78 33.30 Oct – Dec 38.30 37.60 38.00

Market value as of December 29, 2017 (last trading day): P33.30

Price Information as of February 28, 2018 (latest practicable trading date): P35.20

Dividend History
2017 2016 2015 2014 2013
Stock Dividend 8% 8% 8% 8% 10%
Cash Dividend 8% 10% 10% 10% 12%

Investor Relations
Inquiries from investors, analysts, and the financial community are handled by the Investor & Corporate Relations Group:

ALEXANDER C. ESCUCHA
Senior Vice President and Head
Investor and Corporate Relations Group
28/F BDO Equitable Tower
8751 Paseo De Roxas
Makati City 1226, Philippines
Tel. No.: (+632) 885-5609
Email: [email protected]
82 China Bank Annual Financial and Sustainability Report 2017

SETTING THE TONE AT THE TOP:

OUR BOARD OF DIRECTORS

HENRY SY, SR. HANS T. SY

Honorary Chairman and Advisor to the Board Chairman (Non-executive director)
93 years old, Filipino 62 years old, Filipino
Founder: SM Group 31 years on the China Bank Board
Chairman Emeritus: SM Investments Corp.*, Nominated by: Sysmart Corporation
BDO Unibank, Inc.*, and SM Prime Holdings, Inc.* Current China Bank Board Committee memberships:
Education: Associate in Commercial Science, Executive and Compliance (Chairman),
Far Eastern University; Honorary Doctorate in Risk Oversight, and Compensation or Remuneration
Business Management, De La Salle University Director and Chairman of the Executive Committee:
SM Prime Holdings, Inc.*
Adviser to the Board: SM Investments Corp.*
Education: Bachelor of Science in Mechanical
Engineering, De La Salle University

* Publicly-listed company
 Board of Directors 83

GILBERT U. DEE WILLIAM C. WHANG PETER S. DEE

Vice Chairman (Executive director) Director and President (Executive director) Director (Non-executive)
82 years old, Filipino 59 years old, Filipino 76 years old, Filipino
48 years on the China Bank Board Less than 1 year on the China Bank Board 40 years on the China Bank Board
Nominated by: Linda Susan T. Mendoza Nominated by: George C. Yap Nominated by: Nancy D. Yang
Current China Bank Board Committee Current China Bank Board Committee Current China Bank Board Committee
memberships: Executive memberships: Executive and memberships: Executive and Trust
Chairman: CBC Properties and Trust Investment Investment
Computer Center, Inc. (CBC-PCCI) Chairman: China Bank Securities Corp. (CBSC) Director: CBC-PCCI, CBC-IBI, Hydee
and Union Motor Corp. Director: China Bank Savings, Inc. (CBSI), Management & Resources Corp.,
Director: Super Industrial Corp. China Bank Insurance Brokers, Inc. Commonwealth Foods, Inc., and
Education: Bachelor of Science in (CBC-IBI), China Bank Capital GDSK Development Corp.
Banking, De La Salle University; Corp. (CBCC), CBC-PCCI, Manulife Independent director: City & Land
Masters in Business Administration, China Bank Life Assurance Corp. Developers, Inc.* and Cityland
University of Southern California (MCBLife), and BancNet, Inc. Development Corp.*
Education: Bachelor of Science in Former President & CEO: China Bank
Commerce, Major in Business Management, Education: Bachelor of Science in
De La Salle University Commerce, De La Salle University/
University of the East; Special Banking
Course, American Institute of Banking

* Publicly-listed company
84 China Bank Annual Financial and Sustainability Report 2017

SETTING THE TONE AT THE TOP:

OUR BOARD OF DIRECTORS

HERBERT T. SY JOAQUIN T. DEE HARLEY T. SY JOSE T. SIO

Director (Non-executive) Director (Non-executive) Director (Non-executive) Director (Non-executive)
61 years old, Filipino 82 years old, Filipino 58 years old, Filipino 78 years old, Filipino
24 years on the China Bank Board 33 years on the China Bank Board 16 years on the China Bank Board 10 years on the China Bank Board
Nominated by: Sysmart Corporation Nominated by: Christopher T. Dee Nominated by: SM Investments Nominated by: SM Investments Corp.
Current China Bank Board Current China Bank Board Corp. Current China Bank Board
Committee memberships: Committee memberships: Current China Bank Board Committee membership:
Trust Investment (Chairman) Executive, Audit, and Compliance Committee membership: Trust Investment
Chairman: Supervalue, Inc., Chairman: JJACCIS Development Compensation or Remuneration Chairman: SM Investments Corp.*
Super Shopping Market, Inc., Corp. Director: SM Investments and Belle Corp.*
Sondrik, Inc., and Sanford Director/President: Enterprise Corp.*, SM Retail Inc., Director: Atlas Consolidated
Marketing Corp. Realty Corp. and SM Synergy Properties Mining and Development
Director: SM Prime Holdings, Inc.* Director/Treasurer: Suntree Holdings Corp. Corp.*, Concrete Aggregates
and National University Holdings Corp. Education: Bachelor of Science in Corp.*, OCLP Holdings,
Education: Bachelor of Science Education: Bachelor of Science in Commerce, Major in Finance, Inc., Manila North Tollways
in Management, De La Salle Commerce, Letran College De La Salle University Corp., and CityMall Commercial
University Centers, Inc.
Adviser: Premium Leisure Corp.*
and BDO Unibank, Inc.*
Adviser of Audit Committee / Risk
Oversight Committee: SM Prime
Holdings, Inc.*
President: SM Foundation, Inc. and
GlobalFund Holdings, Inc.
Education: Certified Public Accountant;
Bachelor of Science in Commerce,
Major in Accounting, University
of San Agustin; MBA, New York
University, U.S.A.

* Publicly-listed company
 Board of Directors 85

ROBERTO F. KUAN ALBERTO S. YAO MARGARITA L. RICARDO R. CHUA

Lead Independent Director Independent Director Advisor to the Board
69 years old, Filipino 71 years old, Filipino SAN JUAN 66 years old, Filipino
13 years on the China Bank Board Independent Director Former President & CEO:
12 years on the China Bank Board
Committee memberships: 64 years old, Filipino China Bank
Current China Bank Board
Audit (Chairman), Corporate Less than 1 year on the China Bank Director: CBSI, CBC-IBI,
Committee memberships:
Governance, Compliance, Risk Board CBC-PCCI, CBCC, CAVACON
Corporate Governance,
Oversight, Nominations, Current China Bank Board Corp., and Sun & Earth Corp.
Nominations, Compensation
Compensation or Remuneration, Committee memberships: Education: Certified Public
or Remuneration, Related
and Related Party Transactions Risk Oversight (Chairman), Accountant; Bachelor
Party Transactions (Chairman),
Independent Director: CBSI, Corporate Governance, of Science in Business
and Audit
CBCC, and CBSC Nominations, Compensation or Administration, Major in
Independent Director: CBSI, CBCC,
President & CEO: Richwell Trading Remuneration, and Related Accounting, University
CBSC, and Far Eastern
Corp., Richwell Phil., Inc., Party Transactions of the East (cum laude);
University, Inc.*
Europlay Distributor Co., Independent Director: CBSI and MBM, AIM
Member of the Board of Trustees:
Inc., and Internationale Globale CBCC
St. Luke‘s Medical Center, SLMC
Marques, Inc. Education: Bachelor of
Global City, Inc.,St Luke‘s
President: Richphil House Inc. Science in Business
College of Medicine-William
and Megarich Property Administration, Major in
H. Quasha Memorial, Brent
Ventures Corp. Financial Management,
International School, Inc., Seaoil
Member: Philippine Constitution University of the Philippines;
Phils., Inc., Roosevelt College Inc.,
Association Advance Bank Management, AIM
and Towers Watson Insurance
Brokers Philippine Inc. Education: Bachelor of Science
Education: Bachelor of Science in in Business Administration,
Business Administration, University Minor in Accounting, Mapua
of the Philippines; Masters in Institute of Technology
Business Management,
Asian Institute of Management
(AIM); Honorary Doctorate in
Humanities, Lyceum Northwestern
University

* Publicly-listed company
 86 China Bank Annual Financial and Sustainability Report 2017

MAKING IT HAPPEN:
OUR MANAGEMENT COMMITTEE

1 3

4 6

7 8

1 Gilbert U. Dee, Vice Chairman of the Board 2 William C. Whang, President 3 Romeo D. Uyan, Jr., Executive Vice President and Chief Operating Officer
4 Patrick D. Cheng, Senior Vice President and Chief Finance Officer 5 Rosemarie C. Gan, Executive Vice President and Segment Head of Retail Banking
Business 6 Alberto Emilio V. Ramos*, Executive Vice President and President of China Bank Savings, Inc. 7 Alexander C. Escucha, Senior Vice President
and Head of the Investor and Corporate Relations Group 8 Ryan Martin L. Tapia, President, China Bank Capital Corporation

*Ex-officio member
 Management Team 87

9 11

10

12 14

13

15 16

9 Benedict L. Chan, First Vice President, Treasurer, and Head of Treasury Group 10 Lilian Yu, First Vice President and Head of Institutional Banking Group
11 Renato K. De Borja, Jr., First Vice President and Head of Remittance and Credit Card Business Group 12 Jose L. Osmeña, Jr., First Vice President
and Deputy Group Head of Retail Banking Business 13 Delia Marquez, First Vice President and Head of Centralized Operations Group and Business Process
Management Division 14 Lilibeth R. Cariño, First Vice President and Head of Consumer Banking Group 15 Ananias S. Cornelio III*, First Vice President
and Chief Risk Officer 16 Maria Rosanna Catherina L. Testa, First Vice President and Head of Human Resources Group

*Ex-officio member
 88 China Bank Annual Financial and Sustainability Report 2017

OUR SENIOR OFFICERS

1 9 17

5 13 21

25

2 10 18

6 14 22

26

3 11 19

7 15 23

27

4 12 20

8 16 24

CORPORATE SECRETARY
1 Corazon I. Morando

FIRST VICE PRESIDENTS

2 Cristina P. Arceo, Division Head, Treasury Group-Fixed Income 3 Filemon Cecilio A. Cabungcal, Cluster Head, Treasury Group-Sales Cluster 4 Virgilio O. Chua,
seconded to China Bank Capital as Managing Director, Treasurer, and Investment Banking Head 5 Melissa F. Corpus, Group Head, Credit Management Group
6 Angela D. Cruz, Group Head, Wealth Management Group 7 Gerard Majella T. Dee, Division Head, IBG-Commercial Banking 2 8 Maria Luz B. Favis, Division Head,
Asset Quality & Recovery Management 9 Victor O. Martinez, Division Head, IBG-Corporate Banking 2 10 Elizabeth C. Say, Division Head, RBB-Branches Administration
11 Shirley G.K. T. Tan, Region Head, RBB-Metro Manila West Region 12 Stephen Y. Tan, Region Head, RBB-Visayas Region 13 Marisol M. Teodoro, seconded to
China Bank Securities as President and CEO 14 Geoffrey D. Uy, Division Head, Risk Management Group-Market and Liquidity Risk

VICE PRESIDENTS
15 Luis M. Afable,Jr., Division Head, IBG-Factoring 16 Layne Y. Arpon, Division Head, IBG-Corporate Banking 1 17 Betty L. Biunas, Team Head, IBG-Commercial Banking 2,
Team 15 18 Richard S. Borja, Division Head, Centralized Operations Group-Binondo Business Center 19 Victor Geronimo S. Calo, Division Head, RBB-Branch Operations
Support 20 Jeannette H. Chan, Center Head, RBB-Metro Manila West Region, Binondo Business Center 21 Marie Carolina L. Chua, Division Head, Alternative Channels
22 Domingo P. Dayro, Jr., Division Head, Cash Management 23 James Christian T. Dee, seconded to China Bank Savings as Treasury Head 24 Aileen Paulette S. De Jesus,
Chief Compliance Officer and Head of Compliance Office 25 Norman C. Del Carmen, Division Head, TAMG-Investment and Trading, 26 Gemma B. Deladia, Division Head,
TAMG-Trust Operations and Finance 27 Therese G. Escolin, Cluster Head, Wealth Management Group-Business Development, Makati Cluster
 Management Team 89

28 36 44

32 40 48

52

29 37 45

33 41 49

53

30 38 46

34 42 50

54

31 39 47

35 43 51

28 Madelyn V. Fontanilla, Division Head, RBB-Branch Operations 29 Cesare’ Edwin M. Garcia, Deputy Group Head, Wealth Management Group 30 Cristina F. Gotuaco,
Division Head, IBG-Commercial Banking 1 31 Jerry Ron T. Hao, Division Head, Treasury Group-Foreign Exchange & Derivatives 32 Ma. Cristina C. Hernandez, Department
Head,Treasury Group-Financial Institution 33 Marlon B. Hernandez, Division Head, Remittance Business 34 Shirley C. Lee, Account Officer, RBB-Metro Manila West
Region, Binondo Business Center 35 Carina L. Yandoc, Division Head, TAMG-Sales 36 Mary Ann T. Lim, Group Head, TAMG 37 Juan Jesus C. Macapagal, Team Head,
IBG-Corporate Banking 3, Team 7 38 Jennifer Y. Macariola, Cluster Head, Wealth Management Group-Business Center, Kalookan 39 Dorothy T. Maceda, Division Head,
Central Accounting 40 Mandrake P. Medina, Region Head, RBB-South Luzon Region 41 Jocelyn T. Pavon, Area Head, RBB-Metro Manila West Region, Area II
42 Danilo T. Sarita, Business Center Head, RBB-Metro Manila West Region, Kalookan Business Center 43 Francisco Eduardo A. Sarmiento, Division Head, Centralized
Operations Group-Treasury Operations 44 Clara C. Sy, Region Head,RBB-Metro Manila East Region 45 Belenette C. Tan, Group Head, Legal and Collection
46 Irene C. Tanlimco, Cluster Head, Wealth Management Group-Business Development, Binondo Cluster 47 Manuel M. Te, Region Head, RBB-Metro Manila South Region
48 Jasmin O. Ty, Area Head, RBB-Metro Manila North Region, Area III 48 Noemi L. Uy, Region Head, RBB-Metro Manila North Region 50 Virginia Y. Uy, Department Head,
Business Process Management Division 51 Clarissa Maria A. Villalon, Division Head, CBG-Operations 52 Charon B. Wambangco, Division Head, CBG-Real Estate Marketing
53 George C. Yap, Team Head, IBG-Corporate Banking 2, Team 4 54 Marilyn G. Yuchenkang, Chief Audit Executive and Head of Audit Division

RBB- Retail Banking Business IBG - Institutional Banking Group CBG - Consumer Banking Group TAMG - Trust and Asset Management Group
90 China Bank Annual Financial and Sustainability Report 2017

CHINA BANK MANAGEMENT TEAM

VICE CHAIRMAN PRESIDENT EXECUTIVE VICE PRESIDENTS SENIOR VICE PRESIDENTS

Gilbert U. Dee William C. Whang Rosemarie C. Gan Patrick D. Cheng
Alberto Emilio V. Ramos Alexander C. Escucha
Romeo D. Uyan Jr.

FIRST VICE PRESIDENTS VICE PRESIDENTS

Cesaré Edwin M. Garcia Francisco Eduardo A. Sarmiento
Cristina P. Arceo Luis M. Afable, Jr.
Cristina F. Gotuaco Clara C. Sy
Filemon Cecilio A. Cabungcal Juan Emmanuel B. Andaya
Jerry Ron T. Hao Belenette C. Tan
Lilibeth R. Cariño Layne Y. Arpon
Ma. Cristina C. Hernandez Irene C. Tanlimco
Benedict L. Chan Betty L. Biunas
Marlon B. Hernandez Manuel M. Te
Virgilio O. Chua Richard S. Borja
Shirley C. Lee Jasmin O. Ty
Ananias S. Cornelio III Victor Geronimo S. Calo
Regina Karla Libatique Noemi L. Uy
Melissa F. Corpus Jeanette H. Chan
Mary Ann T. Lim Virginia Y. Uy
Angela D. Cruz Marie Carolina L. Chua
Juan Jesus C. Macapagal Clarissa Maria A. Villalon
Renato K. De Borja, Jr. Domingo P. Dayro, Jr.
Jennifer Y. Macariola Charon B. Wambangco
Gerard Majella T. Dee Aileen Paulette S. De Jesus
Dorothy T. Maceda Carina L. Yandoc
Maria Luz B. Favis James Christian T. Dee
Mandrake P. Medina George C. Yap
Delia Marquez Norman D.C. Del Carmen
Corazon I. Morando Marilyn G. Yuchenkang
Victor O. Martinez Gemma B. Deladia
Jocelyn T. Pavon
Jose L. Osmeña, Jr. Therese G. Escolin
Danilo T. Sarita
Elizabeth C. Say Madelyn V. Fontanilla
Shirley G. K. T. Tan
Stephen Y. Tan
Marisol M. Teodoro
Maria Rosanna Catherina L. Testa
Geoffrey D. Uy
Lilian Yu

SENIOR ASSISTANT VICE PRESIDENTS

Emmanuel L. Abesamis Ma. Jeanette D. Cuyco Ronald R. Marcaida Jinky T. Dela Torre
Baldwin A. Aguilar Esperose S. De Claro Enrico J. Ong Ma. Edita Lynn Z. Trinidad
Evelyn T. Alameda Ricardo J. De Guzman III Josephine D. Paredes Christopher T. Ty
Ma. Hildelita P. Alano Rhodin Evan O. Escolar Mani Thess Q. Peña-Lee Hudson Q. Uy
Patrick Y. Ang Pablito P. Flores Frederick M. Pineda Roderick Iluminado U. Vallejo III
Marissa A. Auditor Francisco Javier C. Galang Arnulfo H. Roldan Esmeralda R. Vicente
Faye Theresa S. Babasa Grace Y. Ho Ana Ma. Raquel Y. Samala Anthony Ariel C. Vilar
Love Virgilynn T. Baking Josefina Anna T. Justiniano Julie Ann P. Santiago Rosario D. Yabut
Ma. Luisa O. Baylosis Vivian T. Kho Alejandro F. Santos Sandra Mae Y. Yao
Yasmin I. Biticon Maria Margaret U. Kua Cherie S. Sia Michelle Y. Yap-Bersales
Jonathan C. Camarillo Ma. Arlene Mae G. Lazaro Ma. Cecilia D. So Hanz Irvin S. Yoro
Victoria G. Capacio Eric Y. Lee Cynthia U. Surpia Mary Joy L. Yu
Camilo S. Cape Angelyn Claire C. C. Liao Jeanny C. Tan
Grace A. Cruz Glenn B. Lotho Roxana Angela S. Tan
Patricia J. Custodio Ordon P. Maningding Ma. Cecilia V. Tejada

ASSISTANT VICE PRESIDENTS

Agnes O. Adviento Maria Luisa C. Corpus Maria Merlinda O. Lo Charmaine V. Santos
Rommel M. Agacita Amelia Consolacion B. Cruz Katherine N. Manguiat Edgardo M. Santos
Nellie S. Alar Ma. Lourdes L. Dela Vega Sheila Jane F. Medrero Fernando S. Santos III
Ramiro A. Amanquiton Katherine Jean S. Diamante Jose L. Nario, Jr. Ma. Graciela C. Santos
Jay Angelo N. Anastacio Eliseo P. Doroteo Tadeos R. Natividad Maria Sheila V. Sarmenta-Dayao
Luis R. Apostol Mary Ann R. Ducanes Gil P. Navelgas Ernanie V. Silvino
Roberto P. Basilio Eleanor Q. Faigao Wendy G. Ngo Michaela L. Teng
Cherie Germaine T. Bautista Angelito T. Fernandez Erlan Antonio B. Olavere Jacqueline T. Tomacruz
Eric Von D. Baviera Susan U. Ferrer Remedios Emilia R. Olivar Edna A. Torralba
Robert O. Blanch Hyacinth M. Galang Sonia M. Ong Cristina C. Ty
Jesus S.M. Belaniso III Ma. Salome D. L. Garcia Lilian B. Orlina Norman P. Ureta
Maria Charmina B. Bonifacio Marissa G. Garcia Sheilah B. Paglinawan David Andrew P. Valdellon
Maria Consuelo D.P. Cabale-Ticzon Dennis S. Go III Ma. Victoria G. Pantaleon Lauro C. Valera
Agnes C. Calimbahin Virginia G. Go Christine G. Peñafiel Catherine D. Yabes
Alex M. Campilan Ruth D. Holmes Noreen S. Purificacion April Marie O. Yago
Sherry Ann F. Canillas Gladys Antonette Marcel P. Isidro Alvin A. Quintanilla Manuel O. Yap
Norman Roque V. Causing Alex A. Jacob Rhoel T. Reyes
Crisostomo L. Celaje Melecio C. Labalan, Jr. Niña May Q. Reynoso
Victoria L. Chua Ma. Teresa O. Lao Eleanor D. Rosales
Ma. Rosalie F. Cipriano Mary Ann L. Llanes Anita Y. Samala
 Awards and Distinctions 91

AWARDS AND DISTINCTIONS

Special Citation - Among the top 5 publicly-listed Best Bond Adviser (Domestic) - China Bank Capital
companies for 6 straight years Corporation
2017 Bell Awards for Corporate Governance Best Follow-On (Philippines)- Del Monte Pacific US$200
Philippine Stock Exchange Million Preferred Shares
Best Corporate Bond (Philippines) - Ayala Corporation
Asia’s Best CEO, Investor Relations - Ricardo R. Chua US$400 Million Fixed-For-Life Bonds
Best Investor Relations Company Philippines - China Bank Best Local Currency Bond (Philippines) - P4.3B Ayala Land
Best Investor Relations Professional Philippines - Inc. Short Dated Notes
Alexander C. Escucha Best Bond Deal for Retail Investors in Southeast Asia -
The 7th Asian Excellence Awards 2017 P181B Republic of the Philippines Bureau of the Treasury’s
Corporate Governance Asia Retail Treasury Bonds
2017 Triple A Asia Awards
Best Bank in Corporate Governance 2017 The Asset Magazine
Global Banking and Finance Review Awards
Global Banking and Finance Review (U.K) Power Deal of the Year (Philippines) - GNPower Dinginin
Limited Company US$670 million/P7.5 billion project
Best Core Banking Implementation (Mid-size banks) financing facilities
The Asian Banker Technology Innovation Awards 2017 2017 Triple A Asia Infrastructure Awards
The Asian Banker The Asset Magazine

Best Managed Fund of the Year Award - Dollar Long-Term Rank 2 - Top Banks in the Secondary Markets in Asian
Bond Category Currency Bonds (Corporate Bonds-Philippines)
2017 Charter Awards Rank 1 - Best Individual in Trading (Philippines) -
Chartered Financial Analyst (CFA) Society Philippines Cristina P. Arceo
2017 Benchmark Research Awards
Top Investment House in Corporate Bond Issues 2017 The Asset Magazine
13th PDS Awards Night
Philippine Dealing System (PDS) Group Silver Anvil - China Bank 2016 Annual Report
53rd Anvil Awards
Public Relations Society of the Philippines
92 China Bank Annual Financial and Sustainability Report 2017
 Financial Statements 93

FINANCIAL STATEMENTS CONTENT

Management’s Discussion on Result of Operations and

94
Financial Condition

95 Disclosure on Capital Structure and Capital Adequacy

105 Report of the Audit Committee

Certificate on the Compilation Services for the Preparation

106 of the Financial Statements and Notes to the Financial
Statements

Statement of Management’s Responsibility for Financial

107
Statements

108 Independent Auditors’ Report

111 Balance Sheets

112 Statements of Income

113 Statements of Comprehensive Income

114 Statements of Changes in Equity

116 Statements of Cash Flows

118 Notes to Financial Statements

 94 China Bank Annual Financial and Sustainability Report 2017

MANAGEMENT’S DISCUSSION ON RESULT OF

OPERATIONS AND FINANCIAL CONDITION
RESULT OF OPERATIONS

China Bank recorded a 16.44% improvement in net income to P7.52 billion for 2017, which translated to a 10.01% return on equity
and 1.12% return on assets.

Total operating income consisting of net interest income and fee-based income increased by 18.08% or P3.94 billion to
P25.73 billion with the growth in core businesses across all market segments. Total operating expenses (including provision for
impairment and credit losses) increased by 17.71% or P2.51 billion as a result of the on-going business expansion.

Net Interest Income improved to P19.63 billion, up by 17.56%, driven by the rise in interest revenue from loans and trading &
investment securities. However, net interest margin fell to 3.11% from 3.20% as impact of rising funding costs tempered topline
gains.

Total fee-based income improved by 19.76% to P6.10 billion due to higher fees & commissions, significant revenues from the sale of
investment properties, and booking of one-off gains. Service charges, fees, and commissions grew by 14.99% to P2.44 billion from
the upswing in investment banking fees, credit card commissions, and transactional fee revenues. Meanwhile, trading and securities
gain dropped to P479.96 million from P918.09 million because of rate volatilities that affected both the dealership business and
returns on tradable securities. Trust fees exceeded previous year’s gains by 13.97% and reached P376.31 million with the expansion
in assets under management. Gain on sale of investment properties saw a 51.27% improvement to P670.61 million from robust
sales of the Bank’s foreclosed assets. Miscellaneous income increased by 72.64% to P1.52 billion from the higher recoveries of
charged-off assets and recognition of one-off gains.

With the Bank’s on-going expansion, operating expenses (excluding provision for impairment and credit losses) rose 19.56% or
P2.61 billion to P15.96 billion. The material components of operating expenses include compensation & fringe benefits which
accounted for 35.77% of total operating expenses, taxes & licenses at 14.18%, occupancy costs at 13.24%, and insurance at
9.02%. Provision for impairment and credit losses figured at P754.17 million, 11.33% lower from prudent credit expansion coupled
with the reduction in defaults & soured loans.

The Bank’s sustained profitability contributed to its capital strength and enabled it to consistently pay dividends to stockholders. For
2017, China Bank paid cash dividends of P0.8 per share or a total of P1.99 billion, which represents a total payout of 30.79% of
prior years’ net income. The Bank also declared a 8% stock dividend or a total of P1.99 billion.

FINANCIAL CONDITION

The Bank’s total assets expanded by 18.67% to P751.45 billion from P633.20 billion mainly from the robust growth in liquid assets
and core business.

The Bank’s loan portfolio (net, inclusive of UDSCL) grew by 16.06% to P448.97 billion from P386.83 billion mainly from higher
demand across all customer segments (corporate, commercial and consumer). Consumer loans grew by 25% for 2017. The Bank’s
non-performing loans ratio improved to 1.41% from last year’s 1.86%, while loan loss coverage ratio was computed at 99.02%, up
from 91.0% in 2016.

Total investment securities which consist of Financial Assets at Fair Value through Profit or Loss, Available-for-Sale and Held-to-
Maturity Financial Assets totalled P127.97 billion, up by 29.29% from P98.98 billion, resulting in a higher share to total assets of
17.03% from 15.63% in 2016. The Bank’s liquidity ratio stood at 36.40%, better than last year’s 34.39%.

On the liabilities side, total deposits increased by 17.27% to P635.09 billion from P541.58 billion mainly from the ongoing branch
expansion and more customer acquisition efforts. Low-cost CASA (checking & savings­) were P66.59 billion or 24.09% higher at
P343.01 billion, improving the low-cost funding mix to 54.01% from 51.04% in 2016. The Bank also issued the second tranche of
its long-term negotiable certificate of deposits (LTNCD) amounting to P6.4 billion in June 2017, bringing the Bank’s total LTNCD to
P15.9 billion.

Total capital funds grew to P83.66 billion, 31.98% higher than last year’s P63.39 billion primarily from the P15 billion stock rights
offering and retained profits. The Bank’s Common Equity Tier 1 (CET 1) and total CAR were computed at 13.47% and 14.22%,
respectively.
 Financial Statements 95

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 2017
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 35,370.61 34,552.59
Other Comprehensive Income (1,370.94) (1,373.38)
Minority Interest 104.55 -
Less: Unsecured DOSRI (189.98) (173.50)
Less: Deferred Tax Assets (2,097.87) (1,932.56)
Less: Goodwill (563.47) (222.84)
Less: Other Intangible Assets (3,072.14) (442.12)
Less: Defined Benefit Pension Fund Assets/Liabilities (991.39) (991.39)
Less: Investment in Subsidiary (406.30) (9,981.50)
Less: Significant Minority Investment (87.18) (87.18)
Less: Other Equity Investment (25.60) (23.41)
Total CET 1 Capital 70,651.92 63,306.34
Additional Tier 1 Capital - -
Total Tier 1 Capital 70,651.92 63,306.34
Tier 2 Capital
General Loan Loss Provision 3,970.35 3,409.98
Total Tier 2 Capital 3,970.35 3,409.98
Total Qualifying Capital 74,622.27 66,716.32

Qualifying Capital (Basel III) Consolidated Parent Company

In PhP Million 2016
Common Equity Tier 1 Capital
Paid-up common stock 20,020.28 20,020.28
Additional paid-in capital 6,987.56 6,987.56
Retained Earnings 32,341.53 31,617.74
Other Comprehensive Income (1,279.51) (1,216.81)
Minority Interest 100.32 -
Less: Unsecured DOSRI (440.48) (419.44)
Less: Deferred Tax Assets (2,165.10) (2,165.10)
Less: Goodwill (563.47) (222.84)
Less: Other Intangible Assets (3,065.71) (442.12)
Less: Defined Benefit Pension Fund Assets/Liabilities (682.43) (682.43)
Less: Investment in Subsidiary (370.55) (9,189.25)
Less: Significant Minority Investment (26.92) (26.92)
Less: Other Equity Investment (23.10) (20.91)
Forward
 96 China Bank Annual Financial and Sustainability Report 2017

DISCLOSURE ON CAPITAL STRUCTURE AND CAPITAL ADEQUACY

Qualifying Capital (Basel III) Consolidated Parent Company

In PhP Million 2016
Total CET 1 Capital 50,832.42 44,239.76
Additional Tier 1 Capital - -

Total Tier 1 Capital 50,832.42 44,239.76

Tier 2 Capital
General Loan Loss Provision 4,076.47 3,513.93
Total Tier 2 Capital 4,076.47 3,513.93
Total Qualifying Capital 54,908.89 47,753.69

Risk-based capital ratios:

Basel III Consolidated Parent Company
2017
In PhP Million
CET 1 capital 78,085.85 77,160.83
Less regulatory adjustments 7,433.93 13,854.49
Total CET 1 capital 70,651.92 63,306.34
Additional Tier 1 capital - -
Total Tier 1 capital 70,651.92 63,306.34
Tier 2 capital 3,970.35 3,409.98
Total qualifying capital 74,622.27 66,716.32
Risk weighted assets 524,667.93 451,523.36
CET 1 capital ratio 13.47% 14.02%
Tier 1 capital ratio 13.47% 14.02%
Total capital ratio 14.22% 14.78%

Basel III Consolidated Parent Company

2016
In PhP Million
CET 1 capital 58,170.18 57,408.77
Less regulatory adjustments 7,337.76 13,169.02
Total CET 1 capital 50,832.42 44,239.76
Additional Tier 1 capital - -
Total Tier 1 capital 50,832.42 44,239.76
Tier 2 capital 4,076.47 3,513.93
Total qualifying capital 54,908.89 47,753.69
Risk weighted assets 449,683.04 382,679.13
CET 1 capital ratio 11.30% 11.56%
Tier 1 capital ratio 11.30% 11.56%
Total capital ratio 12.21% 12.48%

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.
 Financial Statements 97

Full reconciliation of all regulatory capital elements back to the balance sheet in the audited financial statements is presented below:

Parent Company
2017 2016
Audited Audited
Qualifying Reconciling Financial Qualifying Reconciling Financial
Capital Items Statements Capital Items Statements
Common stock 26,859 11 26,848 20,020 - 20,020
Additional paid-in capital 17,123 26 17,096 6,988 - 6,988
Retained Earnings 34,553 (6,735) 41,287 31,618 (6,133) 37,751
Net unrealized gains or losses on AFS securities (1,536) 278 (1,813) (1,313) 286 (1,599)
Cumulative foreign currency translation and
others 162 (70) 233 96 (135) 231
Deductions (13,854) (13,854) - (13,169) (13,169) -
Tier 1 (CET1) capital/Total equity 63,307 (20,344) 83,651 44,240 (19,151) 63,391
Tier 2 capital 3,410 3,410 - 3,514 3,514 -
Total qualifying capital/Total equity 66,717 (16,934) 83,651 47,754 (15,638) 63,391

Group
2017 2016
Qualifying Reconciling Audited Qualifying Reconciling Audited
Capital Items Financial Capital Items Financial
Statements Statements
Common stock 26,859 11 26,848 20,020 - 20,020
Additional paid-in capital 17,123 27 17,096 6,988 - 6,988
Retained Earnings 35,371 (5,916) 41,287 32,342 (5,409) 37,751
Net unrealized gains or losses on AFS securities (1,536) 277 (1,813) (1,313) 286 (1,599)
Cumulative foreign currency translation and others 165 (68) 233 33 (198) 231
Non-controlling interest 105 100 5 100 106 (5)
Deductions (7,434) (7,434) - (7,338) (7,338) -
Tier 1 (CET1) capital/Total equity 70,653 (13,003) 83,656 50,832 (12,554) 63,386
Tier 2 capital 3,970 3,970 - 4,076 4,076 -
Total qualifying capital/Total equity 74,623 (9,033) 83,656 54,909 (8,477) 63,386

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 2017 2016 2017 2016
Credit Risk 48,095.62 41,438.12 41,545.70 35,265.13
Market Risk 766.46 457.53 754.04 433.90
Operational Risk 3,604.71 3,072.65 2,852.60 2,568.88
Total Capital Requirements 52,466.79 44,968.30 45,152.34 38,267.91
 98 China Bank Annual Financial and Sustainability Report 2017

DISCLOSURE ON CAPITAL STRUCTURE AND CAPITAL ADEQUACY

Credit Risk

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

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 Loans 1,126.59 1,126.59 1,021.49 1,021.49
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

December 2016

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 11,817.72 11,817.72 10,502.02 10,502.02
Checks and Other Cash Items 172.22 172.22 152.44 152.44
Due from BSP 91,791.03 91,791.03 85,133.66 85,133.66
Due from Other Banks 10,013.41 10,013.41 8,370.13 8,370.13
Financial Assets at FVPL 2,472.60 2,462.89 2,472.60 2,462.89
Available-for-Sale Financial Assets 33,937.65 32,966.67 31,374.20 30,403.22
Held-to-Maturity Financial Assets 58,131.81 58,131.81 54,755.05 54,755.05
Unquoted Debt Securities Classified as Loans 4,106.19 4,106.19 4,000.98 4,000.98
Loans and Receivables 387,185.32 362,850.92 330,301.95 311,073.96
Loans and Receivables arising from Repurchase
3,452.13 3,452.13 2,959.06 2,959.06
Agreements
Sales Contract Receivables 909.20 909.20 228.43 228.43
Real and Other Properties Acquired 4,298.03 4,298.03 605.71 605.71
Other Assets 10,518.86 10,518.86 6,890.90 6,890.90
Total On-Balance Sheet Assets 618,806.17 593,491.08 537,747.14 517,538.46
 Financial Statements 99

December 2015

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 11,315.70 11,315.70 9,997.94 9,997.94
Checks and Other Cash Items 128.93 128.93 125.72 125.72
Due from BSP 86,107.22 86,107.22 76,791.60 76,791.60
Due from Other Banks 20,727.94 20,727.94 18,721.97 18,721.97
Financial Assets at FVPL 2,309.16 2,299.97 2,309.16 2,299.97
Available-for-Sale Financial Assets 49,212.27 48,293.27 47,349.01 46,430.01
Held-to-Maturity Financial Assets 16,449.17 16,449.17 14,228.65 14,228.65
Unquoted Debt Securities Classified as Loans 1,291.55 1,291.55 1,021.55 1,021.55
Loans and Receivables 312,709.73 296,968.77 262,396.76 251,552.50
Loans and Receivables arising from Repurchase
0.00 0.00 0.00 0.00
Agreements
Sales Contract Receivables 977.75 977.75 251.54 251.54
Real and Other Properties Acquired 3,415.27 3,415.27 721.69 721.69
Other Assets 11,525.08 11,525.08 8,665.47 8,665.47
Total On-Balance Sheet Assets 516,169.78 499,500.62 442,581.07 430,808.62

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

2017 2016 2015

Consolidated Parent Consolidated Parent Consolidated Parent
Off-balance Sheet 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 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Transaction-related
17,856.22 8,928.11 17,643.24 8,821.62 17,129.58 8,564.79 16,795.09 8,397.55 18,642.19 9,321.10 18,312.08 9,156.04
contingencies
Trade-related
contingencies arising
8,244.10 1,648.82 8,079.90 1,615.98 5,211.89 1,042.38 5,174.63 1,034.93 8,780.79 1,756.16 4,168.27 833.65
from movement of
goods
Other commitments
(which can be
unconditionally
148,317.90 0.00 145,897.78 0.00 149,582.52 0.00 144,594.20 0.00 134,164.24 0.00 130,113.85 0.00
cancelled at any time
by the bank without
prior notice)
Total Notional
Principal and Credit 174,418.22 10,576.93 171,620.92 10,437.60 171,923.98 9,607.17 166,563.93 9,432.47 161,587.23 11,077.26 152,594.21 9,989.70
Equivalent Amount

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

December 2017

Consolidated Parent
Standardized Approach
Notional Principal Credit Equivalent Notional Principal Credit 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 0.00 0.00 0.00 0.00
Credit Derivatives 0.00 0.00 0.00 0.00
Total Notional Principal and
Credit Equivalent Amount 43,059.88 666.87 43,059.88 666.87
100 China Bank Annual Financial and Sustainability Report 2017

DISCLOSURE ON CAPITAL STRUCTURE AND CAPITAL ADEQUACY

December 2016

Consolidated Parent
Standardized Approach
Notional Principal Credit Equivalent Notional Principal Credit Equivalent

Interest Rate Contracts 10,823.40 72.93 10,823.40 72.93

Exchange Rate Contracts 16,830.93 343.13 16,830.93 343.13
Equity Contracts 0.00 0.00 0.00 0.00
Credit Derivatives 0.00 0.00 0.00 0.00
Total Notional Principal and
27,654.33 416.07 27,654.33 416.07
Credit Equivalent Amount

December 2015

Consolidated Parent
Standardized Approach
Notional Principal Credit Equivalent Notional Principal Credit Equivalent

Interest Rate Contracts 6,950.00 31.62 6,950.00 31.62

Exchange Rate Contracts 29,022.60 551.18 29,022.60 551.18
Equity Contracts 0.00 0.00 0.00 0.00
Credit Derivatives 0.00 0.00 0.00 0.00
Total Notional Principal and
35,972.60 582.80 35,972.60 582.80
Credit Equivalent Amount

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

December 2017

Consolidated Parent
Standardized Approach Fair Value/ Net Exposures Fair Value/ Net Exposures
Carrying Amount after CRM Carrying Amount after CRM
Derivative Transactions 0.00 0.00 0.00 0.00
Repo-Style Transactions 17,415.76 3,546.90 17,415.76 3,546.90
Total Fair Value/Carrying Amount and
17,415.76 3,546.90 17,415.76 3,546.90
Net Exposures after CRM

December 2016

Consolidated Parent
Standardized Approach Fair Value/ Net Exposures Fair Value/ Net Exposures
Carrying Amount after CRM Carrying Amount after CRM
Derivative Transactions 0.00 0.00 0.00 0.00
Repo-Style Transactions 9,520.22 1,447.43 9,520.22 1,447.43
Total Fair Value/Carrying Amount and
9,520.22 1,447.43 9,520.22 1,447.43
Net Exposures after CRM

December 2015

Consolidated Parent
Standardized Approach Fair Value/ Net Exposures Fair Value/ Net Exposures
Carrying Amount after CRM Carrying Amount after CRM
Derivative Transactions 0.00 0.00 0.00 0.00
Repo-Style Transactions 13,020.27 1,967.19 13,020.27 1,967.19
Total Fair Value/Carrying Amount and
13,020.27 1,967.19 13,020.27 1,967.19
Net Exposures after CRM
 Financial Statements 101

The following credit risk mitigants are used in the December 2017 CAR Report:
• ROP warrants
• ROP guarantees
• HGC guarantee
• Holdout vs. Peso deposit / Deposit substitute
• Holdout vs. FCDU deposit of resident
• Holdout vs. FCDU deposit of non-resident
• 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):

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 0.00 4,065.92 303,123.38 268,167.72 0.00 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

2016
Weight
Band Consolidated Parent Company
On-balance Off-balance On-balance Off-balance
Counterparty Total Counterparty Total
sheet sheet sheet sheet
Below 100% 252,534.01 21.86 1,805.97 254,361.84 224,540.77 21.86 1,805.97 226,368.61
100% and
340,957.07 9,585.31 57.53 350,599.91 292,997.69 9,410.61 57.53 302,465.83
Above
Total 593,491.08 9,607.17 1,863.50 604,961.75 517,538.46 9,432.47 1,863.50 528,834.43

2015
Weight
Band Consolidated Parent Company
On-balance Off-balance On-balance Off-balance
Counterparty Total Counterparty Total
sheet sheet sheet sheet
Below 100% 220,502.35 966.22 2,369.43 223,838.01 193,175.37 43.72 2,369.43 195,588.52
100% and
278,998.27 10,111.03 180.55 289,289.86 237,633.25 9,945.98 180.55 247,759.78
Above
Total 499,500.62 11,077.26 2,549.99 513,127.87 430,808.62 9,989.70 2,549.99 443,348.31

Total credit risk-weighted assets, broken down by type of exposures (in PhP million):

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 0.00 1,990.76 63,420.34 50,785.80 0.00 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 0.00 0.00 67.74 67.74 0.00 0.00 67.74
Excess
GLLP 0.00 0.00
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
102 China Bank Annual Financial and Sustainability Report 2017

DISCLOSURE ON CAPITAL STRUCTURE AND CAPITAL ADEQUACY

2016
Weight Consolidated Parent Company
Band On-balance Off-balance On-balance Off-balance
Counterparty Total Counterparty Total
sheet sheet sheet sheet
Below 100% 58,436.20 4.37 542.12 58,982.70 48,001.61 4.37 542.12 48,548.10
100% and
345,656.04 9,585.31 57.53 355,298.88 294,570.61 9,410.61 57.53 304,038.75
Above
Covered by
99.63 0.00 0.00 99.63 64.40 0.00 0.00 64.40
CRM
Excess
0.00 0.00
GLLP
Total 404,191.88 9,589.68 599.65 414,381.20 342,636.62 9,414.98 599.65 352,651.25

2015
Weight Consolidated Parent Company
Band On-balance Off-balance On-balance Off-balance
Counterparty Total Counterparty Total
sheet sheet sheet sheet
Below 100% 54,350.83 8.74 900.65 55,260.22 45,237.43 8.74 900.65 46,146.81
100% and
283,011.77 10,111.03 180.55 293,303.36 239,142.00 9,945.98 180.55 249,268.53
Above
Covered by
76.21 0.00 0.00 76.21 71.18 0.00 0.00 71.18
CRM
Excess
(490.54) (603.52)
GLLP
Total 337,438.81 10,119.78 1,081.20 348,149.25 284,450.60 9,954.72 1,081.20 294,883.00

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
 Financial Statements 103

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 2017 is P7.54 billion and P7.67 billion for parent company and consolidated basis, respectively. This is composed
of Interest Rate exposures amounting to P6.94 billion and Foreign Exposures amounting to P0.60 billion for the parent bank, while
it is composed of Interest Rate exposures amounting to P6.97 billion, Equity exposures amounting to P0.09 billion and Foreign
Exposures amounting to P0.60 billion on a consolidated basis.

Consolidated Parent Company Consolidated Parent Company

Interest Rate Exposures (in PhP Mn) 2017 2016
Specific Risk 176.92 176.37 63.53 60.92
General Market Risk
PHP 124.23 123.60 41.59 34.99
USD 256.58 255.27 80.66 72.35
Total Capital Charge 557.73 555.24 185.78 168.26
Adjusted Capital Charge 697.17 694.05 232.23 210.33
Subtotal Market Risk-Weighted Assets 6,971.70 6,940.52 2,322.27 2,103.25

Consolidated Parent Company Consolidated Parent Company

Equity Exposures 2017 2016
Total Capital Charge 7.47 - - -
Adjusted Capital Charge 9.33 - - -
Subtotal Market Risk-Weighted Assets 93.33 - - -
Total Market Risk-Weighted Assets 93.33 - - -

Consolidated Parent Company Consolidated Parent Company

Foreign Exchange Exposures 2017 2016
Total Capital Charge 47.97 47.99 180.24 178.86
Ad justed Capital Charge 59.96 59.98 225.30 223.58
Subtotal Market Risk-Weighted Assets 599.61 599.83 2,253.05 2,235.80

Total Market Risk-Weighted Assets 7,664.64 7,540.35 4,575.31 4,339.05

104 China Bank Annual Financial and Sustainability Report 2017

Operational, Legal, and Other Risks

Operational risks arise from inadequate or failed internal processes, people and systems or from external events. The Bank
employs several tools to identify, assess, monitor and control the operational risk inherent to the Bank.

Tools such as the Risks and Controls Self-Assessment (RCSA), IT Risk Assessment (ITRA), the analysis of historical loss reports,
the monitoring of Key Risk Indicators (KRI) and the Business Impact Analysis further allow risk management to identify high risk
areas, loss drivers, and trends which can be acted upon by management to prevent material failures in our processes, people,
systems, and resiliency measures against external events. These results are periodically reported to management and cover all
aspects of the business from core operating capabilities of the units, all products and services, outstanding legal cases, and even
its sales and marketing practices. In addition, the Bank has a product review and approval process. It seeks to outline a standard
approach involved in implementing the product management mandate for all product categories in the Bank and will ultimately
reflect the Bank’s operating and risk management philosophy in the context of its over-all business goals and strategies. Further,
the Bank through its Legal & Collection Division identified and assessed potential losses attributed to Legal Risk and amount is not
material to significantly affect the Bank’s capital position.

The operational risk exposure of the Bank is profiled using a number of methodologies which also include a scenario analysis exercise
as part of the Internal Capital Adequacy Assessment Process (ICAAP) to validate if the computed capital requirement using the Basic
Indicator Approach (BIA) is enough to cover estimated losses arising from adverse operating conditions and major incidents. The
Bank allocated the amount of P2.85 billion in capital as of December 2017 for operational risk which is more than adequate to cover
the resulting exposure based on the scenario analysis exercise. In fact, the BIA provides a capital buffer of as much as P2.39 billion.

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 2017 is P28.53 billion while on a consolidated basis, the Bank’s operational risk-weighted
assets is 36.05 billion. On a parent basis, the Bank’s operational risk-weighted asset as of December 2016 is P25.69 billion while on
a consolidated basis, the Bank’s operational risk-weighted assets is P30.73 billion.

Internal measurement of interest rate risk in the banking book

The Bank’s interest rate risk (IRR) originates from its holdings of interest rate sensitive assets and interest rate sensitive liabilities.
Internally, the Earnings-at-Risk (EaR) method is used to determine the effects of interest rate movements on the Bank’s interest
earnings. The Bank’s loans is 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 not interest rate sensitive. Provided in the table below
are the approximate addition and reduction in annualized interest income of a 100bps change across the PhP and USD yield curves.

Consolidated Parent
Earnings-at-Risk in PhP Million
2017 2016 2017 2016
Upward 752 237 867) 387
PHP IRR Exposures
Downward (752) (237) (867) (387)
Upward (342) (183) (328) (169)
USD IRR Exposures
Downward 301 201 287 187
 Financial Statements 105

REPORT OF THE AUDIT COMMITTEE

The Audit Committee of the Bank is chaired by independent director Oversight of Internal Audit
Alberto S. Yao, with non-executive director Joaquin T. Dee and
independent director Roberto F. Kuan as members. All of them have To assess the effectiveness of the internal audit function, the Audit
accounting, auditing, or related financial management expertise or Committee approved the plans and budget of internal audit’s Quality
experience commensurate with the size, complexity of operations and Assurance and Control Department, Branch Audit Department, Head
risk profile of the Bank. Office and Subsidiaries Audit Department, and IT Audit Department;
monitored their accomplishments versus plans on semestral and
With primary oversight of all matters pertaining to audit, the Committee annual basis; evaluated the additions, deferments, or any other
looks into the Bank’s internal audit function and performance, the changes in audit engagements; and reviewed the internal audit reports
integrity of the Bank’s financial statements, and the Bank’s accounting and recommendations to address the weaknesses and deficiencies
processes in general. It likewise provides oversight on the senior noted. Ensuring that the internal audit function maintains an open
management’s activities, as well as the internal and external auditors, communication with the Committee, the members of the Committee
and monitors and evaluates the adequacy and effectiveness of the deliberated on several issues which affect or may affect internal audit’s
Bank’s internal control system. The Committee also plays an important process and independence, and approved guidelines in handling
role in empowering and elevating the status of the internal audit activity management acceptance of risk.
throughout the organization as provider of quality and significant
assurance and consulting services that adds value to the Bank’s The Committee confirmed the professional opinion of the Chief Audit
governance, risk management, and internal control processes. Executive of adherence to the Institute of Internal Auditors’ Standard
2130 and Practice Advisory 2130-1 on Control based on the results
The Audit Committee met 14 times during the year ended of audit conducted for the covered period, and that the Bank’s control
December 31, 2017, including six joint meetings with the Compliance processes, operating across the organization, are in place, adequate
and Corporate Governance Committees, to tackle various matters and working effectively to mitigate risks that could adversely affect the
including the following: achievement of Bank objectives. The Committee also confirmed that
in adherence to the Institute of Internal Auditors’ Standard 1100 on
Oversight of Financial Reporting and Policies Independence and Objectivity, for Audit year 2017, the internal audit
activity is independent from any conditions that would threaten its ability
The Committee reviewed and discussed with the external auditor, SyCip to carry out internal audit responsibilities in an unbiased manner, which
Gorres Velayo & Co./Ernst & Young, the audited financial statements, are evidenced by the dual reporting lines to the Board and President,
focusing on key audit matters, any change/s in accounting policies and the functional roles that are within the scope of internal audit activity,
and practices, standards and interpretations and related impact; and that internal audit members have an impartial, unbiased attitude
major judgmental areas including reasonableness of estimates and and avoid any conflict of interest in the performance of their duties and
assumptions used in the preparation of financial statements; significant responsibilities, in observance of the Standards and Code of Ethics.
adjustments resulting from the audit; compliance with accounting and Further, the Committee evaluated the performance of the Chief Audit
auditing standards; compliance with Bureau of Internal Revenue (BIR), Executive, including her accomplishment versus plans and budget.
Securities and Exchange Commission (SEC) and Bangko Sentral ng Among the noted accomplishments for the period were the updating of
Pilipinas (BSP) regulations and/or requirements; completeness and the Audit Manual, revision of the Audit Committee Charter, and setting
timeliness of communication with external auditor; and other material up of the Data Analytics Unit for the automation of audit procedures to
issues that affect the audit and financial reporting. implement continuous auditing.

Oversight of Internal Control Based on the foregoing, the Audit Committee views that the internal
control and financial reporting systems and policies of the Bank are in
To establish and maintain an adequate, effective and efficient place, adequate, effective and efficient.
internal control framework, the Committee ensured that systems
and processes are designed to provide assurance in areas including Makati City, March 21, 2018.
reporting, monitoring compliance with laws, regulations and internal
policies, efficiency and effectiveness of operations, and safeguarding
of assets. It reviewed and discussed the adequacy of internal controls,
and monitored the internal control issues noted during internal regular,
special and limited audits of various branches, units and services of the
Bank, together with the management’s responses and determined that
appropriate actions have been taken to address significant deficiencies
and weaknesses. Included in the Committee’s monitoring and evaluation ALBERTO S. YAO
is the effectiveness of the information technology security and control. Chairman

Oversight of External Audit

The scope and plan of the annual audit were reviewed and discussed
by the Committee, including coordination of audit effort with internal JOAQUIN T. DEE
audit and rotation process of auditor/firm. The annual audited financial Member
statements, management letters, regulatory and accounting issues
and developments and their effect on the financial statements were
also taken up. In addition, the members of the Committee reviewed
the qualifications, performance, competence and independence of
the external auditor, recommended to the Board the re-engagement/
re-appointment of SyCip Gorres Velayo & Co./Ernst & Young as the ROBERTO F. KUAN
Bank’s external auditor, and approved their fees. Such re-engagement/ Member
re-appointment will be subject to stockholders’ ratification.
106 China Bank Annual Financial and Sustainability Report 2017

CERTIFICATE ON THE COMPILATION SERVICES FOR THE

PREPARATION OF THE FINANCIAL STATEMENTS AND
NOTES TO THE FINANCIAL STATEMENTS
I hereby certify that I am the Certified Public Accountant who performed the compilation services related to the preparation
and presentation of financial information of an entity in accordance with an applicable financial reporting framework and reports
required by accounting and auditing standards for China Banking Corporation for the period ended December 31, 2017.

In discharging this responsibility, I hereby declare that I am an officer under Controllership Group of China Banking Corporation.

Furthermore, in the compilation services for preparation of the Financial Statements and Notes to the Financial Statements, I was
not assisted by or did not avail of the services of Sycip Gorres Velayo & Co., who is the external auditor who rendered the audit
opinion for the said Financial Statement and Notes to the Financial Statements.

I hereby declare, under penalties of perjury and violation of the Revised Accountancy Law, that my statements are true and correct.

Edgar S. Neri Jr.

CPA Certificate No. 122893
Valid until September 14, 2019
CPA Accreditation filed on December 9, 2016 and is pending at the PRC

March 1, 2018

Doc. No. 257

Page No. 54
Book No. 10
Series of 2018
 Financial Statements 107

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, 2017 and 2016,
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 Financial Officer

} S. S.
Republic of the Philippines
City of Makati

Signed this 1st day of March 2018, affiants exhibiting to me their Social Security System Nos. as follows:

Name SSS Nos.

Hans T. Sy 03-4301174-3
William C. Whang 03-5882607-5
Patrick D. Cheng 03-8328014-9

Doc. No.: 253

Page No.: 52
Book No.: 52
Series of: 2018
108 China Bank Annual Financial and Sustainability Report 2017

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 Banking Corporation and its subsidiaries (the Group) and the parent company
financial statements of China Banking Corporation, which comprise the consolidated and parent company balance sheets as at December 31, 2017
and 2016, and the consolidated and parent company statements of income, consolidated and parent company statements of comprehensive
income, consolidated and parent company statements of changes in equity and consolidated and parent company statements of cash flows for
each of the three years in the period ended December 31, 2017, and notes to the consolidated and parent company financial statements, including
a summary of significant accounting policies.

In our opinion, the accompanying consolidated and parent company financial statements present fairly, in all material respects, the financial position
of the Group and the Parent Company as at December 31, 2017 and 2016, and their financial performance and their cash flows for each of the three
years in the period ended December 31, 2017 in accordance with Philippine Financial Reporting Standards (PFRSs).

Basis for Opinion

We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Consolidated and Parent Company Financial Statements section of our report. We
are independent of the Group and the Parent Company in accordance with the Code of Ethics for Professional Accountants in the Philippines (Code
of Ethics) together with the ethical requirements that are relevant to our audit of the consolidated and parent company financial statements in the
Philippines, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and parent company
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and parent company
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter
below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Consolidated and Parent Company Financial
Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to
respond to our assessment of the risks of material misstatement of the consolidated and parent company financial statements. The results of our
audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying
consolidated and parent company financial statements.

Applicable to the audit of the Consolidated and Parent Company Financial Statements

Adequacy of allowance for credit losses on loans and receivables

Loans and receivables comprise 59.75% and 57.59% of the total assets of the Group and the Parent Company as of December 31, 2017, respectively.
Reflecting these assets and the related allowance for credit losses at their appropriate amounts is a key area of judgment for management. The
Group determines the allowance for credit losses on an individual basis for individually significant loans and receivables. In contrast, allowance for
credit losses on loans and receivables that are not individually significant or are not specifically impaired are collectively determined. The identification
of impairment and the determination of the recoverable amount involve various assumptions and factors such as the financial condition of the
borrower, estimated future cash flows, observable market prices and estimated net selling prices of the collateral. The use of assumptions could
produce significantly different estimates of provision for credit losses.

The disclosures in relation to credit losses are included in Notes 3, 6 and 16 to the financial statements.

Audit Response

For provision for credit losses calculated on an individual basis, we selected a sample of impaired loans and obtained an understanding of the
borrower’s business and financial capacity. We also tested the assumptions underlying the impairment identification and quantification of the
provision for credit losses. This was done by assessing whether the forecasted cash flows are based on the borrower’s current financial condition,
checking the payment history of the borrower including payments made subsequent to yearend, agreeing the value of the collateral to the appraisal
reports, checking whether the discount rate represents the original effective interest rate (EIR) or the current EIR of the loan, and re-performing the
impairment calculation.
 Financial Statements 109

For provision for credit losses calculated on a collective basis, we tested the underlying models and the inputs to those models, such as historical
loss rates. This was done by agreeing the details of the loan information used in the calculation of loss rates to the Group’s records and subsidiary
ledgers, validating the delinquency age buckets of the loans and loan groupings and re-performing the calculation of the provision for credit losses.

Impairment testing of goodwill

Under PFRS, the Group and the Parent Company are required to annually test the amount of goodwill for impairment. As of December 31, 2017,
the goodwill recognized in the consolidated and parent company financial statements amounting to P222.84 million is attributed to the Parent
Company’s Retail Banking Business (RBB) segment, while goodwill of P616.91 million in the consolidated financial statements is attributed to the
subsidiary bank, China Bank Savings, Inc. (CBSI). The impairment assessment process requires significant judgment and is based on assumptions,
specifically loan and deposit growth rates, discount rate and the terminal value growth rate.

The Group’s disclosures about goodwill are included in Notes 3, 11 and 14 to the financial statements.

Audit Response

We involved our internal specialist in evaluating the methodologies and the assumptions used. These assumptions include loan and deposit growth
rates, discount rate and the terminal value growth rate. We compared the key assumptions used, such as loan and deposit growth rates against
the historical performance of the RBB and CBSI, industry/market outlook and other relevant external data. We tested the parameters used in the
determination of the discount rate against market data. We also reviewed the Group’s disclosures about those assumptions to which the outcome
of the impairment test is most sensitive; specifically those that have the most significant effect on the determination of the recoverable amount of
goodwill.

Applicable to the audit of the Consolidated Financial Statements

Recoverability of deferred tax assets

The Group has recognized and unrecognized deferred taxes. The recoverability of deferred tax assets recognized depends on the Group’s ability to
continuously generate sufficient future taxable income. The analysis of the recoverability of deferred tax assets was significant to our audit because
the assessment process is complex and judgmental, and is based on assumptions that are affected by expected future market or economic
conditions and the expected performance of the Group.

The disclosures in relation to deferred income taxes are included in Notes 3 and 27 to the financial statements.

Audit Response

We reviewed the management’s assessment on the availability of future taxable income in reference to financial forecast and tax strategies. We
evaluated management’s forecast by comparing loan portfolio and deposit growth rates with that of the industry and the historical performance of
the Group. We also reviewed the timing of the reversal of future taxable and deductible temporary differences.

Other Information

Management is responsible for the other information. The other information comprises the information included in the SEC Form 20-IS (Definitive
Information Statement), SEC Form 17A and Annual Report for the year ended December 31, 2017, but does not include the consolidated and parent
company financial statements and our auditor’s report thereon. The SEC Form 20-IS (Definitive Information Statement), SEC Form 17A and Annual
Report for the year ended December 31, 2017 are expected to be made available to us after the date of this auditor’s report.

Our opinion on the consolidated and parent company financial statements does not cover the other information and we will not express any form of
assurance conclusion thereon.

In connection with our audits of the consolidated and parent company financial statements, our responsibility is to read the other information
identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated
and parent company financial statements or our knowledge obtained in the audits, or otherwise appears to be materially misstated.

Responsibilities of Management and Those Charged with Governance for the Consolidated and Parent Company Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated and parent company financial statements in accordance
with PFRSs, and for such internal control as management determines is necessary to enable the preparation of consolidated and parent company
financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and parent company financial statements, management is responsible for assessing the Group’s and Parent Company’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 Group and the Parent Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s and Parent Company’s financial reporting process.
 110 China Bank Annual Financial and Sustainability Report 2017

INDEPENDENT AUDITORS’ REPORT

Auditor’s Responsibilities for the Audit of the Consolidated and Parent Company Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated and parent company financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with PSAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated and parent company financial statements.

As part of an audit in accordance with PSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated and parent company financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Group’s and Parent Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and Parent Company’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the consolidated and parent company financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Group and the Parent Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated and parent company financial statements, including the disclosures,
and whether the consolidated and parent company financial statements represent the underlying 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 statements. We are responsible for the direction, supervision and performance of the audit. We remain
solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement 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 Revenue Regulations 152010

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information
required under Revenue Regulations 152010 in Note 37 to the financial statements is presented for purposes of filing with the Bureau of Internal
Revenue and is not a required part of the basic financial statements. Such information is the responsibility of the management of China Banking
Corporation. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements. In our opinion,
the information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

The engagement partner on the audit resulting in this independent auditor’s report is
Ray Francis C. Balagtas.

SYCIP GORRES VELAYO & CO.

Ray Francis C. Balagtas

Partner
CPA Certificate No. 108795
SEC Accreditation No. 1510-A (Group A),
October 1, 2015, valid until September 30, 2018
Tax Identification No. 216-950-288
BIR Accreditation No. 08-001998-107-2015,
March 4, 2015, valid until March 3, 2018
PTR No. 6621226, January 9, 2018, Makati City

February 28, 2018

 Financial Statements 111

BALANCE SHEETS
(Amounts in Thousands)
Consolidated Parent Company
December 31
2017 2016 2017 2016
ASSETS
Cash and Other Cash Items P12,685,984 P12,010,543 P11,160,173 P10,580,748
Due from Bangko Sentral ng Pilipinas (Notes 7 and 17) 98,490,014 91,964,495 91,717,037 85,307,128
Due from Other Banks (Notes 7 and 18) 15,641,476 11,332,236 14,066,620 9,689,165
Securities Purchased under Resale Agreements (Note 8) 18,751,845 3,451,543 17,347,522 2,958,465
Financial Assets at Fair Value through Profit or Loss (Note 9) 16,238,888 7,703,899 16,056,823 7,232,882
Available-for-Sale Financial Assets (Note 9) 46,445,391 33,873,723 42,937,083 31,153,750
Held-to-Maturity Financial Assets (Note 9) 65,286,267 57,404,800 61,533,493 54,069,021
Loans and Receivables (Notes 10 and 29) 448,970,942 386,827,300 386,554,498 329,069,859
Accrued Interest Receivable 3,718,505 3,014,529 3,189,083 2,666,353
Investment in Subsidiaries (Note 11) – – 13,560,733 12,169,037
Investment in Associates (Note 11) 329,422 276,559 329,422 276,559
Bank Premises, Furniture, Fixtures and Equipment (Note 12) 6,875,864 6,496,268 5,464,582 5,143,981
Investment Properties (Note 13) 5,072,156 5,349,739 1,550,503 1,760,876
Deferred Tax Assets (Note 27) 1,778,081 1,666,267 1,297,271 1,508,150
Intangible Assets (Notes 11 and 14) 4,104,032 4,089,715 800,861 805,582
Goodwill (Notes 11 and 14) 839,748 839,748 222,841 222,841
Other Assets (Note 15) 6,218,895 6,896,647 3,481,225 4,504,100
P751,447,510 P633,198,011 P671,269,770 P559,118,497

LIABILITIES AND EQUITY

Liabilities
Deposit Liabilities (Notes 17 and 29)
Demand P154,286,415 P135,263,113 P138,929,906 P122,265,663
Savings 188,723,947 141,155,766 179,593,323 132,772,300
Time 292,083,031 265,164,139 240,712,750 215,924,029
635,093,393 541,583,018 559,235,979 470,961,992
Bills Payable (Note 18) 20,118,031 16,954,998 20,118,031 16,954,998
Manager’s Checks 2,441,042 2,029,778 1,709,248 1,445,585
Income Tax Payable 362,041 437,303 339,155 354,212
Accrued Interest and Other Expenses (Note 19) 2,627,619 1,868,190 2,283,948 1,561,351
Derivative Liabilities (Note 25) 267,533 243,198 267,533 243,198
Deferred Tax Liabilities (Note 27) 1,161,653 1,161,414 – –
Other Liabilities (Notes 20 and 23) 5,720,701 5,533,908 3,665,115 4,205,745
667,792,013 569,811,807 587,619,009 495,727,081
Equity
Equity Attributable to Equity Holders of the Parent Company
Capital stock (Note 23) 26,847,717 20,020,278 26,847,717 20,020,278
Capital paid in excess of par value (Note 23) 17,096,228 6,987,564 17,096,228 6,987,564
Surplus reserves (Notes 23 and 28) 926,689 861,630 926,689 861,630
Surplus (Notes 23 and 28) 40,360,563 36,889,099 40,360,563 36,889,099
Net unrealized losses on available-for-sale financial assets (Note 9) (1,813,280) (1,598,600) (1,813,280) (1,598,600)
Remeasurement gain on defined benefit asset (Note 24) 283,763 253,945 283,763 253,945
Cumulative translation adjustment (38,698) (22,500) (38,698) (22,500)
Remeasurement loss on life insurance reserves (12,221) – (12,221) –
83,650,761 63,391,416 83,650,761 63,391,416
Non-controlling Interest 4,736 (5,212) – –
83,655,497 63,386,204 83,650,761 63,391,416
P751,447,510 P633,198,011 P671,269,770 P559,118,497

See accompanying Notes to Financial Statements.

 112 China Bank Annual Financial and Sustainability Report 2017

STATEMENTS OF INCOME
(Amounts in Thousands)

Consolidated Parent Company

Years Ended December 31
2017 2016 2015 2017 2016 2015
INTEREST INCOME
Loans and receivables (Notes 10 and 29) P21,751,647 P17,889,252 P15,900,727 P17,537,017 P14,122,287 P12,324,959
Trading and investments (Note 9) 3,966,999 3,282,963 3,100,802 3,673,802 3,060,325 2,946,914
Due from Bangko Sentral ng Pilipinas and
other banks and securities purchased under resale
agreements (Notes 7 and 8) 820,699 719,414 315,805 634,906 555,788 182,662
26,539,345 21,891,629 19,317,334 21,845,725 17,738,400 15,454,535
INTEREST EXPENSE
Deposit liabilities (Notes 17 and 29) 6,521,935 4,831,555 4,008,288 5,210,803 3,629,127 2,881,166
Bills payable and other borrowings (Note 18) 391,007 365,879 223,862 391,007 354,961 184,280
6,912,942 5,197,434 4,232,150 5,601,810 3,984,088 3,065,446
NET INTEREST INCOME 19,626,403 16,694,195 15,085,184 16,243,915 13,754,312 12,389,089
Service charges, fees and commissions (Note 21) 2,441,724 2,123,469 1,834,318 1,394,998 1,319,448 1,456,140
Gain on sale of investment properties 670,612 443,315 375,754 614,587 338,088 353,249
Trading and securities gain - net (Notes 9 and 21) 479,960 918,089 466,834 399,760 852,870 459,996
Foreign exchange gain - net (Note 25) 386,015 318,135 330,056 389,692 299,113 306,541
Trust fee income (Note 28) 376,312 330,197 276,240 371,947 326,091 272,251
Gain on asset foreclosure and dacion transactions
(Note 13) 157,415 172,480 274,978 71,888 140,747 150,177
Share in net income (losses) of subsidiaries (Note 11) – – – 836,004 464,999 (201,901)
Share in net income (losses) of an associate (Note 11) 73,133 (89,384) (37,893) 73,133 (89,384) (37,893)
Miscellaneous (Notes 21 and 29) 1,516,523 878,445 966,855 1,391,657 800,097 891,953
TOTAL OPERATING INCOME 25,728,097 21,788,941 19,572,326 21,787,581 18,206,381 16,039,602
Compensation and fringe benefits (Notes 24 and 29) 5,708,948 4,982,934 4,674,469 4,288,096 3,752,229 3,532,596
Taxes and licenses 2,264,025 2,000,404 1,587,118 1,819,331 1,573,887 1,252,878
Occupancy cost (Notes 26 and 29) 2,112,602 1,830,675 1,723,277 1,528,876 1,281,107 1,207,677
Insurance 1,440,153 1,163,507 990,788 1,241,575 991,179 827,026
Depreciation and amortization (Notes 12, 13 and 14) 1,217,489 1,124,786 979,412 877,240 775,210 676,286
Provision for impairment and credit losses (Note 16) 754,171 850,546 966,574 423,922 521,475 487,485
Transportation and traveling 378,703 298,666 311,587 289,903 218,136 222,276
Professional fees, marketing and other related services 312,042 268,394 245,760 222,509 182,275 187,773
Entertainment, amusement and recreation 287,105 242,710 276,809 182,172 146,993 156,289
Stationery, supplies and postage 268,901 241,786 241,151 197,567 193,232 150,956
Repairs and maintenance 104,298 123,025 160,902 69,276 87,734 102,882
Miscellaneous (Notes 21 and 29) 1,867,552 1,073,986 1,001,934 1,490,658 941,489 800,742
TOTAL OPERATING EXPENSES 16,715,989 14,201,419 13,159,781 12,631,125 10,664,946 9,604,866
INCOME BEFORE INCOME TAX 9,012,108 7,587,522 6,412,545 9,156,456 7,541,435 6,434,736
PROVISION FOR INCOME TAX (Note 27) 1,489,177 1,126,552 809,969 1,642,484 1,083,139 828,070
NET INCOME P7,522,931 P6,460,970 P5,602,576 P7,513,972 P6,458,296 P5,606,666
Attributable to:
Equity holders of the Parent Company (Note 32) P7,513,972 P6,458,296 P5,606,666
Non-controlling interest 8,959 2,674 (4,090)
P7,522,931 P6,460,970 P5,602,576
Basic/Diluted Earnings Per Share (Note 32) P2.91 P2.88 P2.50*

* Weighted average number of outstanding common shares in 2016 and 2015 was recomputed after giving retroactive effect to stock rights and stock
dividends distributed in 2017 (Note 23).
See accompanying Notes to Financial Statements.
 Financial Statements 113

STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in Thousands)

Consolidated Parent Company

Years Ended December 31
2017 2016 2015 2017 2016 2015

NET INCOME P7,522,931 P6,460,970 P5,602,576 P7,513,972 P6,458,296 P5,606,666

OTHER COMPREHENSIVE INCOME (LOSS)
Items that recycle to profit or loss in subsequent
periods:
Changes in fair value of available-for-sale financial
assets:
Fair value gain (loss) for the year, net of tax 158,946 449,110 (487,124) 113,020 512,562 (464,471)
Gains taken to profit or loss (Note 21) (365,145) (918,673) (638,723) (342,146) (856,031) (629,642)
Share in changes in other comprehensive income of
an associate (Note 11) (8,049) (5,457) (123,397) (8,049) (5,457) (123,397)
Share in changes in other comprehensive income of
subsidiaries (Note 11) – – – 55,692 (87,594) (56,844)
Cumulative translation adjustment (15,972) 12,455 (14,242) (29,255) (3,636) (14,914)
Items that do not recycle to profit or loss in
subsequent periods:
Remeasurement gain (loss) on defined benefit asset,
net of tax (Note 24) 30,149 71,075 (16,734) 9,678 50,560 10,030
Remeasurement loss on life insurance reserves (12,221) – – (12,221) – –

OTHER COMPREHENSIVE LOSS FOR THE YEAR,

NET OF TAX (212,292) (391,490) (1,280,220) (213,281) (389,596) (1,279,238)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR P7,310,639 P6,069,480 P4,322,356 P7,300,691 P6,068,700 P4,327,428
Total comprehensive income attributable to:
Equity holders of the Parent Company P7,300,691 6,068,700 4,327,428
Non-controlling interest 9,948 780 (5,072)
P7,310,639 6,069,480 4,322,356

See accompanying Notes to Financial Statements.

 114 China Bank Annual Financial and Sustainability Report 2017

STATEMENTS OF CHANGES IN EQUITY

(Amounts in Thousands)

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, 2017 P20,020,278 P6,987,564 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
Balance at January 1, 2016 P18,537,285 P6,987,564 P828,406 P33,800,748
Total comprehensive income (loss) for the year – – – 6,458,296
Additional acquisition of non-controlling interest – – – –
Transfer from surplus to surplus reserves – – 33,224 (33,224)
Stock dividends - 8.00% 1,482,993 – – (1,482,993)
Cash dividends - P1.00 per share – – – (1,853,728)
Balance at December 31, 2016 P20,020,278 P6,987,564 P861,630 P36,889,099
Balance at January 1, 2015 P17,164,143 P6,987,564 P800,006 P31,312,038
Total comprehensive income (loss) for the year – – – 5,606,666
Additional acquisition of non-controlling interest
Transfer from surplus to surplus reserves – – 28,400 (28,400)
Stock dividends - 8.00% 1,373,142 – – (1,373,142)
Cash dividends - P1.00 per share – – – (1,716,414)
Balance at December 31, 2015 P18,537,285 P6,987,564 P828,406 P33,800,748

See accompanying Notes to Financial Statements.

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, 2017 P20,020,278 P6,987,564 P861,630 P,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 (31.00 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
Balance at January 1, 2016 P18,537,285 P6,987,564 P828,406 P33,800,748
Total comprehensive income (loss) for the year – – – 6,458,296
Transfer from surplus to surplus reserves – – 33,224 (33,224)
Stock dividends - 8.00% 1,482,993 – – (1,482,993)
Cash dividends - P1.00 per share – – – (1,853,728)
Balance at December 31, 2016 P20,020,278 P6,987,564 P861,630 P36,889,099
Balance at January 1, 2015 P17,164,143 P6,987,564 P800,006 P31,312,038
Total comprehensive income (loss) for the year – – – 5,606,666
Transfer from surplus to surplus reserves – – 28,400 (28,400)
Stock dividends - 8.00% 1,373,142 – – (1,373,142)
Cash dividends - P1.00 per share – – – (1,716,414)
Balance at December 31, 2015 P18,537,285 P6,987,564 P828,406 P33,800,748

See accompanying Notes to Financial Statements.

 Financial Statements 115

Consolidated
Equity Attributable to Equity Holders of the Parent Company
Net Unrealized
Gains (Losses)
on Available- Remeasurement
for-Sale Gain on Defined Remeasurement
Financial Benefit Asset Cumulative Loss on Non- Controlling
Assets or Liability Translation Life Insurance Interest
(Note 9) (Note 24) Adjustment Reserve Total Equity (Note 11) Total Equity
(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
(P1,126,080) P183,155 (P34,634) P– P59,176,444 (P5,540) P59,170,904
(472,520) 70,790 12,134 – 6,068,700 780 6,069,480
– – – – – (452) (452)
– – – – – – –
– – – – – – –
– – – – (1,853,728) – (1,853,728)
(P1,598,600) P253,945 (P22,500) P– P63,391,416 (P5,212) P63,386,204
P122,920 P199,152 (P20,392) P– P56,565,431 P2,053 P56,567,483
(1,249,000) (15,997) (14,242) – 4,327,427 (5,072) 4,322,356
– (2,521) (2,521)
– – – – – – –
– – – – – – –
– – – – (1,716,414) (1,716,414)
(P1,126,080) P183,155 (P34,634) P– P59,176,444 (P5,540) P59,170,904

Parent Company
Net Unrealized Remeasurement
Gains (Losses) on Gain on Defined
Available-for- Benefit Asset or Cumulative Remesasurement
Sale Financial Liability Translation Loss on Life
Assets (Note 9) (Note 24) Adjustment Insurance Reserve Total Equity
(P1,598,600) P253,945 (P22,500) 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) P83,650,761
(P1,126,080) 183,155 (34,634) – 59,176,444
(472,520) 70,790 12,134 – 6,068,700
– – – – –
– – – – –
– – – – (1,853,728)
(P1,598,600) P253,945 (P22,500) P– P63,391,416
122,920 199,152 (20,392) – 56,565,431
(1,249,000) (15,997) (14,242) – 4,327,427
– – – – –
– – – – –
– – – – (1,716,414)
(P1,126,080) P183,155 (P34,634) P– P59,176,444
 116 China Bank Annual Financial and Sustainability Report 2017

STATEMENTS OF CASH FLOWS

(Amounts in Thousands)

Consolidated Parent Company

Years Ended December 31
2017 2016 2015 2017 2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax P9,012,108 P7,587,522 P6,412,545 P9,156,456 P7,541,435 P6,434,736
Adjustments for:
Depreciation and amortization (Notes 12, 13 and 14) 1,217,489 1,124,786 979,412 877,240 775,210 676,286
Provision for impairment and credit losses (Note 16) 754,171 850,546 966,574 423,922 521,745 487,485
Trading and securities gain on available-for-sale and
held-to-maturity financial assets (Note 21) (365,145) (918,673) (638,723) (342,146) (856,031) (629,642)
Gain on sale of investment properties (670,612) (443,315) (375,754) (614,587) (338,088) (353,249)
Gain on asset foreclosure and dacion transactions
(Note 13) (157,415) (172,480) (274,978) (71,888) (140,747) (150,177)
Share in net losses of an associate (Notes 2 and 11) (73,133) 89,384 37,893 (73,133) 89,384 37,893
Share in net losses (income) of subsidiaries
(Notes 2 and 11) – – – (836,004) (464,999) 201,900
Changes in operating assets and liabilities:
Decrease (increase) in the amounts of:
Financial assets at FVPL (8,510,654) (1,282,482) 2,160,869 (8,799,606) (1,590,640) 2,511,781
Loans and receivables (63,393,487) (78,836,033) (21,441,441) (57,873,074) (70,542,734) (15,073,046)
Other assets 6,159 (1,225,573) (444,632) 275,322 (882,576) (1,230,263)
Increase (decrease) in the amounts of:
Deposit liabilities 93,510,375 102,317,332 39,964,142 88,273,987 97,358,575 32,518,781
Manager’s checks 411,264 573,280 235,103 263,663 704,106 (80,700)
Accrued interest and other expenses 759,429 283,916 (46,474) 722,597 300,356 (51,480)
Other liabilities 177,618 827,790 1,070,312 (540,630) 759,981 1,262,845
Net cash generated from operations 32,678,167 30,776,000 28,604,848 30,842,119 33,234,977 26,563,150
Income taxes paid (1,554,045) (973,575) (507,801) (1,274,667) (863,477) (414,842)
Net cash provided by operating activities 31,124,122 29,802,425 28,097,047 29,567,452 32,371,500 26,148,308
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to bank premises, furniture, fixtures and
equipment (Note 12) (1,752,173) (1,258,911) (1,493,982) (1,387,684) (1,065,308) (1,400,741)
Additions to equity investments (Note 11) – – – (500,000) (2,700,452) (4,002,521)
Liquidation of a subsidiary (Note 11) – – – – 50,000 –
Purchases of:
Held-to-maturity financial assets (23,618,560) (41,647,865) (4,490,149) (23,599,743) (41,007,909) (3,081,425)
Available-for-sale financial assets (54,304,672) (89,249,294) (54,192,915) (53,171,027) (87,747,373) (53,870,729)
Proceeds from sale/maturity of:
Held-to-maturity financial assets 15,737,093 374,569 463,346 16,135,271 884,532 489,568
Available-for-sale financial assets 41,891,950 104,653,914 43,031,164 41,500,714 103,940,382 43,647,299
Investment properties 1,335,946 977,963 1,137,792 846,974 675,003 327,682
Bank premises, furniture, fixtures and equipment 275,109 151,286 567,758 242,202 199,460 571,677
Net cash used in investing activities (20,435,307) (25,998,338) (14,976,986) (19,933,293) (26,771,665) (17,319,190)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bills payable 252,268,556 18,588,791 19,151,089 252,268,556 18,588,791 18,488,559
Settlement of bills payable (249,105,524) (20,718,973) (6,386,489) (249,105,524) (20,056,443) (5,243,510)
Settlement of subordinated debt (Note 18) – – (1,188,762) – – –
Payments of cash dividends (Note 23) (1,988,720) (1,853,728) (1,716,414) (1,988,720) (1,853,728) (1,716,414)
Acquisitions of non-controlling interest (Note 11) – (452) (2,521) – – –
Proceeds from issuance of common shares (Note 23) 14,999,463 – – 14,999,463 – –
Transaction cost on the issuance of common shares
(Note 23) (52,089) (52,089)
Net cash provided by (used in) financing activities 16,121,687 (3,984,362) 9,856,903 16,121,687 (3,321,380) 11,528,635
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 26,810,502 (180,277) 22,976,964 25,755,846 2,278,455 20,357,753
(Forward)
 Financial Statements 117

Consolidated Parent Company

Years Ended December 31
2017 2016 2015 2017 2016 2015
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS P26,810,502 (P180,277) P22,976,964 P25,755,846 P2,278,455 P20,357,753
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR
Cash and other cash items 12,010,543 11,377,101 10,734,059 10,580,748 10,052,891 9,295,130
Due from Bangko Sentral ng Pilipinas (Note 7) 91,964,495 86,318,501 67,451,648 85,307,128 77,003,616 60,543,867
Due from other banks (Note 7) 11,332,236 21,243,492 17,552,823 9,689,165 19,200,544 15,836,701
Securities purchased under resale agreements (Note 8) 3,451,543 – 223,600 2,958,465 – 223,600
118,758,817 118,939,094 95,962,130 108,535,506 106,257,051 85,899,298
CASH AND CASH EQUIVALENTS AT END OF YEAR
Cash and other cash items 12,685,984 12,010,543 11,377,101 11,160,173 10,580,748 10,052,891
Due from Bangko Sentral ng Pilipinas (Note 7) 98,490,014 91,964,495 86,318,501 91,717,037 85,307,128 77,003,616
Due from other banks (Note 7) 15,641,476 11,332,236 21,243,492 14,066,620 9,689,165 19,200,544
Securities purchased under resale agreements (Note 8) 18,751,845 3,451,543 – 17,347,522 2,958,465 –
P145,569,319 P118,758,817 P118,939,094 P134,291,352 P108,535,506 P106,257,051

OPERATING CASH FLOWS FROM INTEREST

Consolidated Parent Company

As of December 31

2017 2016 2015 2017 2016 2017

Interest paid P6,652,755 P5,028,667 P4,240,401 P5,359,209 P3,812,560 P3,020,972
Interest received 25,835,369 21,498,837 18,932,577 21,322,995 17,273,294 15,163,965

See accompanying Notes to Financial Statements.

 118 China Bank Annual Financial and Sustainability Report 2017

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 436 and 391 local branches as of December 31, 2017 and 2016, 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 2017 2016 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% − Philippines Stock Brokerage

*Established in 2016, 100% owned through CBCC

**Obtained control on March 6, 2017, 100% owned through CBCC (see note 11)

The Parent Company has no ultimate parent company. SM Investments Corporation, its significant investor, has effective ownership in the
Parent Company of 19.90% as of December 31, 2017 and 2016.

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 (FVPL) and available-for-sale (AFS) financial assets. The financial statements are presented in Philippine peso, and all values are rounded
to the nearest thousand peso 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 22.
 Financial Statements 119

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.
120 China Bank Annual Financial and Sustainability Report 2017

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, 2017.
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:

• New and Amended Standards

• Amendments to PAS 7, Statement of Cash Flows, Disclosure Initiative
On January 1, 2017, the Group adopted the amendments to PAS 7, Statement of Cash Flows, Disclosure Initiative. The amendments
require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from
financial activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or
losses). On initial application of the amendments, entities are not required to provide comparative information to preceding
periods.

The reconciliation analysis of liabilities arising from financing activities is presented in Note 34.

• Amendments to PAS 12, Income Taxes, Recognition of Deferred Tax Assets for Unrealized Losses

• Annual Improvements to PFRSs (2014 – 2016 Cycle)

• Amendment to PFRS 12, Clarification of the Scope of the Standard

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 Philippine Dealing System (PDS) closing rate prevailing 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 PDS closing rate prevailing at the reporting date, and its income and expenses are translated at the 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 AFS financial assets 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.

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.
 Financial Statements 121

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, 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 an d 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.

Securities Purchased under Resale Agreement

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 and Subsequent Measurement

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 unrecognized financial asset is recognized in the statement of income
for assets classified as financial assets at FVPL, and in equity for assets classified as AFS financial assets. 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. The Group classifies its financial assets in the following categories: financial assets at
FVPL, held-to-maturity (HTM) financial assets, AFS financial assets, and loans and receivables while financial liabilities are classified as financial
liabilities at FVPL and financial liabilities carried at amortized cost. The classification depends on the purpose for which the investments were
acquired and whether they are quoted in an active market. Management determines the classification of its investments at initial recognition
and, where allowed and appropriate, re-evaluates such designation at every reporting date.

‘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.

Financial instruments at FVPL

Financial instruments at FVPL include financial assets and liabilities held for trading purposes, financial assets and financial liabilities designated
upon initial recognition as at FVPL, and derivative instruments.

Financial instruments held for trading

Financial instruments held for trading (HFT) include government and corporate debt securities purchased and held principally with the intention
of selling them in the near term. These securities are carried at fair value, and realized and unrealized gains and losses on these instruments are
recognized as ‘Trading and securities gain - net’ in the statement of income. Interest earned or incurred on financial instruments held for trading
is reported in the statement of income under ‘Interest income’ (for financial assets) and ‘Interest expense’ (for financial liabilities).
122 China Bank Annual Financial and Sustainability Report 2017

Financial instruments designated at FVPL

Financial instruments are designated as at FVPL by management on initial recognition when any of the following criteria is met:

• the designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from measuring the assets or
liabilities or recognizing gains or losses on them on a different basis; or
• the assets and liabilities are part of a group of financial assets, financial liabilities or both which are managed and their performance
evaluated on a fair value basis, in accordance with a documented risk management or investment strategy; or
• the financial instrument contains an embedded derivative, unless the embedded derivative does not significantly modify the cash flows or
it is clear, with little or no analysis, that it would not be separately recorded.

Financial instruments at FVPL are recorded in the balance sheet at fair value. Changes in fair value are recognized in ‘Trading and securities
gain - net’ in the statement of income. Interest earned or incurred is reported in the statement of income under ‘Interest income’ or ‘Interest
expense’, respectively, while dividend income is reported in the statement of income under ‘Miscellaneous income’ when the right to receive
payment has been established.

As of December 31, 2017 and 2016, financial assets designated as at FVPL consist of instruments in shares of stocks.

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.

Held-to-maturity financial assets

HTM financial assets are quoted non-derivative financial assets with fixed or determinable payments and fixed maturities for which the Group’s
management has the positive intention and ability to hold to maturity. Where the Group would sell other than an insignificant amount of HTM
financial assets, the entire category would be tainted and reclassified as AFS financial assets and the Group would be prohibited from classifying
any financial asset under HTM category during the current year and two succeeding years thereafter unless for sales or reclassifications that:
• are so close to maturity or the financial asset’s call date (for example, less than three months before maturity) that changes in the market
rate of interest would not have a significant effect on the financial asset’s fair value;
• occur after the entity has collected substantially all of the financial asset’s original principal through scheduled payments or prepayments;
or
• are attributable to an isolated event that is beyond the entity’s control, is non-recurring and could not have been reasonably anticipated by
the entity.

After initial measurement, these investments are subsequently measured at amortized cost using the effective interest method, less any
impairment in value. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees that are an integral
part of the effective interest rate (EIR). The amortization is included in ‘Interest income’ in the statement of income. Gains and losses are
recognized in income when the HTM financial assets are derecognized and impaired, as well as through the amortization process. The losses
arising from impairment of such investments are recognized in the statement of income under ‘Provision for impairment and credit losses’. The
effects of translation of foreign currency-denominated HTM financial assets are recognized in the statement of income. This account consists
of government and corporate debt securities.
 Financial Statements 123

Loans and receivable

This accounting policy relates to the balance sheet captions ‘Due from BSP’, ‘Due from other banks’, ‘SPURA’, ‘Loans and receivables’,
‘Accrued interest receivable’, ‘Accounts receivable’, ‘Sales contract receivable’ (SCR), ‘Returned checks and other cash items’ (RCOCI), and
‘Miscellaneous financial assets’. These are financial assets with fixed or determinable payments that are not quoted in an active market, other
than:

• those that the Group intends to sell immediately or in the near term and those that the Group, upon initial recognition, designates as FVPL;
• those that the Group, upon initial recognition, designates as AFS; and
• those for which the Group may not cover substantially all of its initial investment, other than because of credit deterioration.

After initial measurement, these are subsequently measured at amortized cost using the effective interest method, less allowance for impairment.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees and costs that are an integral part of the
EIR. The amortization is included under ‘Interest income’ in the statement of income. The losses arising from impairment are recognized under
‘Provision for impairment and credit losses’ in the statement of income.

Available-for-sale financial assets

AFS financial assets are those which are designated as such or do not qualify to be classified as financial assets at FVPL, HTM financial assets,
or loans and receivables. They are purchased and held indefinitely, and may be sold in response to liquidity requirements or changes in market
conditions. They include equity investments, money market papers and government and corporate debt securities.

After initial measurement, AFS financial assets are subsequently measured at fair value. The effective yield component of AFS debt securities,
as well as the impact of translation of foreign currency-denominated AFS debt securities, is reported in the statement of income. The unrealized
gains and losses arising from the fair valuation of AFS financial assets are excluded, net of tax, from reported earnings and are reported as ‘Net
unrealized gains (losses) on AFS financial assets’ under OCI.

When the security is disposed of, the cumulative gain or loss previously recognized in OCI is recognized as ‘Trading and securities gain - net’
in the statement of income. Interest earned on holding AFS debt securities are reported as ‘Interest income’ using the EIR. Dividends earned
on holding AFS equity instruments are recognized in the statement of income as ‘Miscellaneous income’ when the right to the payment has
been established. The losses arising from impairment of such investments are recognized as ‘Provision for impairment and credit losses’ in the
statement of income.

Other financial liabilities

These are issued financial instruments or their components which are not designated as at FVPL and where the substance of the contractual
arrangement results in the Group having an obligation either to deliver cash or another financial asset to the holder, or to satisfy the obligation
other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of its own equity shares. The components
of issued financial instruments that contain both liability and equity elements are accounted for separately, with the equity component being
assigned the residual amount after deducting from the instrument as a whole the amount separately determined as the fair value of the liability
component on the date of issue.

After initial measurement, other financial liabilities not qualified and not designated as at FVPL are subsequently measured at amortized cost
using the effective interest method. Amortized cost is calculated by taking into account any discount or premium on the issue and fees that
are an integral part of the EIR.

This accounting policy relates to the balance sheet captions ‘Deposit liabilities’, ‘Bills payable’, ‘Manager’s checks’, and financial liabilities
presented under ‘Accrued interest and other expenses’ and ‘Other liabilities’.

Reclassification of Financial Assets

The Group may reclassify, in rare circumstances, non-derivative financial assets out of the HFT investments category and into the AFS financial
assets, Loans and Receivables or HTM financial assets categories. The Group may also reclassify, in certain circumstances, financial instruments
out of the AFS financial assets to loans and receivables category. Reclassifications are recorded at fair value at the date of reclassification, which
becomes the new amortized cost.

The Group may reclassify a non-derivative trading asset out of HFT investments and into the Loans and Receivable category if it meets the
definition of loans and receivables, the Group has the intention and ability to hold the financial assets for the foreseeable future or until maturity
and only in rare circumstances. If a financial asset is reclassified, and if the Group subsequently increases its estimates of future cash receipts
as a result of increased recoverability of those cash receipts, the effect of that increase is recognized as an adjustment to the EIR from the date
of the change in estimate.

For a financial asset reclassified out of the AFS financial assets category, any previous gain or loss on that asset that has been recognized in
OCI is amortized to profit or loss over the remaining life of the investment using the effective interest method. Any difference between the new
amortized cost and the expected cash flows is also amortized over the remaining life of the asset using the effective interest method. If the asset
is subsequently determined to be impaired then the amount recorded in OCI is recycled to the statement of income. Reclassification is at the
election of management, and is determined on an instrument by instrument basis. The Group does not reclassify any financial instrument into
the FVPL category after initial recognition. An analysis of reclassified financial assets is disclosed in Note 9.
124 China Bank Annual Financial and Sustainability Report 2017

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.

Impairment of 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. 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.

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 Statements 125

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.

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.

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.
126 China Bank Annual Financial and Sustainability Report 2017

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 PAS 39, 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.

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
 Financial Statements 127

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.

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
is the higher of the CGU’s fair value less costs to sell and its 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).
128 China Bank Annual Financial and Sustainability Report 2017

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.

Leases
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.

Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably
measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable,
taking into account contractually defined terms of payment and excluding taxes or duty. The Group assesses its revenue arrangements against
specific criteria in order to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its
revenue arrangements.

The following specific recognition criteria must also be met before revenue is recognized:

Interest income
For all financial instruments measured at amortized cost and interest-bearing financial instruments classified as FVPL and AFS financial assets,
interest income is recorded at 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.
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’.

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.
 Financial Statements 129

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 that 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. 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.

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.

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 including all gains and losses from changes in fair value of financial assets held for trading
and designated at FVPL. It also includes gains and losses realized from sale of AFS financial assets.

Other income
Income from sale of service is recognized upon rendition of the service. Income from sale of properties is recognized when risks and rewards
have been transferred and when the collectability of the sales price is reasonably assured.

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.
130 China Bank Annual Financial and Sustainability Report 2017

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 Parent Company,
nor can they be paid directly to the Parent Company. 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 Parent Company’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.

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.
 Financial Statements 131

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.

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 31. 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

Effective beginning on or after January 1, 2018

Amendments to PFRS 2, Share-based Payment, Classification and Measurement of Share-based Payment Transactions

The amendments to PFRS 2 address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based
payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and
the accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash
settled to equity settled.

On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permitted if elected
for all three amendments and if other criteria are met. Early application of the amendments is permitted.

The above amendments have no impact on the Group’s financial statements as the Group does not have share-based payment schemes.

Amendments to PFRS 4, Insurance Contracts, Applying PFRS 9, Financial Instruments, with PFRS 4
The amendments address concerns arising from implementing PFRS 9, the new financial instruments standard before implementing the
forthcoming insurance contracts standard. They allow entities to choose between the overlay approach and the deferral approach to deal with
the transitional challenges. The overlay approach gives all entities that issue insurance contracts the option to recognize in OCI, rather than profit
or loss, the volatility that could arise when PFRS 9 is applied before the new insurance contracts standard is issued. On the other hand, the
deferral approach gives entities whose activities are predominantly connected with insurance an optional temporary exemption from applying
PFRS 9 until the earlier of application of the forthcoming insurance contracts standard or January 1, 2021.

These amendments are not expected to have any significant impact on the Group.

PFRS 9, Financial Instruments

PFRS 9 replaces PAS 39, Financial Instruments: Recognition and Measurement and is effective for annual periods beginning on or after
January 1, 2018. Early application is permitted if an entity applies all the requirements of the standard.
132 China Bank Annual Financial and Sustainability Report 2017

PFRS 9 is required to be applied on a retrospective basis, with certain exceptions. As permitted, the Group will not restate the Group prior
period comparative consolidated financial statements when the Group adopts the requirements of the new standard. Differences in the carrying
amounts of financial instruments resulting from the adoption of PFRS 9 will be recognized in the opening January 1, 2018 surplus and OCI as
if the Group had always followed the new requirements.

In the period of initial application, the requirements of PFRS 9 on the classification and measurement of financial assets and on the recognition
of expected credit losses will have an impact on the Group’s and Parent Company’s financial statements. The opening January 1, 2018
surplus and OCI in the Group’s and Parent Company’s statement of financial position are expected to change as a result of applying PFRS 9’s
requirements on classification and measurement of financial assets. This change will result from reclassifications of financial assets depending
on the Group’s and the Parent Company’s application of its business models and its assessment of the financial assets’ cash flow characteristics.
The opening January 1, 2018 surplus and OCI in the Group’s and Parent Company’s statement of financial position are also expected to change
as a result of applying PFRS 9’s requirements on the recognition of expected credit losses. This change depends on whether there have been
significant increases in the credit risk of the Group’s and Parent Company’s financial assets since initial recognition and on the Group’s and
Parent Company’s evaluation of factors relevant to the measurement of expected credit losses such as a range of possible outcomes and
information about past events, current conditions and forecasts of future economic conditions. During 2018, PFRS 9’s requirements will have
an impact on the Group’s and Parent Company’s financial statements depending on certain factors such as the financial assets’ corresponding
business models, cash flow characteristics, and changes in credit risks. The Group is still completing its assessment of the impact of PFRS 9.

In the period of initial application, the requirements of PFRS 9 on the classification and measurement of financial liabilities and on the application
of hedge accounting are not expected to have an impact on the Group’s and Parent Company’s financial statements.

The key changes to the Group’s accounting policies resulting from the adoption of PFRS 9 are described below.

Classification and measurement

The PFRS 9 classification and measurement model requires that all debt financial assets that do not meet the “solely payment of principal and
interest” (SPPI) test, including those that contain embedded derivatives, be classified at initial recognition as at fair value through profit or loss
(FVPL). The intent of the SPPI test is to ensure that debt instruments that contain non-basic lending features, such as conversion options and
equity linked pay-outs, are measured at FVPL. Subsequent measurement of instruments classified as FVPL under PFRS 9 operates in a similar
manner to financial instruments held for trading under PAS 39.

For debt financial assets that meet the SPPI test, classification at initial recognition will be determined based on the business model under which
these instruments are managed. Debt instruments that are managed on a “held for trading” or “fair value” basis will be classified as at FVPL.
Debt instruments that are managed on a “hold to collect and for sale” basis will be classified as at fair value through OCI (FVOCI) for debt. Debt
instruments that are managed on a “hold to collect” basis will be classified as at amortized cost. Subsequent measurement of instruments
classified as at FVOCI and amortized cost classifications under PFRS 9 operate in a similar manner to AFS financial assets for debt financial
assets and loans and receivables, respectively, under existing PAS 39, except for the impairment provisions which are discussed below.

For those debt financial assets that would otherwise be classified as at FVOCI or amortized cost, an irrevocable designation can be made at
initial recognition to instead measure the debt instrument at FVPL under the fair value option (FVO) if doing so eliminates or significantly reduces
an accounting mismatch.

All equity financial assets are required to be classified at initial recognition as at FVPL unless an irrevocable designation is made to classify the
instrument as at FVOCI for equities. Unlike AFS for equity securities under PAS 39, the FVOCI for equities category results in all realized and
unrealized gains and losses being recognized in OCI with no recycling to profit and loss. Only dividends will continue to be recognized in profit
and loss.

The classification and measurement of financial liabilities remain essentially unchanged from the current PAS 39 requirements, except that
changes in fair value of FVO liabilities attributable to changes in own credit risk are to be presented in OCI, rather than profit and loss.

Derivatives will continue to be measured at FVPL under PFRS 9.

Impairment
The new impairment guidance sets out an expected credit loss (ECL) model applicable to all debt instrument financial assets classified as
amortized cost or FVOCI. In addition, the ECL model applies to loan commitments and financial guarantees that are not measured at FVPL.

Expected Credit Loss Methodology

The application of ECL will significantly change the Group credit loss methodology and models. ECL allowances represent credit losses
that reflect an unbiased and probability-weighted amount 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.
ECL allowances will be 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 or when there is objective evidence of impairment. This compares
to the present incurred loss model that incorporates a single best estimate, the time value of money and information about past events and
current conditions and which recognizes lifetime credit losses when there is objective evidence of impairment and also allowances for incurred
but not identified credit losses.
 Financial Statements 133

Stage Migration and Significant Increase in Credit Risk

Financial instruments subject to the ECL methodology are categorized into three stages.

For non-impaired financial instruments:

Stage 1 is comprised of all non-impaired financial instruments which have not experienced a SICR since initial recognition. Entities are required
to recognize 12-month ECL for stage 1 financial instruments. In assessing whether credit risk has increased significantly, entities are required to
compare the risk of a default occurring on the financial instrument as at the reporting date, with the risk of a default occurring on the financial
instrument as at the date of initial recognition.

Stage 2 is comprised of all non-impaired financial instruments which have experienced a SICR since initial recognition. Entities are required to
recognize lifetime ECL for stage 2 financial instruments. In subsequent reporting periods, if the credit risk of the financial instrument improves
such that there is no longer a SICR since initial recognition, then entities shall revert to recognizing 12 months of ECL. In contrast to stage 1
and stage 2, inherent within the incurred loss methodology under PAS 39, allowances are provided for non-impaired financial instruments for
credit losses that are incurred but not yet identified.

For 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 financial instrument or a portfolio of
financial instruments. The ECL model requires that lifetime ECL be recognized for impaired financial instruments, which is similar to the current
requirements under PAS 39 for impaired financial instruments.

PFRS 15, Revenue from Contracts with Customers

PFRS 15 establishes a new five-step model that will apply to revenue arising from contracts with customers. Under PFRS 15, revenue is
recognized 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 principles in PFRS 15 provide a more structured approach to measuring and recognizing revenue.

The new revenue standard is applicable to all entities and will supersede all current revenue recognition requirements under PFRSs. Either a
full or modified retrospective application is required for annual periods beginning on or after January 1, 2018. The Group plans to adopt the
modified retrospective method.

The Group is currently assessing the impact of adopting this standard.

Amendments to PAS 28, Measuring an Associate or Joint Venture at Fair Value (Part of Annual Improvements to PFRSs 2014 - 2016 Cycle)
The amendments clarify that an entity that is a venture capital organization, or other qualifying entity, may elect, at initial recognition on an
investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss. They also clarify
that if an entity that is not itself an investment entity has an interest in an associate or joint venture that is an investment entity, the entity may,
when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the
investment entity associate’s or joint venture’s interests in subsidiaries. This election is made separately for each investment entity associate or
joint venture, at the later of the date on which (a) the investment entity associate or joint venture is initially recognized; (b) the associate or joint
venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent. The amendments should
be applied retrospectively, with earlier application permitted.

These amendments are not expected to have any impact on the Group.

Amendments to PAS 40, Investment Property, Transfers of Investment Property

The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment
property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property
and there is evidence of the change in use. A mere change in management’s intentions for the use of a property does not provide evidence of a
change in use. The amendments should be applied prospectively to changes in use that occur on or after the beginning of the annual reporting
period in which the entity first applies the amendments. Retrospective application is only permitted if this is possible without the use of hindsight.

The Group does not expect any effect on its financial statements upon adoption of these amendments.

Philippine Interpretation IFRIC-22, Foreign Currency Transactions and Advance Consideration

The interpretation clarifies that in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or
part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is
the date on which an entity initially recognizes the nonmonetary asset or non-monetary liability arising from the advance consideration. If there
are multiple payments or receipts in advance, then the entity must determine a date of the transactions for each payment or receipt of advance
consideration. The interpretation may be applied on a fully retrospective basis. Entities may apply the interpretation prospectively to all assets,
expenses and income in its scope that are initially recognized on or after the beginning of the reporting period in which the entity first applies
the interpretation or the beginning of a prior reporting period presented as comparative information in the financial statements of the reporting
period in which the entity first applies the interpretation.
134 China Bank Annual Financial and Sustainability Report 2017

The Group does not expect any effect on its financial statements upon adoption of these amendments.

Effective beginning on or after January 1, 2019

PFRS 16, Leases
Under the new standard, lessees will no longer classify their leases as either operating or finance leases in accordance with PAS 17, Leases.
Rather, lessees will apply the single-asset model. Under this model, lessees will recognize the assets and related liabilities for most leases on
their balance sheets, and subsequently, will depreciate the lease assets and recognize interest on the lease liabilities in their profit or loss. Leases
with a term of 12 months or less or for which the underlying asset is of low value are exempted from these requirements.

The accounting by lessors is substantially unchanged as the new standard carries forward the principles of lessor accounting under PAS 17.
Lessors, however, will be required to disclose more information in their financial statements, particularly on the risk exposure to residual value.

Entities may early adopt PFRS 16 but only if they have also adopted PFRS 15. When adopting PFRS 16, an entity is permitted to use either a
full retrospective or a modified retrospective approach, with options to use certain transition reliefs.

The Group is currently assessing the impact of adopting this standard.

Amendments to PFRS 9, Prepayment Features with Negative Compensation

The amendments to PFRS 9 allow debt instruments with negative compensation prepayment features to be measured at amortized cost or
fair value through other comprehensive income. An entity shall apply these amendments for annual reporting periods beginning on or after
January 1, 2019. Earlier application is permitted.

Amendments to PAS 28, Long-term Interests in Associates and Joint Ventures

The amendments to PAS 28 clarify that entities should account for long-term interests in an associate or joint venture to which the
equity method is not applied using PFRS 9. An entity shall apply these amendments for annual reporting periods beginning on or after
January 1, 2019. Earlier application is permitted.

The amendment are not expected to have any impact on the Group.

Philippine 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
and 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

An entity must determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax
treatments. The approach that better predicts the resolution of the uncertainty should be followed.

The Group is currently assessing the impact of adopting this interpretation.

Deferred effectivity
Amendments to PFRS 10 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, Business Combinations. 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 (IASB) 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.
 Financial Statements 135

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. Fair value of financial instruments
The Group classifies financial assets by evaluating, among others, whether the asset is quoted or not in an active market. Included in the
evaluation on whether a financial asset is quoted in an active market is the determination of whether quoted prices are readily and regularly
available, and whether those prices represent actual and regularly occurring market transactions conducted on an arm’s length basis.

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. HTM financial assets

The classification to HTM financial assets requires significant judgment. In making this judgment, the Group evaluates its intention
and ability to hold such investments to maturity. If the Group fails to keep these investments to maturity other than in certain specific
circumstances - for example, selling an insignificant amount close to maturity - it will be required to reclassify the entire portfolio as part of
AFS financial assets. The investments would therefore be measured at fair value and not at amortized cost.

Details of AFS financial assets reclassified to HTM are disclosed in Note 9.

c. 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 30). 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.

Estimates
a. Credit losses on loans and receivables
The Group reviews its loans and receivables at each reporting date to assess whether an allowance for credit losses should be recorded
in the balance sheet and any changes thereto in the statement of income. In particular, judgment by management is required in the
estimation of the amount and timing of future cash flows when determining the level of allowance required. Such estimates are based on
assumptions about a number of factors such as the financial condition of the borrower, estimated future cash flows, observable market
prices and estimated net selling prices of the related collateral. Actual results may also differ, resulting in future changes to the allowance.

In addition to specific allowance against individually significant loans and receivables, the Group also makes a collective impairment
assessment on exposures which, although not specifically identified as requiring a specific allowance, have a greater risk of default
than when originally granted. The resulting collective allowance is based on historical loss experience adjusted on the basis of current
observable data for assets with similar credit risk characteristics.

The carrying values of loans and receivables and the related allowance for credit losses of the Group and the Parent Company are
disclosed in Notes 10 and 16.

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 terminal value 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 the higher between
fair value less costs of disposal (FVLCD) and its value-in-use (VIU). FVLCD of branch licenses is based on the special licensing fee of BSP
on branches operating on identified restricted areas. 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
terminal value growth rates.
136 China Bank Annual Financial and Sustainability Report 2017

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 24.

e. Recognition of deferred income taxes

Deferred tax assets are recognized for all unused tax losses 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 27.

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.

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

2017 2016 2017 2016
Financial assets
Cash and other cash items P12,685,984 P12,010,543 P11,160,173 P10,580,748
Financial assets at FVPL 16,238,888 7,703,899 16,056,823 7,232,882
AFS financial assets 46,445,391 33,873,723 42,937,083 31,153,750
HTM financial assets 65,286,267 57,404,800 61,533,493 54,069,021
Loans and receivables:
Due from BSP 98,490,014 91,964,495 91,717,037 85,307,128
Due from other banks 15,641,476 11,332,236 14,066,620 9,689,165
SPURA 18,751,845 3,451,543 17,347,522 2,958,465
Loans and receivables 448,970,942 386,827,300 386,554,498 329,069,859
Accrued interest receivable 3,718,505 3,014,529 3,189,083 2,666,353
Other assets 3,645,678 4,933,768 1,594,757 2,990,134
589,218,460 501,523,871 514,469,517 432,681,104
Total financial assets P729,874,990 P612,516,836 P646,157,089 P535,717,505
*Other assets include accounts receivables, SCR, RCOCI and miscellaneous financial assets (Note 15).
 Financial Statements 137

Consolidated Parent Company

2017 2016 2017 2016
Financial liabilities
Other financial liabilities:
Deposit liabilities P635,093,393 P541,583,018 P559,235,979 P470,961,992
Bills payable 20,118,031 16,954,998 20,118,031 16,954,998
Manager’s checks 2,441,042 2,029,778 1,709,248 1,445,585
Accrued interest and other expenses* 1,381,441 870,204 1,068,572 577,550
Other liabilities** 5,399,076 5,238,408 3,509,795 4,089,817
664,432,983 566,676,406 585,641,625 494,029,942
Financial liabilities at FVPL:
Derivative liabilities 267,533 243,198 267,533 243,198
Total financial liabilities P664,700,516 P566,919,604 P585,909,158 P494,273,140
*Accrued interest and other expenses includes accrued interest payable and accrued other expenses payable (Note 19).
**Other liabilities exclude withholding taxes payable and retirement liabilities (Note 20).

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 AFS
financial assets. Non-recurring fair value measurements are those that another PFRS requires or permits to be recognized in the balance sheet
in particular circumstances. For example, PFRS 5 requires an entity to measure an asset held for sale at the lower of its carrying amount and
fair value less costs to sell. Since the asset’s fair value less costs to sell is only recognized in the balance sheet when it is lower than its carrying
amount, that fair value measurement is non-recurring.

As of December 31, 2017 and 2016, except for the following financial instruments, the carrying values of the Group’s financial assets and
liabilities as reflected in the balance sheets and related notes approximate their respective fair values:

Consolidated
2017 2016
Carrying Value Fair Value Carrying Value Fair Value
Financial Assets
HTM financial assets (Note 9)
Government bonds P52,998,477 P51,488,294 P42,638,409 P40,492,328
Private bonds 12,287,790 12,110,870 14,766,391 14,581,086
Loans and receivables (Note 10)
Corporate and commercial loans 365,117,654 349,880,762 315,140,091 294,494,449
Consumer loans 71,577,984 74,207,566 58,528,805 53,251,627
Trade-related loans 12,062,711 12,041,107 12,767,908 12,945,460
Others 212,593 196,307 390,496 309,048
Sales contracts receivable (Note 15) 918,147 1,060,191 893,084 876,406
Financial Liabilities
Deposit liabilities (Note 17) 292,083,031 282,586,204 265,164,139 257,683,489
Bills payable (Note 18) − − 16,954,998 16,409,581
138 China Bank Annual Financial and Sustainability Report 2017

Parent Company
2017 2016
Carrying Value Fair Value Carrying Value Fair Value
Financial Assets
HTM financial assets (Note 9)
Government bonds P50,263,703 P48,754,016 P39,952,630 P37,832,994
Private bonds 11,269,790 11,354,669 14,116,391 13,939,793
Loans and receivables (Note 10)
Corporate and commercial loans 333,430,383 315,853,285 283,740,901 264,258,587
Consumer loans 42,556,905 41,952,821 34,149,927 29,357,086
Trade-related loans 10,513,204 10,417,129 11,110,851 11,289,013
Others 54,006 63,198 68,180 79,805
Sales contracts receivable (Note 15) 184,092 200,134 224,149 267,688
Financial Liabilities
Deposit liabilities (Note 17) 240,712,750 236,777,045 215,924,029 207,506,093
Bills payable (Note 18) − − 16,954,998 16,409,581

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, 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 for which no
reliable basis for fair value measurement is available, these are carried at cost net of impairment, if any.

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.

Bills payable - 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.
 Financial Statements 139

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.

As of December 31, 2017 and 2016, the fair value hierarchy of the Group’s and the Parent Company’s assets and liabilities are presented below:

Consolidated
2017
Level 1 Level 2 Level 3 Total
Recurring fair value measurements(a)
Financial assets at FVPL
Held-for-trading
Government bonds P5,792,345 P119,314 P– P5,911,659
Treasury notes 1,413,940 479,252 – 1,893,192
Treasury bills 315,996 1,709,371 – 2,025,367
Private bonds 2,663,397 – – 2,663,397
Financial assets designated at FVPL 3,411,686 – – 3,411,686
Derivative assets – 333,587 – 333,587
AFS financial assets
Government bonds 25,761,577 9,467,927 – 35,229,504
Quoted private bonds 11,051,657 38,781 – 11,090,438
Quoted equity shares 67,903 – – 67,903
P50,478,501 P12,148,232 P– P62,626,733
Financial liabilities at FVPL
Derivative liabilities P– P267,533 P– P267,533
P– P267,533 P– P267,533
Fair values of assets carried at amortized cost/cost(a)
HTM financial assets
Government bonds P51,488,294 P– P– P51,488,294
Private bonds 12,110,870 – – 12,110,870
Loans and receivables
Corporate and commercial loans – – 349,880,762 349,880,762
Consumer loans – – 74,207,566 74,207,566
Trade-related loans – – 12,041,107 12,041,107
Others – – 196,307 196,307
Sales contracts receivable – – 1,060,191 1,060,191
Investment properties(b)
Land – – 7,091,280 7,091,280
Buildings and improvements – – 2,406,887 2,406,887
P63,599,164 P– P446,884,100 P510,483,264
Fair values of liabilities carried at amortized cost(a)
Deposit liabilities P– P– P625,596,566 P625,596,566
Bills payable P– P– P19,825,796 P19,825,796
P– P– P645,422,362 P645,422,362
(a) valued as of December 31, 2017
(b) valued at various dates in 2017 and 2016
140 China Bank Annual Financial and Sustainability Report 2017

Consolidated
2016
Level 1 Level 2 Level 3 Total
Recurring fair value measurements(a)
Financial assets at FVPL
Held-for-trading
Government bonds P2,322,038 P82,011 P– P2,404,049
Treasury notes 307,455 724,220 – 1,031,675
Treasury bills papers − 994,203 – 994,203
Private bonds 594,798 − – 594,798
Financial assets designated at FVPL 2,462,886 − – 2,462,886
Derivative assets − 216,288 – 216,288
AFS financial assets
Government bonds 21,822,016 − – 21,822,016
Quoted private bonds 4,735,050 6,682,562 – 11,417,612
Quoted equity shares 80,947 − – 80,947
P32,325,190 P8,699,284 P– P41,540,049
Financial liabilities at FVPL
Derivative liabilities P− P243,198 P− P243,198
P− P243,198 P− P243,198
Fair values of assets carried at amortized cost/cost(a)
HTM financial assets
Government bonds P40,492,328 P− P− P40,492,328
Private bonds 14,581,086 − − 14,581,086
Loans and receivables
Corporate and commercial loans − − 294,494,449 294,494,449
Consumer loans − − 53,251,627 53,251,627
Trade-related loans − − 12,945,460 12,945,460
Others − − 309,048 309,048
Sales contracts receivable − − 876,406 876,406
Investment properties(b)
Land − − 6,763,387 6,763,387
Buildings and improvements − − 2,221,151 2,221,151
P55,073,414 P− P370,861,528 P425,934,942
Fair values of liabilities carried at amortized cost(a)
Deposit liabilities P− P− P534,102,368 P534,102,368
Bills payable − − 16,409,581 16,409,581
P− P− P550,511,949 P550,511,949
(a) valued as of December 31, 2016
(b) valued at various dates in 2016 and 2015
 Financial Statements 141

Parent Company
2017
Level 1 Level 2 Level 3 Total
Recurring fair value measurements(a)
Financial assets at FVPL
Held-for-trading
Government bonds P5,757,518 P119,314 P− P5,876,832
Treasury notes 1,313,369 479,252 − 1,792,621
Treasury bills 315,996 1,709,371 − 2,025,367
Private bonds 2,616,730 – − 2,616,730
Financial assets designated at FVPL 3,411,686 – − 3,411,686
Derivative assets − 333,587 − 333,587
AFS financial assets
Government bonds 22,905,417 9,467,927 − 32,373,344
Quoted private bonds 10,483,794 − − 10,483,794
Quoted equity shares 67,903 − − 67,903
P46,872,413 P12,109,451 P− P58,981,864
Financial liabilities at FVPL
Derivative liabilities P− P267,533 P− P267,533
P− P267,533 P− P267,533
Fair values of assets carried at amortized cost/cost(a)
HTM financial assets
Government bonds P48,754,016 P− P− P46,784,643
Private bonds 11,354,669 − − 13,324,042
Loans and receivables
Corporate and commercial loans − − 315,853,285 315,853,285
Consumer loans − − 41,952,821 41,952,821
Trade-related loans − − 10,417,129 10,417,129
Others − − 63,198 63,198
Sales contracts receivable − − 200,134 200,134
Investment properties(b)
Land − − 4,225,706 4,225,706
Buildings and improvements − − 970,099 970,099
P60,108,685 P− P373,682,372 P433,791,057
Fair values of liabilities carried at amortized cost
Deposit liabilities P− P− P549,154,172 P549,154,172
Bills payable − − 19,825,796 19,825,796
P− P− P568,979,968 P568,979,968
(a) valued as of December 31, 2017
(b) valued at various dates in 2017 and 2016
142 China Bank Annual Financial and Sustainability Report 2017

Parent Company
2016
Level 1 Level 2 Level 3 Total
Recurring fair value measurements(a)
Financial assets at FVPL
Held-for-trading
Government bonds P2,158,476 P82,012 P− P2,240,488
Treasury notes − 724,219 − 724,219
Treasury bills − 994,203 − 994,203
Private bonds 594,798 − − 594,798
Financial assets designated at FVPL 2,462,886 − − 2,462,886
Derivative assets − 216,288 − 216,288
AFS financial assets
Government bonds 20,561,662 − − 20,561,662
Quoted private bonds 3,809,166 6,682,562 − 10,157,258
Quoted equity shares 80,947 − − 80,947
P29,667,935 P8,699,284 P− P38,032,749
Financial liabilities at FVPL
Derivative liabilities P− P243,198 P− P243,198
P− P243,198 P− P243,198
Fair values of assets carried at amortized cost/cost(a)
HTM financial assets
Government bonds P37,832,994 P− P− P37,832,994
Private bonds 13,939,793 − − 13,939,793
Loans and receivables
Corporate and commercial loans − − 264,258,587 264,258,587
Consumer loans − − 29,357,086 29,357,086
Trade-related loans − − 11,289,013 11,289,013
Others − − 79,805 79,805
Sales contracts receivable − − 267,688 267,688
Investment properties(b)
Land − − 4,526,165 4,526,165
Buildings and improvements − − 1,074,228 1,074,228
P51,772,787 P− P310,852,572 P362,625,359
Fair values of liabilities carried at amortized cost
Deposit liabilities P− P− P462,544,056 P462,544,056
Bills payable − − 16,409,581 16,409,581
P− P− P478,953,637 P478,953,637
(a) valued as of December 31, 2016
(b) valued at various dates in 2016 and 2015

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 2017 and 2016.

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.

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.
 Financial Statements 143

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
Description 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.

144 China Bank Annual Financial and Sustainability Report 2017

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
unavoidable 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 (i.e. interest rate risk, foreign currency risk and equity price 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 gravity of the risks, the magnitude of the financial instruments involved, and regulatory requirements are primary
considerations to 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 process. 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, the development of various risk strategies and principles, control guidelines policies and procedures, implementation of risk measurement
tools, monitoring of key risk indicators, and the imposition and monitoring of risk limits and thresholds. The ROC is composed of three members
of the BOD, two of whom are independent directors.

The Risk Management Group (RMG) is the direct support of the ROC in the day-to-day risk management and the implementation of the risk
management strategies approved by the ROC. 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 risk measurement
and monitoring to make sure that the Parent Company, in its transactions and dealings, engages only in acceptable and manageable financial
risks. The RMG also ensures that risk measurements 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 and other members of the RMG report to the ROC and are a resource to the Management Committee (ManCom) on a monthly and
a weekly basis, respectively. 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 key risk indicators were formulated on the basis of the financial risks faced by the Parent Company. The key risk 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) analysis, utilization of market and credit limits and thresholds,
liquidity risk limits and ratios, overall loan loss provisioning and risk profile changes. Loan loss provisioning and credit limit utilization are,
however, discussed in more detail in the Credit Committee. On a monthly basis, detailed reporting of single-name and sectoral concentration
is included in the discussion with the ROC. On the other hand, the Chief Internal Auditor 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.
 Financial Statements 145

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 2016 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 2016 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 5, 2017, the BOD approved the inclusion of cybersecurity as part of the priority risks related to Information Technology. This is in
addition to the priority risks set in the 2009 Risk Self-assessment Survey and voting conducted among selected members of the BOD and
Senior Management which were retained on the basis that there is no significant change in either the business model of the Bank or its
ownership structure. In addition, the BOD also approved the changes in the trigger events for the review of Capital Ratios MAT and the retention
of the methodology for the CET1 ratio limit and the Management Action Trigger (MAT) on capital ratios. There were no changes made in 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 31, 2017. The
document disclosed that the Parent Company has an appropriate level of internal capital relative to the Group’s risk profile.

For the ICAAP document submitted on March 31, 2017, 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.

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, as well as industry divisions. 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.
146 China Bank Annual Financial and Sustainability Report 2017

In compliance with BSP requirements, the Group established an internal Credit Risk Rating System (CRRS) 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 CRRS covers corporate borrowers with total assets, total facilities, or total credit exposures amounting to P15.00 million
and above.

Further, the CRRS 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 Rating which provides an assessment of the proposed facilities as mitigated or enhanced by
security arrangements. The CRRS rating scale consists of ten grades, six of which fall under unclassified accounts, with the remaining four
falling under classified accounts in accordance with regulatory provisioning guidelines.

On March 5, 2014, the Parent Company approved the engagement of a third-party consultant, Moody’s Analytics, for the quantitative and
qualitative validation of the internal CRRS. The validation engagement was completed in December 2014 followed by the model recalibration,
closing the project in December 2015.

Aside from the internal CRRS, 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 2016, 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.

Furthermore, RMG also developed a Sovereign Risk Rating Model, which provided the tool for the Bank 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, 2016.

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.

The distribution of the Group’s and Parent Company’s assets and liabilities, and credit commitment items (Note 30) by geographic region as of
December 31, 2017 and 2016 (in millions) follows:

Consolidated
2017 2016
Assets Liabilities Commitment Assets Liabilities Commitment
Geographic Region
Philippines P711,801 P651,283 P58,135 P557,597 P549,944 P56,813
Asia 8,530 3,850 20,151 8,065 13,200 3,629
Europe 5,442 2,952 5,431 3,608 1,050 808
United States 499 6,616 2,794 33,336 1,240 6,287
Others 3,603 − 4 9,911 1,486 14
P729,875 P664,701 P86,515 P612,517 P566,920 P67,551

Parent Company
2017 2016
Assets Liabilities Commitment Assets Liabilities Commitment
Geographic Region
Philippines P629,802 P572,601 P187,151 P480,892 P477,297 P52,965
Asia 6,905 3,740 20,151 8,065 13,200 3,629
Europe 5,442 2,952 5,431 3,608 1,050 808
United States 405 6,616 2,794 33,242 1,240 6,287
Others 3,603 − 4 9,911 1,486 14
P646,157 P585,909 P215,531 P535,718 P494,273 P63,703
 Financial Statements 147

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
2017
Financial effect
Gross maximum of collateral or
exposure Net exposure credit enhancement
Credit risk exposure relating to on-balance sheet items
are as follows
Loans and receivables P448,970,942 P237,847,050 P211,123,892
SPURA 18,751,845 1,865 18,749,980
Sales contracts receivable 894,843 – 894,843
P468,617,630 P237,848,915 P230,768,715

Consolidated
2016
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 P386,827,300 P209,916,716 P176,779,137
SPURA 3,451,543 343 3,451,200
Sales contracts receivable 893,084 – 893,084
P391,171,927 P209,917,059 P181,123,421

Parent Company
2017
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 P386,554,498 P229,957,505 P126,596,993
SPURA 17,347,522 2,000 17,345,522
Sales contracts receivable 184,091 – 184,091
P404,086,111 P229,960,505 P144,216,606

Parent Company
2016
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 P329,069,859 P189,224,249 P139,845,609
SPURA 2,958,465 341 2,958,124
Sales contracts receivable 224,149 – 224,149
P332,252,473 P189,224,590 P143,027,882
148 China Bank Annual Financial and Sustainability Report 2017

For the Group, the fair values of collateral held for loans and receivables and sales contracts receivable amounted to P330.43 billion and
P1.34 billion, respectively, as of December 31, 2017 and P250.62 billion and P1.60 billion, respectively, as of December 31, 2016.

For the Parent Company, the fair values of collateral held for loans and receivables and sales contracts receivable amounted to
P294.54 billion and P1.04 billion, respectively, as of December 31, 2017 and P202.74 billion and P1.36 billion, respectively, as of
December 31, 2016.

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 30 to the financial statements.

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.

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 2016 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 standard credit rating equivalent grades are relevant only for
certain exposures in each risk rating class.

The following table shows the description of the internal CRRS grade:

CRRS Grade Description

1 Excellent
2 Strong
3 Good
4 Satisfactory
5 Acceptable
6 Watchlist
7 Especially Mentioned
8 Substandard
9 Doubtful
10 Loss

The credit grades are defined as follows:

Excellent - This category applies to a borrower with a very low probability of going into default in the coming year. The borrower has a high
degree of stability, substance, and diversity. It has access to raise substantial amounts of funds through the public markets at any time. The
borrower has a very strong debt service capacity and a conservative use of balance sheet leverage. The track record in profit terms is very
good. The borrower is of highest quality under virtually all economic conditions.
 Financial Statements 149

Strong - This category applies to a borrower with a low probability of going into default in the coming year. The borrower normally has a
comfortable degree of stability, substance, and diversity. Under normal market conditions, the borrower in this category has good access to
public markets to raise funds. The borrower has a strong market and financial position with a history of successful performance. The overall
debt service capacity as measured by cash flow to total debt service is deemed very strong; the critical balance sheet ratios (vis-à-vis industry)
are conservative.

Good - This category covers the smaller corporations with limited access to public capital markets or access to alternative financial markets.
This access is however limited to favorable economic and/or market conditions. Typical for this type of borrower is the combination of
comfortable asset protection and acceptable balance sheet structure (vis-à-vis industry). The debt service capacity, as measured based on
cash flows, is strong.

Satisfactory - This category represents the borrower where clear risk elements exist and the probability of default is somewhat greater. This
probability is reflected in volatility of earnings and overall performance. The borrower in this category normally has limited access to public
financial markets. The borrower should be able to withstand normal business cycles, but any prolonged unfavorable economic period would
create deterioration beyond acceptable levels. Typical for this kind of borrower is the combination of reasonably sound asset and cash flow
protection. The debt service capacity as measured by cash flow is deemed adequate. The borrower has reported profits for the past fiscal year
and is expected to report a profit in the current year.

Acceptable - The risk elements for the Parent Company are sufficiently pronounced, although the borrower should still be able to withstand
normal business cycles. Any prolonged unfavorable economic and/or market period would create an immediate deterioration beyond
acceptable levels.

Watchlist - This category represents the borrower for which unfavorable industry or company-specific risk factors represent a concern. Operating
performance and financial strength may be marginal and it is uncertain whether the borrower can attract alternative sources of financing. The
borrower will find it very hard to cope with any significant economic downturn and a default in such a case is more than a possibility. It includes
the borrower where the credit exposure is not a risk of loss at the moment, but the performance of the borrower has weakened, and unless
present trends are reversed, could lead to losses.

Especially Mentioned - This category applies to the borrower that is characterized by a reasonable probability of default, manifested by some
or all the following: (a) evidence of weakness in the borrower’s financial condition or creditworthiness; (b) unacceptable risk is generated by
potential or emerging weaknesses as far as asset protection and/or cash flow is concerned; (c) the borrower has reached a point where there
is a real risk that the borrower’s ability to pay the interest and repay the principal timely could be jeopardized; (d) the borrower is expected to
have financial difficulties and exposure may be at risk. Closer account management attention is warranted.

Concerted efforts should be made to improve lender’s position (e.g., demanding additional collateral or reduction of account exposure). These
potential weaknesses, if left uncorrected or unmitigated, would affect the repayment of the loan and, thus, increase credit risk to the Parent
Company.

Substandard - This category represents the borrower where one or more of the following factors apply: (a) the collection of principal or interest
becomes questionable regardless of scheduled payment date, by reason of adverse developments on account of a financial, managerial,
economic, or political nature, or by important weaknesses in cover; (b) the probability of default is assessed at up to 50%. Substandard
loans are loans or portions thereof which appear to involve a substantial and unreasonable degree of risk to the Parent Company because of
unfavorable record or unsatisfactory characteristics. There exists in such loans the possibility of future loss to the Parent Company unless given
closer supervision.

Doubtful - This category includes the borrower with “non-performing loan” status or with any portion of interest and/or principal payment is
in arrears for more than ninety (90) days. The borrower is unable or unwilling to service debt over an extended period of time and near future
prospects of orderly debt service is doubtful. Doubtful loans are loans or portions thereof which have the weaknesses inherent in those
classified as “Substandard”, with the added characteristics that existing facts, conditions, and values make collection or liquidation in full highly
improbable and in which substantial loss is probable.

Loss - This category represents the borrower whose prospect for re-establishment of creditworthiness and debt service is remote. It also
applies where the Parent Company will take or has taken title to the assets of the borrower and is preparing a foreclosure and/or liquidation of
the borrower’s business. These are loans or portions thereof which are considered uncollectible or worthless and of such little value that their
continuance as bankable assets is not warranted although the loans may have some recovery or salvage value.

The ratings of the borrowers covered by the BCS were mapped to the abovementioned CRRS grades in accordance with the approved
guidelines by the BOD.
150 China Bank Annual Financial and Sustainability Report 2017

The Group’s loans and receivables from customers were classified according to credit quality as follows:

Credit Quality Rating Criteria

Neither Past Due Nor Impaired
High Loans with risk rating of 1 and 2
Standard Loans with risk rating of 3 to 5
Sub-Standard Generally, loans with risk rating of 6 to 8
Past Due and Impaired
Past Due but not Impaired Those that were classified as Past Due per BSP guidelines or those that are still in
Impaired current status but have objective evidence of impairment; Generally, loans with risk
rating of 9 to 10

The table below shows the Group’s and the Parent Company’s loans and receivables, excluding other receivables (gross of allowance for
impairment and credit losses and unearned discounts) as of December 31, 2017 and 2016 (in millions) classified according to credit quality:

Consolidated
2017
Neither Past Due nor Impaired
Standard Substandard Past Due But Past Due
High Grade Grade Grade Unrated* Not Impaired and Impaired Total
Corporate and commercial
lending P56,547 P222,688 P81,679 P1,654 P2,341 P4,235 P369,144
Consumer lending 28,208 6,650 4,088 31,631 3,149 134 73,860
Trade-related lending 2,397 8,117 1,671 – 37 28 12,250
Others 18 1 3 164 27 152 365
Total P87,170 P237,456 P87,441 P33,448 P5,554 P4,549 P455,619
* Includes auto/housing loans to individuals and credit card exposures that have been subjected to application scorecards resulting in PASS or FAIL assessments instead of credit grades

Consolidated
2016
Neither Past Due nor Impaired
Standard Substandard Past Due But Past Due
High Grade Grade Grade Unrated* Not Impaired and Impaired Total
Corporate and commercial
lending P51,949 P194,211 P63,431 P2,941 P1,051 P6,150 P319,733
Consumer lending 22,997 5,989 3,308 24,388 3,155 579 60,416
Trade-related lending 2,122 9,861 961 20 6 76 13,046
Others 317 1 – 212 5 8 543
Total P77,385 P210,062 P67,700 P27,561 P4,217 P6,813 P393,738
* Includes auto/housing loans to individuals and credit card exposures that have been subjected to application scorecards resulting in PASS or FAIL assessments instead of credit grades

Parent Company
2017
Neither Past Due nor Impaired
Standard Substandard Past Due But Past Due
High Grade Grade Grade Unrated* Not Impaired and Impaired Total
Corporate and commercial
lending P27,318 P222,621 P81,297 P1,654 P1,395 P2,867 P337,152
Consumer lending 16 6,538 4,083 31,631 1,636 133 44,037
Trade-related lending 835 8,118 1,670 – 37 28 10,688
Others – 1 – 53 – – 54
Total P28,169 P237,278 P87,050 P33,338 P3,068 P3,028 P391,931
* Includes auto/housing loans to individuals and credit card exposures that have been subjected to application scorecards resulting in PASS or FAIL assessments instead of credit grades
 Financial Statements 151

Parent Company
2016
Neither Past Due nor Impaired
Standard Substandard Past Due But Past Due
High Grade Grade Grade Unrated* Not Impaired and Impaired Total
Corporate and commercial
lending P23,263 P194,185 P63,039 P2,942 P761 P3,932 P288,122
Consumer lending 10 5,968 3,308 24,388 1,157 578 35,409
Trade-related lending 453 9,861 961 20 6 76 11,377
Others – 1 – 68 – – 69
Total P23,726 P210,015 P67,308 P27,418 P1,924 P4,586 P334,977
* Includes auto/housing loans to individuals and credit card exposures that have been subjected to application scorecards resulting in PASS or FAIL assessments instead of credit grades

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.

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.
152 China Bank Annual Financial and Sustainability Report 2017

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.

The tables below show the credit quality of deposits and investments as of December 31, 2017 and 2016 (in millions), based on external risk
ratings (gross of allowance for credit losses).
Consolidated
2017
Substandard
High Grade Standard Grade Grade Total
Due from BSP P– P98,490 P– P98,490
Due from other banks 4,245 10,787 13 15,045
SPURA – 18,752 – 18,752
Financial assets at FVPL 1,194 10,013 85 11,292
AFS financial assets 8,062 28,528 1,515 38,105
HTM financial assets 320 57,917 1,416 59,653
P13,821 P224,487 P3,029 P241,337

Consolidated
2016
Substandard
High Grade Standard Grade Grade Total
Due from BSP P– P91,964 P– P91,964
Due from other banks 1,527 6,569 875 8,971
SPURA – 3,452 – 3,452
Financial assets at FVPL 36 4,622 237 4,895
AFS financial assets 10,119 13,970 1,593 25,682
HTM financial assets 318 48,513 3,056 51,887
P12,000 P169,090 P5,761 P186,851

Parent Company
2017
Substandard
High Grade Standard Grade Grade Total
Due from BSP P– P91,717 P– P91,717
Due from other banks 4,124 9,921 13 14,058
SPURA – 17,348 – 17,348
Financial assets at FVPL 1,194 9,877 85 11,156
AFS financial assets 8,062 25,672 1,485 35,219
HTM financial assets 320 55,182 1,166 56,668
P13,700 P209,717 P2,749 P226,166

Parent Company
2016
Substandard
High Grade Standard Grade Grade Total
Due from BSP P– P85,307 P– P85,307
Due from other banks 1,527 6,394 1,624 9,545
SPURA − 2,958 − 2,958
Financial assets at FVPL 36 4,151 237 4,424
AFS financial assets 10,117 11,614 1,592 23,323
HTM financial assets 319 45,177 3,056 48,552
P11,999 P155,601 P6,509 P174,109
 Financial Statements 153

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.

The tables below show the credit quality of deposits and investments, by class, as of
December 31, 2017 and 2016 (in millions), based on risk grades of a local rating agency (gross of allowance for credit losses).
Consolidated
2017
Substandard
High Grade Standard Grade Grade Total
Due from other banks P308 P– P– P308
Financial assets at FVPL 652 P– – 652
AFS financial assets 3,011 P– – 3,011
HTM financial assets 1,078 P– – 1,078
Total P5,049 P– P– P5,049

Consolidated
2016
Substandard
High Grade Standard Grade Grade Total
Due from other banks P145 P– P– P145
Financial assets at FVPL 487 P– – 487
AFS financial assets 1,470 P– – 1,470
HTM financial assets 534 P– – 534
Total P2,636 P– P– P2,636
154 China Bank Annual Financial and Sustainability Report 2017

Parent Company
2017
Substandard
High Grade Standard Grade Grade Total
Financial assets at FVPL P652 P– P– P652
AFS financial assets 2,636 – – 2,636
HTM financial assets 610 – – 610
Total P3,898 P– P– P3,898

Parent Company
2016
Substandard
High Grade Standard Grade Grade Total
Due from other banks P144 P– P– P144
Financial assets at FVPL 487 – – 487
AFS financial assets 1,435 – – 1,435
HTM financial assets 534 534
Total P2,600 P– P– P2,600

The table below shows the breakdown of unrated deposits and investments (gross of allowance for credit losses) as of December 31, 2017
and 2016 (in millions):

Consolidated Parent Company

2017 2016 2017 2016
Due from other banks P287 P2,216 P9 P–
Financial assets at FVPL 4,295 2,322 4,248 2,322
AFS financial assets 5,368 6,760 5,089 6,402
HTM financial assets 4,556 4,983 4,256 4,983
Other assets* 4,413 5,652 2,136 3,605
Total P18,919 P21,933 P15,738 P17,312
*Other assets include accounts receivables, sales contract receivable, RCOCI and miscellaneous financial assets (Note 15).
The tables below show the aging analysis of gross past due but not impaired loans and receivables that the Group and Parent Company held
as of December 31, 2017 and 2016 (in millions). Under PFRS 7, a financial asset is past due when a counterparty has failed to make a payment
when contractually due.

Consolidated
Less than More than
December 31, 2017 30 days 31 to 60 days 61 to 90 days 91 days Total
Loans and receivables
Corporate and commercial lending P919 P186 P296 P940 P2,341
Consumer lending 120 148 366 2,515 3,149
Trade-related lending 5 2 30 − 37
Others − − − 27 27
Total P1,044 P336 P692 P3,482 P5,554

Consolidated
Less than More than
December 31, 2016 30 days 31 to 60 days 61 to 90 days 91 days Total
Loans and receivables
Corporate and commercial lending P567 P70 P86 P328 P1051
Consumer lending 296 113 317 2,429 3,155
Trade-related lending − − − 6 6
Others − − − 5 5
Total P863 P183 P403 P2,768 P4,217
 Financial Statements 155

Parent Company
Less than More than
December 31, 2017 30 days 31 to 60 days 61 to 90 days 91 days Total
Loans and receivables
Corporate and commercial lending P872 P122 P211 P189 P1,394
Consumer lending 105 127 196 1,208 1,636
Trade-related lending 6 2 30 − 38
Total P983 P251 P437 P1,398 P3,068

Parent Company
Less than More than
December 31, 2016 30 days 31 to 60 days 61 to 90 days 91 days Total
Loans and receivables
Corporate and commercial lending P530 P69 P71 P91 P761
Consumer lending 213 56 204 684 1,157
Trade-related lending − − − 6 6
Total P743 P125 P275 P781 P1,924

The following table presents the carrying amount of financial assets of the Group and Parent Company as of December 31, 2017 and 2016 that
would have been considered past due or impaired if not renegotiated:

Consolidated Parent Company

2017 2016 2017 2016
Loans and advances to customers
Corporate and commercial lending P807,247 P773,888 P224,743 P358,760
Consumer lending 42,487 14,669 37,587 9,777
Total renegotiated financial assets P849,734 P788,557 P262,330 P368,537

Impairment assessment
The main considerations for the loan impairment assessment include whether any payment of principal or interest is overdue by more than 90
days, or there are known difficulties in the cash flows of counterparties, credit rating downgrades, or infringement of the original terms of the
contract. The Group addresses impairment assessment in two areas: individually assessed allowances and collectively assessed allowances.

Individually assessed allowances

The Group determines the allowances appropriate for each individually significant loan or advance on an individual basis. Items considered
when determining allowance amounts include the sustainability of the counterparty’s business plan, its ability to improve performance once a
financial difficulty has arisen, projected receipts and the expected dividend payout should bankruptcy ensue, the availability of other financial
support and the realizable value of collateral, and the timing of the expected cash flows. The impairment losses are evaluated at each reporting
date, unless unforeseen circumstances require more careful attention.

Collectively assessed allowances

Allowances are assessed collectively for losses on loans and advances that are not individually significant (including residential mortgages and
unsecured consumer lending) and for individually significant loans and advances where there is no objective evidence of individual impairment
yet. Allowances are evaluated on each reporting date with each portfolio receiving a separate review.

The collective assessment takes account of impairment that is likely to be present in the portfolio even though there is no objective evidence
of the impairment yet per an individual assessment. Impairment losses are estimated by taking into consideration the following information:
historical losses on the portfolio, current economic conditions, the approximate delay between the time a loss is likely to have been incurred and
the time it will be identified as requiring an individually assessed impairment allowance, and expected receipts and recoveries once impaired.

Management is responsible for deciding the length of this period which can extend for as long as one year. The impairment allowance is then
reviewed by credit management to ensure alignment with the Group’s overall policy.

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.
156 China Bank Annual Financial and Sustainability Report 2017

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 Bankwide VaR in certain 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.

A summary of the VaR position of the trading portfolio of the Parent Company is as follows:

Foreign
Interest Rate1 Exchange2 Equity3 Interest Rate4 Interest Rate5
(In Millions)
2017
31 December P120.05 P7.78 P45.24 P4.00 P1.76
Average daily 82.27 28.20 23.34 3.78 5.29
Highest 146.71 73.74 46.21 6.97 9.21
Lowest 37.58 2.99 3.43 1.44 1.48

2016
31 December P44.79 P24.31 P11.70 P6.17 P8.95
Average daily 52.60 7.79 18.43 3.72 1.82
Highest 109.59 29.59 53.39 10.12 9.17
Lowest 16.00 1.30 0.01 0.77 0.55

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
4
Interest rate VaR for FX swaps and FX forwards
5
Interest rate VaR for IRS
 Financial Statements 157

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 its assets and liabilities.

As of December 31, 2017 and 2016, 64.76% % and 51.89% 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 24.29% and 24.98% of total deposits of the Parent Company as of
December 31, 2017 and 2016, respectively.

Interest is paid on savings accounts and time deposits accounts, which constitute 29.72% and 45.99%, respectively, of total deposits of the
Parent Company as of December 31, 2017, and 26.06% and 48.96%, respectively, as of December 31, 2016.

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.

The Group is likewise exposed to fair value interest rate risk due to its holdings of fixed rate government bonds as part of its AFS and FVPL
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, 2017 and
2016:

Consolidated Parent Company

2017 2016 2017 2016
Peso
Assets
Due from BSP 0.13% 0.39% 0.13% 0.30%
Due from banks 0.24% 0.24% 0.19% 0.22%
Investment securities* 4.21% 4.00% 4.10% 3.95%
Loans and receivables 5.53% 5.65% 5.22% 5.34%

Liabilities
Deposit liabilities 1.15% 1.01% 1.04% 0.85%
Bills payable 2.99% 7.86% 2.99% 7.86%

USD
Assets
Due from banks 0.17% 0.11% 0.16% 0.08%
Investment securities* 3.60% 4.36% 3.61% 4.90%
Loans and receivables 3.40% 3.56% 3.40% 3.48%

Liabilities
Deposit liabilities 1.13% 1.23% 1.12% 1.24%
Bills payable 1.94% 1.94% 1.94% 1.91%
* Consisting of financial assets at FVPL, AFS financial assets and HTM financial assets.

The asset-liability 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.
158 China Bank Annual Financial and Sustainability Report 2017

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.

The following tables set forth the repricing gap position of the Group and Parent Company as of December 31, 2017 and 2016 (in millions):

Consolidated
2017
Up to 3 >3 to 12 >12
Months Months Months Total
Financial Assets
Due from BSP P98,490 P– P– P98,490
Due from other banks 15,641 – – 15,641
Investment securities 9,702 471 117,797 127,970
Loans and receivables 243,419 32,312 173,240 448,971
Total financial assets 367,252 32,783 291,037 691,072
Financial Liabilities
Deposit liabilities 256,633 14,206 364,254 635,093
Bills payable 20,118 – – 20,118
Total financial liabilities 276,751 14,206 364,254 655,211
Repricing gap P90,501 P18,577 (P73,217) P35,861

Consolidated
2016
Up to 3 >3 to 12 >12
Months Months Months Total
Financial Assets
Due from BSP P91,964 P– P– P91,964
Due from other banks 11,332 – – 11,332
Investment securities 11,216 77 87,689 98,982
Loans and receivables 195,911 38,156 152,760 386,827
Total financial assets 310,423 38,233 240,449 589,105
Financial Liabilities
Deposit liabilities 236,806 15,099 289,678 541,583
Bills payable 13,685 2,718 552 16,955
Total financial liabilities 250,491 17,817 290,230 558,538
Repricing gap P59,932 P20,416 (P49,781) P30,567

Parent Company
2017
Up to 3 >3 to 12 >12
Months Months Months Total
Financial Assets
Due from BSP P91,717 P– P– P91,717
Due from other banks 14,067 – – 14,067
Investment securities 7,364 466 112,697 120,527
Loans and receivables 218,899 23,005 144,651 386,555
Total financial assets 332,047 23,471 257,348 612,866
Financial Liabilities
Deposit liabilities 215,735 12,112 331,389 559,236
Bills payable 20,118 – – 20,118
Total financial liabilities 235,853 12,112 331,389 579,354
Repricing gap P96,194 P11,359 (P74,042) P33,512
 Financial Statements 159

Parent Company
2016
Up to 3 >3 to 12 >12
Months Months Months Total
Financial Assets
Due from BSP P85,307 P– P– P85,307
Due from other banks 9,689 – – 9,689
Investment securities 9,678 – 82,778 92,456
Loans and receivables 179,102 26,169 123,799 329,070
Total financial assets 283,776 26,169 206,577 516,522
Financial Liabilities
Deposit liabilities 199,467 12,083 259,412 470,962
Bills payable 13,685 2,718 552 16,955
Total financial liabilities 213,152 14,801 259,964 487,917
Repricing gap P70,624 P11,368 (P53,387) P28,605

The Group also 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.

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, 2017 and 2016:

Consolidated
2017
Change in interest rates (in basis points)
100bp rise 50bp rise 50bp fall 100bp fall
Change in annualized net interest income P1,046 P523 (P523) (P1,046)
As a percentage of the Group’s net interest income for
the year ended December 31, 2017 5.33% 2.66% (2.66%) (5.33%)

Consolidated
2016
Change in interest rates (in basis points)
100bp rise 50bp rise 50bp fall 100bp fall
Change in annualized net interest income P752 P376 (P376) (P752)
As a percentage of the Group’s net interest income for
the year ended December 31, 2016 4.50% 2.25% (2.25%) (4.50%)

Parent Company
2017
Change in interest rates (in basis points)
100bp rise 50bp rise 50bp fall 100bp fall
Change in annualized net interest income P1,049 P525 (P525) (P1,049)
As a percentage of the Parent Company’s net interest
income for the year ended December 31, 2017 6.46% 3.23% (3.23%) (6.46%)

Parent Company
2016
Change in interest rates (in basis points)
100bp rise 50bp rise 50bp fall 100bp fall
Change in annualized net interest income P791 P396 (P396) (P791)
As a percentage of the Parent Company’s net interest
income for the year ended December 31, 2016 5.75% 2.88% (2.88%) (5.75%)
160 China Bank Annual Financial and Sustainability Report 2017

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 AFS financial assets, brought about by
movement in the interest rate curve as of December 31, 2017 and 2016 (in millions):

Consolidated
2017
Change in interest rates (in basis points)
25bp rise 10bp rise 10bp fall 25bp fall
Change in income before tax (P146) (P58) P58 P146
Change in equity (637) (255) 255 637

Consolidated
2016
Change in interest rates (in basis points)
25bp rise 10bp rise 10bp fall 25bp fall
Change in income before tax (P47) (P19) P19 P47
Change in equity (377) (151) 151 377

Parent Company
2017
Change in interest rates (in basis points)
25bp rise 10bp rise 10bp fall 25bp fall
Change in income before tax (P145) (P58) P58 P145
Change in equity (600) (240) 240 600

Parent Company
2016
Change in interest rates (in basis points)
25bp rise 10bp rise 10bp fall 25bp fall
Change in income before tax (P40) (P16) P16 P40
Change in equity (339) (136) 136 339

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.

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.
 Financial Statements 161

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:

Consolidated
2017 2016
Other Other
USD Currencies Total PHP USD Currencies Total PHP
Assets
Cash and other cash items $2,447 $3,173 $5,620 P1,101,805 $15,366 $2,781 $18,147 P896,335
Due from other banks 64,664 15,524 80,188 12,250,862 141,279 8,623 150,352 7,422,444
Financial assets at FVPL 60,427 − 60,427 11,237,326 95,587 7 95,594 4,752,967
AFS financial assets 71,057 6,324 77,381 24,952,423 460,901 − 460,901 22,859,924
HTM financial assets 31,952 9,791 41,743 36,580,224 702,957 8,560 711,517 35,252,391
Loans and receivables 30,809 7,385 38,194 41,199,173 658,657 913 659,570 32,771,104
Accrued interest receivable 992 133 1,125 1,151,126 18,691 55 18,746 929,765
Other assets 24,851 2 24,853 1,770,016 38,175 7 38,182 1,898,142
287,199 42,332 329,531 130,242,955 2,132,064 20,941 2,153,011 106,783,072
Liabilities
Deposit liabilities 59,445 36,388 95,833 108,853,092 $1,631,011 $18,875 $1,649,886 81,835,829
Bills payables 128,720 132,510 261,230 20,118,031 341,865 − 341,865 16,997,522
Accrued interest and other
expenses 512 7 519 242,686 2,897 2 2,899 143,929

Other liabilities 11,317 877 12,194 2,007,057 60,462 840 61,302 2,981,638
199,994 169,782 369,776 131,220,866 2,036,235 19,717 2,055,952 101,958,918
Currency spot (8,054) − (8,054) (402,136) (3,027) 51 (2,976) (148,562)
Currency forwards (59,709) 136,301 76,591 3,526,925 (59,371) 10,790 (48,581) (2,414,102)
Net Exposure $19,442 $8,851 $28,292 P2,146,878 $32,980 $12,070 $45,050 P2,261,490

Parent Company
2017 2016
Other Other
USD Currencies Total PHP USD Currencies Total PHP
Assets
Cash and other cash items $250 $3,173 $3,423 P992,120 $13,224 $2,781 $16,005 P795,534
Due from other banks 56,536 15,524 72,060 11,845,037 121,834 8,62 130,457 6,486,192
Financial assets at FVPL 59,729 − 59,729 11,202,500 95,587 7 95,594 4,752,967
AFS financial assets 49,997 6,324 56,321 23,900,888 439,821 − 439,821 21,867,906
HTM financial assets − 9,791 9,791 34,984,879 670,955 8,560 679,515 33,746,382
Loans and receivables 23,323 7,385 30,708 40,825,401 650,077 913 650,990 32,367,332
Accrued interest receivable 96 133 229 1,106,380 17,827 55 17,882 889,109
Other assets 24,790 2 24,792 1,766,967 38,098 7 38,105 1,894,483
214,721 42,332 257,053 126,624,172 2,047,423 20,946 2,068,370 102,799,905
Liabilities
Deposit liabilities 501 36,388 36,889 105,910,018 1,557,612 18,875 1,576,487 78,381,671
Bills payables 128,720 132,510 261,230 20,118,031 341,865 − 341,865 16,997,522
Accrued interest and other
expenses 418 7 425 238,020 2,825 2 2,827 140,518
Other liabilities 9,050 877 9,927 1,893,891 54,153 840 54,993 2,684,710
138,689 169,782 308,471 128,159,960 1,956,455 19,717 1,976,172 98,204,421
Currency spot (8,054) − (8,054) (402,136) (3,027) 51 (2,976) (148,562)
Currency forwards (59,709) 136,301 76,591 3,526,925 (59,371) 10,790 (48,581) (2,414,102)
Net Exposure $8,269 $8,851 $17,119 P1,589,001 $28,570 $12,070 $40,640 P2,032,020
162 China Bank Annual Financial and Sustainability Report 2017

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
2017
USD 2% 134 595
Other 1% 3 3
USD (2%) (134) (595)
Other (1%) (3) (3)

2016
USD 2% 54 164
Other 1% − −
USD (2%) (54) (164)
Other (1%) − −

Parent Company
Change in
Foreign Sensitivity of Sensitivity of
Exchange Rate Pretax Income Equity
2017
USD 2% 133 573
Other 1% 3 3
USD (2%) (133) (573)
Other (1%) (3) (3)

2016
USD 2% 51 143
Other 1% − −
USD (2%) (51) (143)
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 AFS 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
2017 +10% 10.5
-10% 4.1
2016 +10% 19.8
-10% 12.1
 Financial Statements 163

Parent Company
Change in Effect on
equity index Equity
2017 +10% 10.5
-10% 4.1
2016 +10% 19.8
-10% 12.1

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.

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, 2017

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 P11,160 P– P– P– P– P11,160
Due from BSP 91,717 – – – – 91,717
Due from other banks 14,067 – – – – 14,067
SPURA – 17,348 – – – 17,348
Financial assets at FVPL – 2,673 844 760 14,001 18,278
AFS financial assets – 8,360 4,802 4,786 35,082 53,030
Loans and receivables – 149,393 23,651 25,443 268,251 466,738
106,944 177,774 29,297 30,989 317,334 672,338
Financial Liabilities
Deposit liabilities
Demand 138,930 – – – – 138,930
Savings 179,593 – – – – 179,593
Time – 235,825 799 5,012 348 241,984
Bills payable – 20,177 – – – 20,177
Manager’s checks – 1,709 – – – 1,709
Accrued interest and other expenses – 1,062 – – – 1,062
Derivative liabilities – 268 – – – 268
Other liabilities:
Accounts payable – 1,828 – – – 1,828
Acceptances payable – 470 – – – 470
Due to PDIC – 532 – – – 532
Margin deposits – 3 – – – 3
Other credits - dormant – 214 – – – 214
Due to the Treasurer of the Philippines – 34 – – – 34
Miscellaneous – 510 – – – 510
Total liabilities 318,523 262,632 799 5,012 348 587,314
Net Position (P211,580) (P84,858) P28,498 P25,977 P317,398 P85,186
164 China Bank Annual Financial and Sustainability Report 2017

December 31, 2016

Less than 1 to 2 years
On demand 1 year 2 to 3 years 3 to 5 years Total
Financial Assets
Cash and other cash items P10,581 P− P− P− P− P10,581
Due from BSP 85,307 − − − − 85,307
Due from other banks 9,689 − − − − 9,689
SPURA − 2,958 − − − 2,958
Financial assets at FVPL − 583 326 1,484 5,400 7,793
AFS financial assets − 12,192 1,676 3,705 19,709 37,282
Loans and receivables − 141,925 17,948 21,115 195,228 376,216
105,577 157,658 19,950 26,304 220,337 529,826
Financial Liabilities
Deposit liabilities
Demand 122,266 − − − − 122,266
Savings 132,772 − − − − 132,772
Time − 211,755 3,440 724 962 216,881
Bills payable − 9,236 7,813 − − 17,049
Manager’s checks − 1,446 − − − 1,446
Accrued interest and other expenses − 578 − − − 758
Derivative liabilities − 243 − − 243
Other liabilities: − − − −
Accounts payable − 1,731 − − − 1,731
Acceptances payable − 1,172 − − − 1,172
Due to PDIC − 428 − − − 428
Margin deposits − 2 − − − 2
Other credits - dormant − 304 − − − 304
Due to the Treasurer of the Philippines − 24 − − − 24
Miscellaneous − 429 − − − 289
Total liabilities 255,038 227,348 11,253 724 962 495,325
Net Position (P149,461) (P69,690) P8,697 P25,580 P219,375 P34,501

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 funds providers have been set to determine
sufficiency of liquid assets over deposit liabilities. In 2016, the Bank started submitting quarterly Liquidity Coverage Ratio as prescribed by
the BSP for a 2 year observation period. Liquidity is managed by the Parent and subsidiaries on a daily basis, while scenario stress tests are
conducted periodically.

7. DUE FROM BSP AND OTHER BANKS

Due from BSP

This account consists of:

Consolidated Parent Company

2017 2016 2017 2016
Demand deposit account P95,790,000 P84,480,394 P89,017,023 P78,773,027
Special deposit account 2,700,000 7,450,000 2,700,000 6,500,000
Others 14 34,101 14 34,101
P98,490,014 P91,964,495 P91,717,037 P85,307,128
 Financial Statements 165

Due from Other Banks

This comprises of deposit accounts with:

Consolidated Parent Company

2017 2016 2017 2016
Local banks P6,600,456 P6,296,727 P6,479,014 P4,747,467
Foreign banks 9,041,020 5,035,509 7,587,605 4,941,698
P15,641,476 P11,332,236 14,066,620 P9,689,165

Interest Income on Due from BSP and Other Banks

This account consists of:

Consolidated Parent Company

2017 2016 2015 2017 2016 2015
Due from BSP P213,879 P266,204 P209,395 P112,851 P246,888 P161,994
Due from other banks 138,850 221,843 95,399 50,296 115,528 20,657
P352,729 P488,047 P304,794 P163,147 P362,416 P182,651

8. 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 2017, 2016 and 2015, the interest rates of SPURA equals to 3.50%, 2.90%, and range from 0.01% to 2.20%, respectively, for the Group
and Parent Company.

9. TRADING AND INVESTMENT SECURITIES

Financial Assets at FVPL

This account consists of:
Consolidated Parent Company
2017 2016 2017 2016
Held for trading
Government bonds (Note 28) P5,911,659 P2,404,049 P5,876,832 P2,240,488
Treasury notes 1,893,192 1,031,675 1,792,621 724,219
Treasury bills 2,025,367 994,203 2,025,367 994,203
Private bonds 2,663,397 594,798 2,616,730 594,798
12,493,615 5,024,725 12,311,550 4,553,708
Financial assets designated at FVPL 3,411,686 2,462,886 3,411,686 2,462,886
Derivative assets (Note 25) 333,587 216,288 333,587 216,288
Total P16,238,888 P7,703,899 P16,056,823 P7,232,882

Financial assets designated at FVPL of the Parent Company consist of investments in shares of stocks which contain multiple embedded
derivatives which are deemed not clearly and closely related to its equity host. In this regard, PAS 39 provides that if a contract contains one or
more embedded derivatives, an entity may designate the entire hybrid contract at FVPL unless the embedded derivative does not significantly
modify the cash flows that otherwise would be required by the contract, or it is clear with little or no analysis when a similar hybrid instrument
is first considered that separation of the embedded derivative is prohibited. On this basis, management has determined that the investments
shall be designated as at FVPL.

Dividends earned by the Parent Company from its investment in shares designated at FVPL amounted to P82.83 million, P182.13 million, and
P247.10 million in 2017, 2016 and 2015, respectively (Note 21).

As of December 31, 2017 and 2016, HFT securities include fair value loss of P65.56 million and P63.97 million, respectively, for the Group, and
fair value loss of P69.22 million and P51.06 million, respectively, for the Parent Company.
166 China Bank Annual Financial and Sustainability Report 2017

Effective interest rates for peso-denominated financial assets at FVPL for both the Group and the Parent Company range from 0.64% to 5.49%
in 2017, 2.08% to 6.88% in 2016 and from 1.63% to 13.75% in 2015. Effective interest rates for foreign currency-denominated financial assets
at FVPL for the Group range from 2.29% to 10.16% in 2017, 0.99% to 7.24% in 2016, and from 1.37% to 10.63% in 2015. Effective interest
ra tes for foreign currency-denominated financial assets at FVPL for the Parent Company range from 2.29% to 10.16% in 2017, from 0.99% to
6.80% in 2016, and from 2.50% to 10.63% in 2015.

AFS Financial Assets

This account consists of:

Consolidated Parent Company

2017 2016 2017 2016
Quoted
Government bonds (Notes 18 and 28) P35,229,504 P22,337,592 P32,373,344 P20,561,662
Private bonds 11,090,438 11,417,612 10,483,794 10,491,728
Equities 67,903 80,947 67,903 80,947
46,387,845 33,836,150 42,925,041 31,134,337
Unquoted
Equities - net * 57,546 37,572 12,042 19,413
57,546 37,572 12,042 19,413
Total P46,445,391 P33,873,722 P42,937,083 P31,153,750
* Includes fully impaired equity investments with acquisition cost of P 38.83 million for the Group and P 6.32 million for the Parent Company as of December 31,
2017 and 2016 (Note 16).

Unquoted equity securities

This account comprises of shares of stocks of various unlisted private corporations.

Net unrealized gains (losses)

AFS financial assets include fair value losses of P1.81 billion for the Group and Parent Company as of December 31, 2017, and fair value
losses of P1.60 billion for the Group and Parent Company as of December 31, 2016. The fair value gains or losses are recognized under OCI.
Impairment loss on AFS financial assets of the Group, which was charged to operations, amounted to P0.06 million in 2015. No impairment
loss was recognized in 2017 and 2016.

Effective interest rates for peso-denominated AFS financial assets for the Group range from 2.95% to 8.92% in 2017, 1.34% to 7.00% in 2016,
and from 2.14% to 7.25% in 2015. Effective interest rates for peso-denominated AFS financial assets for the Parent Company range from
2.95% to 8.92% in 2017, 2.08% to 7.00% in 2016, and from 2.14% to 7.25% in 2015.

Effective interest rates for foreign currency-denominated AFS financial assets for both the Group and Parent Company range from 0.99% to
5.75% in 2017, 0.37% to 7.45% in 2016, and from 1.50% to 7.45% in 2015.

HTM Financial Assets

This account consists of:

Consolidated Parent Company

2017 2016 2017 2016
Government bonds (Note 18) P46,718,014 P38,610,521 P44,032,555 P36,243,699
Private bonds 11,465,164 12,180,159 10,697,164 11,530,159
58,183,178 50,790,680 54,729,719 47,773,858
Unamortized premium - net 7,103,089 6,614,120 6,803,774 6,295,163
P65,286,267 P57,404,800 P61,533,493 P54,069,021

Effective interest rates for peso-denominated HTM financial assets for the Group range from 2.82% to 7.75% in 2017, 2.05% to 6.63% in 2016,
and from 1.35% to 9.13% in 2015. Effective interest rates for foreign currency-denominated HTM financial assets range from 0.21% to 8.50%
in 2017, 0.21% to 8.93% in 2016, and from 2.26% to 10.72% in 2015.
 Financial Statements 167

Effective interest rates for peso-denominated HTM financial assets of the Parent Company range from 2.82% to 5.53% in 2017, 2.82% to
5.25% in 2016 and from 4.13% to 9.13% in 2015. Effective interest rates for foreign currency-denominated HTM financial assets range from
0.21% to 8.50% in 2017, 0.21% to 8.93% in 2016, and from 2.26% to 10.72% in 2015.

Reclassification of Financial Assets

2016 Reclassification
The Group transferred certain securities from AFS financial assets to HTM financial assets on various dates in November 2016 (reclassification
dates). The decision to effect this transfer was reached by balancing the need to reduce the market risk sensitivity of the balance sheet
without reducing the portfolio of liquid assets.

Details of reclassified financial assets follow:

Consolidated
2017
Carrying Fair Unamortized
Value at Carrying Value at Net Unrealized
Reclassification Value as of Reclassification Loss Deferred
Face Value Date December 31 Date in Equity Amortization
(in original currency)
Philippine peso denominated
government bonds P10,106,378 P11,636,529 P10,977,243 P11,039,842 (P544,126) P52,561
US dollar denominated
government bonds USD103,371 135,851 126,762 129,074 (6,372) 405

Consolidated
2016
Carrying Fair Unamortized
Value at Carrying Value at Net Unrealized
Reclassification Value as of Reclassification Loss Deferred
Face Value Date December 31 Date in Equity Amortization
(in original currency)
Philippine peso denominated
government bonds P10,106,378 P11,636,529 P11,032,214 P11,039,842 (P591,635) P5,052
US dollar denominated
government bonds USD103,371 135,851 128,776 129,074 (6,731) 46

Parent
2017
Carrying Fair Unamortized
Value at Carrying Value at Net Unrealized
Reclassification Value as of Reclassification Loss Deferred
Face Value Date December 31 Date in Equity Amortization
(in original currency)
Philippine peso denominated
government bonds P9,856,378 P11,350,542 P10,704,207 P10,765,719 (P533,349) P51,474
US dollar denominated
government bonds USD96,871 126,204 118,144 120,350 (5,556) 298

Parent
2016
Carrying Fair Unamortized
Value Carrying Value at Net Unrealized
at Reclassification Value as of Reclassification Loss Deferred
Face Value Date December 31 Date in Equity Amortization
(in original currency)
Philippine peso denominated
government bonds P9,856,378 P11,350,542 P10,758,190 P10,765,719 (P579,859) P4,964
US dollar denominated
government bonds USD96,871 126,204 120,063 120,350 (5,812) 42
168 China Bank Annual Financial and Sustainability Report 2017

Had these securities not been transferred to HTM, additional fair value gain on Philippine peso denominated government bonds that would
have been charged against the statement of comprehensive income amounted to P14.92 million and P7.86 million in 2017, and P172.13 million
and P167.44 million in 2016, for the Group and the Parent Company, respectively. Additional fair value gain of USD2.85 million (P142.30 million)
and USD2.67 million (P133.31 million) for the Group and Parent Company, respectively, in 2017, and fair values losses of USD8.21 million
(P408.20 million) and USD7.11 million (P353.51 million) for the Group and Parent Company, in 2016 would have been charged against to the
statement of comprehensive income on US dollar denominated government bonds.

The effective interest rates on Philippine peso denominated government bond at reclassification dates range from 4.05% to 5.07% for both
the Group and Parent Company . The effective interest rates for US dollar denominated bonds range from 2.82% to 4.17% at the time of their
reclassification for both the Group and Parent Company. The Group and Parent Company expect to recover 100% of the principal and the
interest due on these transferred assets. These securities are also unimpaired as of December 31, 2017.

The unrealized losses deferred under ‘Net unrealized gains (losses) on AFS Financial Assets’ at reclassification date amounted to
P584.82 million and USD5.85 million for Philippine peso denominated and US dollar denominated government bonds, respectively.

2008 Reclassification
In 2008, as approved by its BOD, the Parent Company identified assets for which it had a clear change of intent to hold the investments to
maturity rather than to exit or trade these investments in the foreseeable future and reclassified those investments from AFS financial assets to
HTM financial assets effective October 2, 2008.

As of October 2, 2008, the total carrying value of AFS financial assets reclassified to HTM financial assets amounted to P9.04 billion, with
unrealized losses of P47.44 million deferred under ‘Net unrealized gains (losses) on AFS financial assets’. HTM financial assets reclassified from
AFS financial assets with total face amount of P798.13 million and P1.57 billion matured in 2017 and 2016, respectively.

As of December 31, 2017 and 2016, HTM financial assets reclassified from AFS financial assets consist of government bonds which have the
following balances:

Fair Unamortized
Carrying Value at Net Unrealized
Original Value as of reclassification Loss Deferred
Face Value* Cost December 31 date in Equity Amortization
2017 P491,811 P592,315 P509,646 P531,918 (P4,427) P24,016
2016 1,284,516 1,553,572 1,311,014 1,367,155 (8,127) 6,496
*Consist of US dollar-denominated bonds with face value of $9.85 million and $25.84 million as of December 31, 2017 and 2016, respectively.

Had these securities not been reclassified to HTM financial assets, additional fair value gain that would have been credited to the statement
of comprehensive income amounted to P22.27 million, P395.74 million, and P324.67 million in 2017, 2016 and 2015, respectively. Effective
interest rate on the reclassified securities is 6.21%. The Parent Company expects to recover 100.00% of the principal and interest due on the
reclassified investments. No impairment loss was recognized on these securities in 2017, 2016 and 2015.

Interest Income on Trading and Investment Securities

This account consists of:

Consolidated Parent Company

2017 2016 2015 2017 2016 2015
Financial assets at FVPL P410,889 P204,882 P262,027 P398,777 P179,406 P232,464
AFS financial assets 1,309,755 1,538,173 1,840,978 1,176,831 1,439,037 1,785,184
HTM financial assets 2,246,355 1,539,908 997,797 2,098,194 1,441,882 929,266
P3,966,999 P3,282,963 P3,100,802 P3,673,802 P3,060,325 P2,946,914
 Financial Statements 169

10. LOANS AND RECEIVABLES

This account consists of:

Consolidated Parent Company

2017 2016 2017 2016
Loans and discounts
Corporate and commercial lending P369,145,536 P319,733,478 P337,153,332 P288,122,032
Consumer lending 73,858,213 60,416,106 44,035,292 35,409,327
Trade-related lending 12,249,287 13,045,531 10,688,002 11,376,697
Others* 364,975 543,021 54,551 68,870
455,618,011 393,738,136 391,931,177 334,976,926
Unearned discounts (307,886) (255,841) (267,099) (198,042)
455,310,125 393,482,295 391,664,078 334,778,884
Allowance for impairment and credit losses (Note 16) (6,339,183) (6,654,995) (5,109,580) (5,709,025)
P448,970,942 P386,827,300 P386,554,498 P329,069,859
*Others include employee loans and foreign bills purchased.

The Group’s and Parent Company’s loans and discounts under corporate and commercial lending include unquoted debt securities
with carrying amount of P1.10 billion and P1.00 billion as of December 31, 2017, respectively, and P4.08 billion and P3.98 billion as of
December 31, 2016, respectively.

BSP Reporting
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

2017 2016 2017 2016
Amounts % Amounts % Amounts % Amounts %
Loans secured by
Real estate P71,900,048 15.78 P55,840,410 14.18 P44,232,910 11.29 P33,443,459 9.98
Chattel mortgage 30,900,443 6.78 29,496,094 7.49 18,831,553 4.80 19,713,062 5.88
Deposit hold out 3,980,670 0.87 3,806,062 0.97 2,893,239 0.74 2,251,423 0.67
Shares of stock of
other banks 5,060,000 1.11 2,710,000 0.69 5,060,000 1.29 2,710,000 0.81
Guarantee by the Republic
of the Philippines 7,082,500 1.55 8,487,000 2.16 7,082,500 1.81 8,487,000 2.53
Others 80,947,148 17.77 76,814,028 19.49 78,703,585 20.08 73,171,797 21.86
199,870,809 43.87 177,153,594 44.98 156,803,787 40.01 139,776,741 41.73
Unsecured loans 255,747,202 56.13 216,584,543 55.02 235,127,390 59.99 195,200,185 58.27
P455,618,011 100.00 P393,738,136 100.00 P391,931,177 100.00 P334,976,926 100.00

Information on the concentration of credit as to industry of the Group and Parent Company follows:

Consolidated
2017 2016
Amounts % Amounts %
Real estate, renting and business services P113,424,302 24.89 P97,201,490 24.69
Wholesale and retail trade 53,818,092 11.81 57,498,702 14.60
Electricity, gas and water 53,514,587 11.75 40,385,429 10.26
Financial intermediaries 52,341,750 11.49 40,750,252 10.35
Transportation, storage and communication 40,464,073 8.88 33,885,852 8.61
Manufacturing 29,583,222 6.49 27,602,087 7.01
Arts, entertainment and recreation 13,959,186 3.06 7,511,725 1.91
(Forward)
170 China Bank Annual Financial and Sustainability Report 2017

Consolidated
2017 2016
Amounts % Amounts %
Accommodation and food service activities P12,260,862 2.69 P8,227,872 2.09
Construction 8,732,720 1.92 10,167,766 2.58
Public administration and defense 6,232,000 1.37 7,544,000 1.92
Agriculture 6,051,546 1.33 5,782,267 1.47
Professional, scientific and technical activities 4,079,383 0.90 5,760,184 1.46
Education 3,869,247 0.85 3,819,309 0.97
Mining and quarrying 887,231 0.19 1,419,481 0.36
Others* 56,399,810 12.38 46,181,720 11.73
P455,618,011 100.00 P393,738,136 100.00
*Others consist of administrative and support service, health, household and other activities.

Parent Company
2017 2016
Amounts % Amounts %
Real estate, renting and business services P91,809,744 23.42 P76,873,563 22.95
Electricity, gas and water 52,050,493 13.28 40,103,651 11.97
Financial intermediaries 49,950,420 12.74 37,826,049 11.29
Wholesale and retail trade 46,238,179 11.80 49,143,056 14.67
Transportation, storage and communication 38,376,551 9.79 31,858,356 9.51
Manufacturing 25,622,331 6.54 23,465,857 7.01
Arts, entertainment and recreation 13,895,619 3.55 7,470,098 2.23
Accommodation and food service activities 10,285,048 2.62 6,511,668 1.94
Construction 7,349,908 1.88 8,829,298 2.64
Public administration and defense 6,232,000 1.59 7,544,000 2.25
Professional, scientific and technical activities 3,760,091 0.96 5,318,354 1.59
Agriculture 4,442,522 1.13 3,762,789 1.12
Education 2,845,294 0.73 2,807,735 0.84
Mining and quarrying 884,686 0.23 1,257,731 0.38
Others* 38,188,291 9.74 32,204,721 9.61
P391,931,177 100.00 P334,976,926 100.00
*Others consist of administrative and support service, health, household and other activities.

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, 2017 and 2016, the Parent Company does not have credit concentration in any particular industry.

As of December 31, 2017 and 2016, secured and unsecured non-performing loans (NPLs) of the Group and the Parent Company follow:

Consolidated Parent Company

2017 2016 2017 2016
Secured P3,164,209 P3,038,413 P687,318 P1,086,882
Unsecured 3,237,418 4,274,659 2,235,931 2,642,103
P6,401,627 P7,313,072 P2,923,249 P3,728,985

Generally, NPLs refer to loans whose principal and/or interest is unpaid for thirty (30) days or more after due date or after they have become
past due in accordance with existing BSP rules and regulations. This shall apply to loans payable in lump sum and loans payable in quarterly,
semi-annual, or annual installments, in which case, the total outstanding balance thereof shall be considered nonperforming.

In the case of loans that are payable in monthly installments, the total outstanding balance thereof shall be considered nonperforming when
three (3) or more installments are in arrears.
 Financial Statements 171

In the case of loans that are payable in daily, weekly, or semi-monthly installments, the total outstanding balance thereof shall be considered
nonperforming at the same time that they become past due in accordance with existing BSP regulations, i.e., the entire outstanding balance of
the receivable shall be considered as past due when the total amount of arrearages reaches twenty percent (20.00%) of the total loan balance.

Loans are classified as nonperforming in accordance with BSP regulations, or when, in the opinion of management, collection of interest
or principal is doubtful. Loans are not reclassified as performing until interest and principal payments are brought current or the loans are
restructured in accordance with existing BSP regulations, and future payments appear assured.

Loans which do not meet the requirements to be treated as performing loans shall also be considered as NPLs. Gross and net NPLs of the
Parent Company as reported to BSP amounted to P2.92 billion and P0.98 billion, respectively, in 2017 and P3.73 billion and P1.42 billion,
respectively, in 2016. Gross and net NPL ratios of the Parent Company are 0.76% and 0.25%, respectively, in 2017 and 1.12% and 0.43%,
respectively, in 2016.

Interest Income on Loans and Receivables

This account consists of:

Consolidated Parent Company

2017 2016 2015 2017 2016 2015

Receivables from customers P21,663,571 P17,812,793 P15,813,206 P17,455,018 P14,055,123 P12,257,457

Unquoted debt securities 88,076 76,459 87,521 81,999 67,164 67,502
P21,751,647 P17,889,252 P15,900,727 P17,537,017 P14,122,287 P12,324,959

As of December 31, 2017 and 2016, 65.01% and 52.53%, respectively, of the total receivables from customers of the Group were subject to
interest repricing. As of December 31, 2017 and 2016, 67.67% and 53.29%, 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 2.08% to 10.50% in 2017,
from 1.00% to 11.00% in 2016, and from 1.82% to 8.00% in 2015 for foreign currency-denominated receivables and from 0.95% to 30.00%
in 2017, and from 1.00% to 30.00% in 2016 and 2015 for peso-denominated receivables.

11. EQUITY INVESTMENTS

This account consists of investments in:

A. Subsidiaries
2017 2016
Equity Method:
Balance at beginning of the year
CBSI P11,047,530 P8,486,452
CBCC 732,541 300,000
CBC Forex Corporation – 50,000
CBC-PCCI 22,853 12,805
CIBI 366,113 291,922
12,169,037 9,141,179
Share in net income
CBSI 514,396 153,260
CBCC 276,161 231,514
CBC-PCCI 5,851 8,915
CIBI 39,596 71,310
836,004 464,999
Share in Other Comprehensive Income
Items that recycle to profit or loss in subsequent periods:
Net unrealized gain (loss) on AFS
CBSI 24,765 (119,626)
CBCC 1,926 1,027
CIBI (4,196) (2,211)
22,495 (120,811)
(Forward)
172 China Bank Annual Financial and Sustainability Report 2017

2017 2016
Cumulative translation adjustments
CBSI P13,058 P26,575
13,058 26,575
Items that do not recycle to profit or loss in subsequent periods:
Remeasurement gain on defined benefit assets
CBSI 18,964 9,001
CBCC 2,272 –
CBC-PCCI (798) 1,134
CIBI (298) 5,091
20,140 15,226
Surplus Reserves
CBSI – (8,584)
– (8,584)
Additional Investments
CBSI – 2,500,452
CBCC 500,000 200,000
500,000 2,700,452
Divestments
CBC Forex Corporation – (50,000)
– (50,000)
Balance at end of the year
CBSI 11,618,713 11,047,530
CBCC 1,512,899 732,541
CBC-PCCI 27,905 22,853
CIBI 401,215 366,113
P13,560,733 P12,169,037

B. Associates:

2017 2016
Equity Method:
Balance at beginning of the year P276,559 P371,399
Share in net income (loss) 73,133 (89,384)
Share in OCI:
Items that do not recycle to profit or loss in subsequent periods
Remeasurement loss on life insurance reserves (12,221) –
Items that recycle to profit or loss in subsequent periods:
Net unrealized loss on AFS (8,050) (5,456)
Balance at end of the year P329,422 P276,559

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 infusions to CBSI in 2016 amounting to P1.50 billion and P1.00 billion were approved by the Parent Company’s
Executive Committee on December 1, 2016 and September 21, 2016, respectively.

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. The terms of the Plan of Merger of CBSI with PDB were approved by CBSI and PDB’s stockholders owning at least 2/3 of
each corporation’s outstanding common stocks in separate meetings held on August 14, 2014. The Plan of Merger permits the issuance of
1.23 PDB common shares for every CBSI common share.

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.
 Financial Statements 173

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.

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, 2016, 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

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 and 2015, respectively.

On January 19, 2017, the BOD of CBCC approved the increase in authorized capital stock of CBCC from P500.00 million to P2.00 billion to
enable CBCC to handle bigger 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).
174 China Bank Annual Financial and Sustainability Report 2017

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.

The initial purchase price for the acquisition of ATC was set at P21,767,997.50, payable as follows:

a. 10% – on signing date of the Agreement (June 29, 2016)

b. 70% of the purchase price – on closing date (March 6, 2017)
c. 10% of the purchase price – upon receipt of Certificates Authorizing Registration and Tax Clearance Certificates
d. 10% of the purchase price – one year from the closing date (March 6, 2018), subject to any deduction for certain losses

On February 22, 2017, the Philippine Stock Exchange approved ATC’s application for change in controlling interest through CBCC’s acquisition
of 100% of the issued and outstanding shares of ATC.

In view of the prolonged period since the Agreement was signed and the resulting change in the financial position, prospects, and other
circumstances of ATC and its Original Shareholders, the parties agreed to negotiate an adjustment to the purchase price that is mutually
acceptable to CBCC and the Original Shareholders.

On March 6, 2017, CBCC and the Original Shareholders agreed to fix the final purchase price of the acquisition at P26,704,341, and the
Original Shareholders executed deeds of absolute sale of their respective shares in ATC in favor of CBCC. By virtue of this transaction, CBCC
assumed ownership and control of ATC.

On March 6, 2017, CBCC and ATC entered into a Subscription Agreement, whereby CBCC subscribed to 7,200,000 common shares of ATC
at a price of P10.00 per share or a total subscription price of P72.00 million.

The fair values of identifiable assets and liabilities arising from the acquisition as of March 6, 2017 are as follows:

Assets
Cash and cash equivalents P9,196,017
Accounts receivable 348,024
Computer software (net) 559,375
Office equipment (net) 149,264
Trading rights 8,500,000
Prepaid expenses 1,755,945
Condominium 12,063,309
Other assets 3,004,295
Total Assets 35,576,228
Liabilities
Accounts payable 406,250
Payable to customer 2,256,733
Payable to clearing house 61,519
Other liabilities 56,820
Total Liabilities 2,781,321
Net Book Value P32,794,907

The acquisition by CBCC of ATC Securities, Inc. resulted in recognition of gain on bargain purchase which is determined as follows:

Cost of acquisition P26,704,341

Less net assets recognized 32,794,907
Gain on bargain purchase P6,090,566

The gain from a bargain purchase identified as the excess of the fair value of the net assets of ATC Securities, Inc. over the cost of acquisition
is mainly attributable to the mutually agreed price that accounts for intention of the Original Shareholders to ultimately retire from the business,
prevention of further outlay of funds from the Original Shareholders to ensure compliance with regulatory capital requirements and their relative
ability to divest of the said shares in an expeditious manner.

Gain on bargain purchase is included under ‘Miscellaneous income’ in the consolidated statements of income (Note 21).
 Financial Statements 175

Cash flow on acquisition follows:

Cash and cash equivalents acquired from ATC Securities, Inc. P9,196,017
Cash paid 24,033,906
Net Cash Outflow P14,837,889

From the date of acquisition, CBCSec’s operating income and net income included in the consolidated statement of comprehensive income
amounted to P6.37 million. If the acquisition had taken place at the beginning of the year, the Group’s total operating income and net income
would have increased by P5.69 million.

On July 6, 2017, the SEC approved the change of name from ATC Securities, Inc. to China Bank Securities Corporation.

On August 23, 2017, CBCC subscribed to the remaining 4,000,000 unissued common shares of CBCSec at a price of P10.00 per share or a
total subscription price of P40.00 million, to provide CBCSec with sufficient capital buffer as its transition and ramps up its operations as the
equities brokerage house of the Group.

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.

CBC Forex Corporation

On May 5, 2009, the BOD approved to dissolve the operations of CBC Forex by shortening its corporate life until December 31, 2009.
On December 28, 2015, the Parent Company obtained the approval from the SEC of its Certificate of Filing of Amended Articles of
Incorporation (Amending the Article IV by shortening the term of its existence, thereby dissolving the Corporation) dated November 6, 2015.
On December 19, 2016, the Parent Company’s investment with CBC Forex Corporation amounting P50.00 million was liquidated.

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) which is carried at nil
amount as of December 31, 2017 and 2016.

The following tables show the summarized financial information of MCB Life:

2017 2016
Total assets P31,656,389 P26,419,046
Total liabilities 30,834,456 25,727,647
Equity 821,933 691,398

2017 2016
Revenues P6,268,406 P7,663,417
Benefits, claims and operating expenses 6,066,765 7,860,618
Income (loss) before income tax 201,641 (197,201)
Net income (loss) 182,833 (223,460)
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 1.75 million common shares.

Commission income earned by the Parent Company from its bancassurance agreement with MCB Life amounting to P360.01 million,
P383.48 million and P337.41 million in 2017, 2016 and 2015, respectively, is included under ‘Miscellaneous income’ in the statements of
income (Note 21).
176 China Bank Annual Financial and Sustainability Report 2017

12. BANK PREMISES, FURNITURE, FIXTURES AND EQUIPMENT

The composition of and movements in this account follow:

Consolidated
Furniture,
Land Fixtures and Leasehold Construction- 2017
(Note 23) Equipment Buildings Improvements in-Progress Total
Cost
Balance at beginning of year P3,345,404 P7,163,737 P1,893,525 P1,482,415 P86,405 P13,971,486
Additions − 988,658 73,800 679,305 10,410 1,752,173
Disposals/transfers* − (258,867) (25,583) (306,155) (35,326) (625,931)
Balance at end of year 3,345,404 7,893,528 1,941,742 1,855,565 61,489 15,097,728
Accumulated Depreciation
and Amortization
Balance at beginning of year − 5,562,502 1,013,296 897,049 − 7,472,847
Depreciation and amortization − 674,334 74,625 183,435 − 932,394
Disposals/transfers* − (157,787) 15,729 (42,467) − (184,525)
Balance at end of year − 6,079,049 1,103,650 1,038,017 − 8,220,716
Allowance for Impairment Losses
(Note 16)
Balance at beginning of year − − 2,371 − − 2,371
Reclassification − − (1,223) − − (1,223)
Balance at end of year − − 1,148 − − 1,148
Net Book Value at End of Year P3,345,404 P1,814,479 P836,944 P817,548 P61,489 P6,875,864
*Includes transfers from investment properties amounting to P10.82 million.

Consolidated
Furniture,
Land Fixtures and Leasehold Construction- 2016
(Note 23) Equipment Buildings Improvements in-Progress Total
Cost
Balance at beginning of year P3,347,222 P6,601,919 P1,832,834 P1,338,260 P90,873 P13,211,108
Additions − 809,311 99,911 215,122 11,307 1,135,651
Disposals/transfers* (1,818) (247,493) (39,220) (70,967) (15,775) (375,273)
Balance at end of year 3,345,404 7,163,737 1,893,525 1,482,415 86,405 13,971,486
Accumulated Depreciation
and Amortization
Balance at beginning of year − 5,097,654 895,859 861,406 − 6,854,919
Depreciation and amortization − 624,690 114,196 103,330 − 842,216
Disposals/transfers* − (159,842) 3,241 (67,687) − (224,288)
Balance at end of year − 5,562,502 1,013,296 897,049 − 7,472,847
Allowance for Impairment Losses
(Note 16) − −
Balance at beginning of year − − 2,070 − − 2,070
Reclassification − − 301 − − 301
Balance at end of year − − 2,371 − − 2,371
Net Book Value at End of Year P3,345,404 P1,601,235 P877,858 P585,366 P86,405 P6,496,268
*Includes transfers from investment properties amounting to P4.69 million
 Financial Statements 177

Parent Company
Furniture,
Land Fixtures and Leasehold Construction- 2017
(Note 23) Equipment Buildings Improvements in-Progress Total
Cost
Balance at beginning of year P2,786,310 P6,082,009 P1,077,608 P1,093,494 P80,139 P11,119,560
Additions − 786,776 40,422 550,076 10,410 1,387,684
Disposals/transfers* − (200,484) (32,362) (291,701) (29,063) (553,610)
Balance at end of year 2,786,310 6,668,301 1,085,668 1,351,869 61,486 11,953,634
Accumulated Depreciation
and Amortization
Balance at beginning of year − 4,775,377 517,491 682,711 − 5,975,579
Depreciation and amortization − 537,338 26,456 115,273 − 679,067
Disposals/transfers* − (123,299) (72) (42,223) − (165,594)
Balance at end of year − 5,189,416 543,875 755,761 − 6,489,052
Net Book Value at End of Year P2,786,310 P1,478,885 P541,793 P596,108 P61,486 P5,464,582
*Includes transfers from investment properties amounting to P10.82 million.

Parent Company
Furniture,
Land Fixtures and Leasehold Construction- 2016
(Note 23) Equipment Buildings Improvements in-Progress Total
Cost
Balance at beginning of year P2,786,350 P5,612,477 P1,027,236 P999,819 P88,054 P10,513,936
Additions − 675,734 89,359 169,256 7,701 942,050
Disposals/transfers* (40) (206,202) (38,987) (75,581) (15,616) (336,426)
Balance at end of year 2,786,310 6,082,009 1,077,608 1,093,494 80,139 11,119,560
Accumulated Depreciation
and Amortization
Balance at beginning of year − 4,386,057 462,552 668,125 − 5,516,734
Depreciation and amortization − 482,832 27,819 85,160 − 595,811
Disposals/transfers* − (93,512) 27,120 (70,574) − (136,966)
Balance at end of year − 4,775,377 517,491 682,711 − 5,975,579
Net Book Value at End of Year P2,786,310 P1,306,632 P560,117 P410,783 P80,141 P5,143,981
*Includes transfers from investment properties amounting to P4.69 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 23) in 2011.

As of December 31, 2017 and 2016, the gross carrying amount of fully depreciated furniture, fixtures and equipment still in use amounted to
P2.89 billion for the Group and P2.31 billion for the Parent Company.

Gain on sale of furniture, fixtures and equipment amounting to P2.11 million, P2.97 million and P0.89 million in 2017, 2016 and 2015, respectively,
for the Group and P1.69 million, P2.17 million and P0.50 million in 2017, 2016 and 2015, respectively, for the Parent Company are included in
the statements of income under ‘Miscellaneous income’ account (Note 21).

In 2015, depreciation and amortization amounting to P822.76 million and P580.06 million for the Group and Parent Company, respectively, are
included in the statements of income under ‘Depreciation and amortization’ account.
178 China Bank Annual Financial and Sustainability Report 2017

13. INVESTMENT PROPERTIES

The composition of and movements in this account follow:

Consolidated
Buildings and 2017
Land Improvements Total
Cost
Balance at beginning of year P4,730,076 P2,788,397 P7,518,473
Additions 299,806 279,283 579,089
Disposals/write-off/transfers* (424,821) (421,131) (845,952)
Balance at end of year 4,605,061 2,646,549 7,251,610
Accumulated Depreciation and Amortization
Balance at beginning of year – 755,763 755,763
Depreciation and amortization – 191,338 191,338
Disposals/write-off/transfers* – (205,030) (205,030)
Balance at end of year – 742,071 742,071
Allowance for Impairment Losses (Note 16)
Balance at beginning of year 1,028,013 384,958 1,412,971
Disposals/write-off/reclassification* – 24,412 24,412
Balance at end of year 1,028,013 409,370 1,437,383
Net Book Value at End of Year P3,577,048 P1,495,108 P5,072,156
*Includes transfers to bank premises amounting to P10.82 million (Note 12).

Consolidated
Buildings and 2016
Land Improvements Total
Cost
Balance at beginning of year P4,810,128 P2,588,845 P7,398,973
Additions 363,175 421,240 784,415
Disposals/write-off/transfers* (443,227) (221,688) (664,915)
Balance at end of year 4,730,076 2,788,397 7,518,473
Accumulated Depreciation and Amortization
Balance at beginning of year − 713,023 713,023
Depreciation and amortization − 173,007 173,007
Disposals/write-off/transfers* − (130,267) (130,267)
Balance at end of year − 755,763 755,763
Allowance for Impairment Losses (Note 16)
Balance at beginning of year 1,023,837 263,974 1,287,811
Reversal during the year − (797) (797)
Disposals/write-off/reclassification* 4,176 121,781 125,957
Balance at end of year 1,028,013 384,958 1,412,971
Net Book Value at End of Year P3,702,063 P1,647,676 P5,349,739
*Includes transfers to bank premises amounting to P4.69 million (Note 12).
 Financial Statements 179

Parent Company
Buildings and 2017
Land Improvements Total
Cost
Balance at beginning of year P2,019,065 P1,511,349 P3,530,414
Additions 40,573 86,079 126,652
Disposals/write-off/transfers* (200,283) (199,760) (400,043)
Balance at end of year 1,859,355 1,397,668 3,257,023
Accumulated Depreciation and Amortization
Balance at beginning of year – 563,120 563,120
Depreciation and amortization – 104,638 104,638
Disposals/write-off/transfers* – (167,656) (167,656)
Balance at end of year – 500,102 500,102
Allowance for Impairment Losses (Note 16)
Balance at beginning and end of year 1,004,729 201,689 1,206,418
Net Book Value at End of Year P854,626 P695,877 P1,550,503
*Includes transfers to bank premises amounting to P10.82 million (Note 12).

Parent Company
Buildings and 2016
Land Improvements Total
Cost
Balance at beginning of year P2,176,474 P1,520,017 P3,696,491
Additions 164,833 132,011 296,844
Disposals/write-off/transfers* (322,242) (140,679) (462,921)
Balance at end of year 2,019,065 1,511,349 3,530,414
Accumulated Depreciation and Amortization
Balance at beginning of year – 590,211 590,211
Depreciation and amortization – 98,915 98,915
Disposals/write-off/transfers* – (126,006) (126,006)
Balance at end of year – 563,120 563,120
Allowance for Impairment Losses (Note 16)
Balance at beginning and end of year 1,004,729 201,689 1,206,418
Net Book Value at End of Year P1,014,336 P746,540 P1,760,876
*Includes transfers to bank premises amounting to P4.69 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 2015, depreciation and amortization amounting to P142.28 million and P81.85 million for the Group and Parent Company, respectively, are
included in the statements of income under ‘Depreciation and amortization’ account.

Details of rental income earned and direct operating expenses incurred on investment properties follow:

Consolidated
2017 2016 2015
Rent income on investment properties P32,499 P20,190 P31,100
Direct operating expenses on investment properties
generating rent income 924 4,767 2,392
Direct operating expenses on investment properties not
generating rent income 52,029 67,619 52,429
180 China Bank Annual Financial and Sustainability Report 2017

Parent Company
2017 2016 2015
Rent income on investment properties P8,250 P39,734 P7,020
Direct operating expenses on investment properties
generating rent income 799 886 1,069
Direct operating expenses on investment properties not
generating rent income 33,405 44,089 35,270

Rent income earned from leasing out investment properties is included under ‘Miscellaneous income’ in the statements of income (Note 21).

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, 2017 and 2016, amount of goodwill per CGU follows:
Consolidated Parent Company
RBB P222,841 P222,841
CBSI 616,907 –
Total P839,748 P222,841

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. The significant assumptions, and the
most sensitive, used in computing for the recoverable values of the CGUs follow:
RBB CBSI
Growth rates
Loans 9.84% 16.90%
Deposits 13.56% 16.40%
Discount rate 6.41% 7.83%
Terminal value growth rate 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, 2017 and 2016.

Branch Licenses
Branch licenses of the Group arose from the acquisitions of CBSI, Unity Bank, and PDB. As of December 31, 2017 and 2016, details of branch
licenses in the Group’s and Parent Company’s financial statements follow:
Consolidated Parent Company
2017 2016 2017 2016
Branch license from CBSI acquisition P420,600 P477,600 P398,000 P455,000
Branch license from Unity Bank acquisition 347,400 347,400 – –
Branch license from PDB acquisition (Note 11) 2,839,500 2,839,500 – –
Total P3,607,500 P3,664,500 P398,000 P455,000
 Financial Statements 181

The individual branches have been identified as the CGU for impairment testing of the branch licenses. The recoverable amounts of the CGUs
for impairment testing of the branch licenses have been determined based on the higher between fair value less cost to sell and value-in-use
calculations.

FVLCD is based on special licensing fee of BSP on branches operating on identified restricted areas. Value-in-use calculation uses 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. The significant
assumptions used in computing for the recoverable values of the CGUs follow:

Growth rates
Loans 10.00%
Deposits 10.00%
Discount rate 6.41%
Terminal value growth rate 1.00%

The calculation of the value-in-use of the CGU is most sensitive to the following assumptions:

• Discount rates
• Terminal value growth rate used to extrapolate cash flows beyond the budget period

With regard to the assessment of value-in-use of the CGU, the Parent Company recognized an impairment loss related to certain unrestricted
branch licenses from the acquisition of CBSI amounting to P57.00 million as of December 31, 2017.

Capitalized software costs

The movements in the account follow:

Consolidated Parent Company

2017 2016 2017 2016
Cost
Balance at beginning of year P549,156 P322,186 P445,444 P322,186
Additions 165,074 226,970 145,814 123,258
Balance at end of year 714,230 549,156 591,258 445,444
Accumulated Depreciation and Amortization
Balance at beginning of year 123,940 143,777 94,861 14,378
Depreciation and amortization 93,757 109,563 93,535 80,484
Balance at end of year 217,697 123,940 188,396 94,862
Net Book Value at End of Year P496,533 P425,216 P402,862 P350,582

15. OTHER ASSETS

This account consists of:

Consolidated Parent Company

2017 2016 2017 2016
Financial assets
Accounts receivable P2,884,628 P4,153,356 P1,686,205 P3,120,990
SCR 979,046 953,734 208,496 254,485
RCOCI 179,935 107,193 83,636 92,651
Others 369,034 437,919 157,380 136,374
4,412,643 5,652,202 2,135,717 3,604,500

(Forward)
182 China Bank Annual Financial and Sustainability Report 2017

Consolidated Parent Company

2017 2016 2017 2016
Nonfinancial assets
Net plan assets (Note 24) P995,050 P754,754 P991,386 P754,754
Prepaid expenses 124,526 155,016 114,121 146,036
Creditable withholding taxes 378,143 266,599 321,231 211,159
Security deposit 231,838 194,043 205,400 175,224
Documentary stamps 309,642 244,272 182,778 164,057
Sundry debits 235,136 84,824 71,552 62,736
Miscellaneous 298,882 263,371 – –
2,573,217 1,962,879 1,886,468 1,513,966
6,985,860 7,615,081 4,022,185 5,118,466
Allowance for impairment and credit losses (Note 16) (766,965) (718,434) (540,960) (614,366)
P6,218,895 P6,896,647 P3,481,225 P4,504,100

Accounts receivable
As of December 31, 2016, about 41.92% of the Group’s accounts receivable represents final withholding taxes (FWT) imposed by the Bureau
of Internal Revenue (BIR) and withheld by the Bureau of Treasury (BTr) from the proceeds collected by the Group upon maturity of the Poverty
Eradication and Alleviation Certificates (PEACe) bonds on October 18, 2011.

On October 17, 2011, the Parent Company together with seven other banks filed a joint petition against the BIR’s decision to impose 20.00%
FWT on PEACe bonds. The Supreme Court (SC) issued a temporary restraining order in favor of these banks on the same day and ordered
these banks to place in escrow an amount equivalent to the disputed withholding tax until final decision is rendered. However, the BTr withheld
the 20.00% FWT from the proceeds of the PEACe bonds and held it in an escrow account with the Land Bank of the Philippines.

On January 13, 2015, the SC ordered the BTr to release to the investor banks the amount corresponding to the 20.00% final withholding
tax.  On March 13, 2015, the BIR filed a motion for reconsideration and clarification.  Pursuant to a resolution dated April 21, 2015 by the SC,
the banks filed a consolidated comment on the motions filed by the respondents.  

In an en banc ruling received on October 5, 2016, the SC upheld its October 2011 decision ordering the BTr to return the P4.97 billion to the
petitioners and for the BTr to pay legal interest for failure to comply with the SC’s earlier ruling in favor of the holders of the said bonds. In late
October 2016, the Government filed a motion for partial reconsideration with regard to the October 2016 ruling.

In an en banc ruling received on January 17, 2017, the SC denied the motion for partial reconsideration.  No further pleadings or motions shall
be entertained by the SC.

On April 11, 2017, the BTr paid the Parent Company together with the seven banks the withheld amount and 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’ (Note 21).

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 2017 and 2016 ranging from 5.00% to 10.25% and 5.00% and 12.25%, respectively.

Miscellaneous
Miscellaneous consists mainly of unissued stationery and supplies, inter-office float items, and deposits for various services.
 Financial Statements 183

16. ALLOWANCE FOR IMPAIRMENT AND CREDIT LOSSES

Changes in the allowance for impairment and credit losses are as follows:

Consolidated Parent Company

2017 2016 2017 2016
Balances at beginning of year
Loans and receivables P6,654,995 P6,994,670 P5,709,025 P6,151,786
Investment properties 1,412,971 1,287,811 1,206,418 1,206,418
Accrued interest receivable 179,339 69,331 62,019 68,342
AFS financial assets 38,742 38,742 6,323 6,323
Bank premises, furniture, fixtures and equipment 2,371 2,070 – –
Intangible assets – – – –
Other assets 718,434 741,589 614,366 626,103
9,006,852 9,134,213 7,598,151 8,058,972
Provisions charged to operations 754,171 850,546 423,922 521,475
Accounts charged off and others (1,012,065) (977,907) (1,100,523) (982,296)
(257,894) (127,361) (676,601) (460,821)
Balances at end of year
Loans and receivables (Note 10) 6,339,183 6,654,995 5,109,580 5,709,025
Investment properties (Note 13) 1,437,383 1,412,971 1,206,418 1,206,418
Accrued interest receivable 165,452 179,339 58,269 62,019
AFS financial assets (Note 9) 38,827 38,742 6,323 6,323
Bank premises, furniture, fixtures and equipment
(Note 12) 1,148 2,371 – –
Other assets (Note 15) 766,965 718,434 540,960 614,366
P8,748,958 P9,006,852 P6,921,550 P7,598,151

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.

A reconciliation of the allowance for credit losses on loans and receivables from customers, AFS financial assets and accrued interest
receivable follows:

Consolidated
2017
AFS Financial
Loans and Receivables Assets
Corporate and Unquoted Accrued
Commercial Consumer Trade-related Equity Interest
Lending Lending Lending Others Total Securities Receivable
Balance at beginning of year P4,593,387 P1,631,460 P277,623 P152,525 P6,654,995 P38,742 P179,339
Provisions during the year 224,815 453,404 158 – 678,377 – 37,821
Transfers/others (897,841) (5,000) (91,205) (143) (994,189) 85 (51,708)
Balance at end of year P3,920,361 P2,079,864 P186,576 P152,382 P6,339,183 P38,827 P165,452
Individual impairment 950,102 925,165 54,429 151,836 2,081,532 38,827 165,452
Collective impairment 2,970,259 1,154,699 132,147 546 4,257,651 – –
P3,920,361 P2,079,864 P186,576 P152,382 P6,339,183 P38,827 P165,452
184 China Bank Annual Financial and Sustainability Report 2017

Consolidated
2016
AFS Financial
Loans and Receivables Assets
Corporate and Unquoted Accrued
Commercial Consumer Trade-related Equity Interest
Lending Lending Lending Others Total Securities Receivable
Balance at beginning of year P5,289,222 P1,313,023 P390,326 P2,099 P6,994,670 P38,742 P69,331
Provisions (recoveries) 311,242 410,941 (258) 689 722,614 - 43,174
during the year
Transfers/others (1,007,077) (92504) (112,445) 149,737 (1,062,289) (4,464) 66,834
Balance at end of year P4,593,387 P1,631,460 P277,623 P152,525 P6,654,995 P34,278 P179,339
Individual impairment 1,462,699 729,796 145,476 151,836 2,489,807 38,302 179,339
Collective impairment 3,130,688 901,664 132,147 689 4,165,188 - -
P4,593,387 P1,631,460 P277,623 P152,525 P6,654,995 P38,302 P179,339

Parent Company
2017
AFS Financial
Loans and Receivables Assets
Corporate and Unquoted Accrued
Commercial Consumer Trade-related Equity Interest
Lending Lending Lending Others Total Securities Receivable
Balance at beginning of year P4,381,126 P1,061,364 P265,846 P689 P5,709,025 P6,323 P62,019
Provisions during the year 138,503 252,010 158 – 390,671 – 141
Transfers/others (898,767) – (91,206) (143) (990,116) – (3,891)
Balance at end of year P3,620,862 P1,313,374 P174,798 P546 P5,109,580 P6,323 P58,269
Individual impairment 728,378 925,165 46,061 – 1,699,604 6,323 58,269
Collective impairment 2,892,484 388,209 128,737 546 3,409,976 – –
P3,620,862 P1,313,374 P174,798 P546 P5,109,580 P6,323 P58,269

Parent Company
2016
AFS Financial
Loans and Receivables Assets
Corporate and Unquoted Accrued
Commercial Consumer Trade-related Equity Interest
Lending Lending Lending Others Total Securities Receivable
Balance at beginning of year P5,053,830 P707,616 P390,327 P14 P6,151,786 P6,323 P68,342
Provisions (recoveries) during the year 266,007 230,000 (258) 689 496,437 - (27)
Transfers/others (938,711) 123,749 (124,222) (14) (939,198) - (6,296)
Balance at end of year P4,381,126 P1,061,365 P265,847 P689 P5,709,025 P6,323 P62,019
Individual impairment 1,292,911 729,796 137,109 - 2,159,816 6,323 62,019
Collective impairment 3,088,214 331,569 128,737 689 3,549,209 - -
P4,381,125 P1,061,365 P265,846 P689 P5,709,025 P6,323 P62,019

The following tables present the reconciliation of the movement of the allowance for impairment and credit losses on other assets:

Consolidated
Accounts 2017
Receivable SCR Miscellaneous Total
Balance at beginning of year P436,751 P60,650 P221,033 P718,434
Provisions (recoveries) during the year 33,175 – 4,798 37,973
Transfers/others (Note 10) (75,426) 250 85,734 10,558
Balance at end of year P394,500 P60,900 P311,565 P766,965
 Financial Statements 185

Consolidated
Accounts 2016
Receivable SCR Miscellaneous Total
Balance at beginning of year P521,705 P54,787 P165,097 P741,589
Provisions during the year 49,453 75 36,027 85,555
Transfers/others (Note 10) (134,407) 5,788 19,909 (108,710)
Balance at end of year P436,751 P60,650 P221,033 P718,434

Parent Company
Accounts 2017
Receivable SCR Miscellaneous Total
Balance at beginning of year P396,592 P30,336 P187,438 P614,366
Provisions (recoveries) during the year 33,175 – (65) 33,110
Transfers/others (Note 10) (98,904) (5,932) (1,680) (106,516)
Balance at end of year P330,863 P24,404 P185,693 P540,960

Parent Company
Accounts 2016
Receivable SCR Miscellaneous Total
Balance at beginning of year P444,444 P25,809 P155,850 P626,103
Provisions (recoveries) during the year 24,986 – 79 25,065
Transfers/others (Note 10) (72,838) 4,527 31,509 (36,802)
Balance at end of year P396,592 P30,336 P187,438 P614,366

17. DEPOSIT LIABILITIES

As of December 31, 2017 and 2016, 36.13% and 39.42% respectively, of the total deposit liabilities of the Group are subject to periodic interest
repricing. The remaining deposit liabilities bear annual fixed interest rates ranging from 0.13% to 3.65% in 2017, 0.13% to 3.25% in 2016,
0.13% to 2.75% in 2015.

Interest Expense on Deposit Liabilities

This account consists of:

Consolidated Parent Company

2017 2016 2015 2017 2016 2015
Demand P233,984 P197,595 P165,228 P163,524 P143,917 P122,277
Savings 1,120,422 819,991 743,365 1,072,849 567,447 490,603
Time 5,167,529 3,813,969 3,099,695 3,974,430 2,917,763 2,268,286
P6,521,935 P4,831,555 P4,008,288 P5,210,803 P3,629,127 P2,881,166

BSP Circular No. 830 requires reserves against deposit liabilities. As of December 31, 2017 and 2016, due from BSP amounting to
P95.90 billion and P84.52, respectively, for the Group and P89.17 billion and P78.78 billion, respectively, for the Parent Company were set
aside as reserves for deposit liabilities per latest report submitted to the BSP. As of December 31, 2017 and 2016, the Group is in compliance
with such regulation.

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.
186 China Bank Annual Financial and Sustainability Report 2017

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.

The LTNCDs are included under the ‘Time deposit liabilities’ account.

18. BILLS PAYABLE

Bills Payable
The Group’s and the Parent Company’s bills payable consist of:

Consolidated Parent Company

2017 2016 2017 2016

Interbank loans payable P16,378,274 P16,954,998 P16,378,274 P16,954,998

Trade finance 3,739,757 − 3,739,757 −
P20,118,031 P16,954,998 P20,118,031 P16,954,998

Interbank loans payable

Interbank loans payable consists of short-term dollar-denominated borrowings of the Parent Company with annual interest ranging from 0.12%
to 2.28% and from 1.25% to 1.68% in 2017 and 2016, respectively.

As of December 31, 2017, the carrying amount of foreign currency-denominated HTM and AFS financial assets pledged by the Parent
Company as collateral for its interbank borrowings amounted to P3.43 billion and P3.72 billion, respectively. The carrying amount of peso-
denominated HTM, AFS and HFT financial assets pledged by the Parent Company as collateral for its interbank borrowings amounted
to P10.25 billion, P0.10 billion and P0.49 billion, respectively. The fair value of HTM financial assets pledged as collateral amounted to
P13.24 billion as of December 31, 2017 (Note 9).

As of December 31, 2016, the carrying amount of foreign currency-denominated HTM and AFS financial assets pledged by the Parent Company
as collateral for its interbank borrowings amounted to P8.96 billion and P0.53 billion, respectively. The fair value of HTM financial assets pledged
as collateral amounted to P8.41 billion as of December 31, 2016 (Note 9).

As of December 31, 2017 and 2016, margin deposits amounting to P497.26 million and P74.68, respectively, are deposited with various
counterparties to meet the collateral requirements for its interbank bills payable.

As of December 31, 2016, interbank loans payable includes a US$158.00 million unsecured, three-year term loan facility from regional and
international banks which will mature in June 2018. The facility carries an interest margin of 1.40% per annum over 3-month LIBOR. The
term of the loan provides for a financial covenant such that the Parent Company shall ensure that its minimum capital adequacy ratio (CAR)
will, at all times, be equal to or greater of (a) the percentage prescribed by BSP from time to time and (b) 10.00%. Otherwise, the loan shall
become immediately due and payable. The borrowing was measured initially at fair value and was subsequently carried at amortized cost. As
of December 31, 2016, the carrying value of the loan amounted to P7.81 billion.

The Parent Company paid one year ahead the US$158.00 million borrowing. The strong growth in foreign currency deposits and favorable
changes in market conditions enabled the Parent Company to raise the balance earlier than expected. The loan was paid in two tranches:
US$60.00 million was paid in March 2017 and the remaining balance in June 2017.

Trade finance
As of December 31, 2017, 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.

19. ACCRUED INTEREST AND OTHER EXPENSES

This account consists of:

Consolidated Parent Company
2017 2016 2017 2016
Accrued payable for employee benefits P963,774 P789,691 P956,348 P786,014
Accrued interest payable 813,068 552,881 707,342 464,741
Accrued lease payable 166,246 121,139 162,875 119,950
Accrued taxes and other licenses 116,158 87,156 96,153 77,837
Accrued other expenses payable 568,373 317,323 361,230 112,809
P2,627,619 P1,868,190 P2,283,948 P1,561,351
 Financial Statements 187

20. OTHER LIABILITIES

This account consists of:

Consolidated Parent Company

2017 2016 2017 2016
Financial liabilities
Accounts payable P3,131,826 P2,801,269 P1,827,956 P1,731,365
Due to PDIC 531,645 428,308 531,645 428,308
Acceptances payable 469,518 1,172,158 469,518 1,172,158
Other credits-dormant 281,008 318,701 213,681 304,036
Due to the Treasurer of the Philippines 43,174 28,131 33,950 23,716
Margin deposits 3,004 1,702 3,004 1,702
Miscellaneous (Note 23) 938,901 488,139 430,041 428,532
5,399,076 5,238,408 3,509,795 4,089,817
Nonfinancial liabilities
Withholding taxes payable 202,174 150,814 155,320 115,928
Retirement liabilities (Note 24) 119,451 144,686 – –
321,625 295,500 155,320 115,928
P5,720,701 P5,533,908 P3,665,115 P4,205,745

Accounts payable includes payables to suppliers and service providers, and loan payments and other charges received from customers in
advance.

Miscellaneous mainly includes sundry credits, inter-office float items, and dormant deposit accounts.

21. OTHER OPERATING INCOME AND MISCELLANEOUS EXPENSES

Service Charges, Fees and Commissions

Details of this account are as follows:

Consolidated Parent Company

2017 2016 2015 2017 2016 2015
Service and collection charges:
Deposits P540,323 P597,294 P628,191 P539,941 P535,397 P572,448
Remittances 311,768 302,184 248,615 311,768 302,184 248,615
Loans 276,054 214,237 170,070 34,758 40,301 34,785
Others 112,725 114,791 169,744 99,116 93,452 90,019
1,240,870 1,228,506 1,216,620 985,583 971,334 945,867
Fees and commissions 1,200,854 894,963 617,698 409,415 348,114 510,273
P2,441,724 P2,123,469 P1,834,318 P1,394,998 P1,319,448 P1,456,140

Trading and Securities Gain - Net

This account consists of:

Consolidated Parent Company

2017 2016 2015 2017 2016 2015
AFS financial assets P363,350 P918,673 P638,723 P340,351 P856,031 P629,642
Financial assets designated at
FVPL (Note 9) 170,352 111,615 (120,134) 170,352 111,615 (120,134)
Held-for-trading (Note 9) (55,257) (135,709) (50,330) (112,458) (138,286) (48,087)
Derivative assets (Note 25) (3,510) 23,510 (1,425) (3,510) 23,510 (1,425)
HTM financial assets 5,025 – – 5,025 – –
P479,960 P918,089 P466,834 399,760 P852,870 P459,996
188 China Bank Annual Financial and Sustainability Report 2017

Miscellaneous Income
Details of this account are as follows:

Consolidated Parent Company

2017 2016 2015 2017 2016 2015
Bancassurance (Note 11) P360,009 P383,483 P337,521 P360,009 P383,483 P337,407
Dividends (Note 9) 91,073 193,229 263,330 91,073 193,229 255,407
Rental on bank premises 111,651 91,591 51,731 83,911 67,134 39,516
Fund transfer fees 59,682 50,658 56,621 59,682 50,658 56,621
Rental safety deposit boxes 24,933 24,627 23,139 24,825 24,269 22,768
Recovery of charged off assets 199,014 18,734 15,620 184,272 10,523 7,943
Miscellaneous income
(Notes 12, 13 and 15) 670,161 116,123 218,893 587,885 70,801 172,291
P1,516,523 P878,445 P966,855 P1,391,657 P800,097 P891,953

Miscellaneous Expenses
Details of this account are as follows:

Consolidated Parent Company

2017 2016 2015 2017 2016 2015
Information technology P402,314 P108,458 P371,949 P339,214 P227,627 P280,973
Service charges 219,430 225,889 181,216 219,430 225,889 181,216
Litigations 176,602 117,363 100,947 22,815 43,261 26,486
Freight 38,909 34,331 25,534 27,953 27,354 21,338
Membership fees and dues 18,642 29,329 17,012 17,160 28,135 14,861
Clearing and processing fee 21,252 27,379 14,337 16,320 24,525 11,591
Broker’s fee 39,129 12,403 22,970 39,128 12,403 22,970
Miscellaneous expense 951,274 518,834 267,969 808,638 352,295 241,307
P1,867,552 P1,073,986 P1,001,934 P1,490,658 P941,489 P800,742

22. 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, 2017 and 2016 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
2017 2016
Within Over Within Over
Twelve Months Twelve Months Total Twelve Months Twelve Months Total
Financial assets
Cash and other cash items P12,685,984 P– P12,685,984 P12,010,543 P– P12,010,543
Due from BSP 98,490,014 – 98,490,014 91,964,495 – 91,964,495
Due from other banks 15,641,476 – 15,641,476 11,332,236 – 11,332,236
SPURA 18,751,845 – 18,751,845 3,451,543 – 3,451,543
Financial assets at FVPL 12,730,270 3,508,618 16,238,888 7,703,899 – 7,703,899
AFS financial assets - gross 7,389,865 39,094,353 46,484,218 11,849,322 22,063,143 33,912,465
HTM financial assets 628,196 64,658,071 65,286,267 2,112,503 55,292,297 57,404,800
Loans and receivables - gross 163,581,848 292,036,163 455,618,011 150,962,924 242,775,212 393,738,136
Accrued interest receivable - gross 3,883,957 – 3,883,957 3,193,868 – 3,193,868
Other assets - gross 3,188,970 1,223,673 4,412,643 4,698,468 953,734 5,652,202
336,972,425 400,520,878 737,493,303 299,279,801 321,084,386 620,364,187
(Forward)
 Financial Statements 189

Consolidated
2017 2016
Within Over Within Over
Twelve Months Twelve Months Total Twelve Months Twelve Months Total
Nonfinancial assets
Bank premises, furniture, fixtures
and equipment - net of
accumulated depreciation and
amortization P– P6,877,012 P6,877,012 P– P6,498,639 P6,498,639
Investment properties - net of
accumulated depreciation – 6,509,539 6,509,539 – 6,762,710 6,762,710
Deferred tax assets – 1,778,081 1,778,081 – 1,666,267 1,666,267
Investments in associates – 329,422 329,422 – 278,752 278,752
Intangible assets – 4,104,032 4,104,032 – 4,089,715 4,089,715
Goodwill – 839,748 839,748 – 839,748 839,748
Other assets – gross 1,281,008 1,292,209 2,573,217 944,754 1,015,932 1,960,686
1,281,008 21,730,043 23,011,051 944,754 21,151,763 22,096,517
Allowance for impairment and credit losses (Note 16) (8,748,958) (9,006,852)
Unearned discounts (Note 10) (307,886) (255,841)
(9,056,844) (9,262,693)
P751,447,510 P633,198,011
Financial liabilities
Deposit liabilities 602,734,404 32,358,989 635,093,393 P513,517,732 P28,065,286 P541,583,018
Bills payable 20,118,031 – 20,118,031 16,954,998 – 16,954,998
Manager’s checks 2,441,042 – 2,441,042 2,029,778 – 2,029,778
Accrued interest and other
expenses* 1,114,252 267,189 1,381,441 870,204 – 870,204
Derivative liabilities 267,533 – 267,533 243,198 – 243,198
Other liabilities 5,399,076 – 5,399,076 5,238,408 – 5,238,408
632,074,338 32,626,178 664,700,516 538,854,318 28,065,286 566,919,604
Nonfinancial liabilities
Accrued interest and other
expenses 105,468 1,140,710 1,246,178 87,156 910,830 997,986
Deferred tax liabilities – 1,161,653 1,161,653 – 1,161,414 1,161,414
Income tax payable 362,041 – 362,041 437,303 – 437,303
Other liabilities 202,174 119,451 321,625 150,814 144,686 295,500
P632,744,021 P35,047,992 P667,792,013 P539,529,591 P30,282,216 P569,811,807
*Accrued interest and other expenses include accrued interest payable and accrued other expenses payable (Note 19).
Parent Company
2017 2016
Within Over Within Over
Twelve Months Twelve Months Total Twelve Months Twelve Months Total
Financial assets
Cash and other cash items P11,160,173 P– P11,160,173 P10,580,748 P– P10,580,748
Due from BSP 91,717,037 – 91,717,037 85,307,128 – 85,307,128
Due from other banks 14,066,620 – 14,066,620 9,689,165 – 9,689,165
SPURA 17,347,522 – 17,347,522 2,958,465 – 2,958,465
Financial assets at FVPL 12,633,520 3,423,303 16,056,823 7,232,882 – 7,232,882
AFS financial assets - gross 6,733,105 36,210,301 42,943,406 11,159,904 20,000,169 31,160,073
HTM financial assets 346,208 61,187,285 61,533,493 2,087,861 51,981,160 54,069,021
Loans and receivables - gross 136,176,920 255,754,257 391,931,177 131,527,458 203,449,468 334,976,926
Accrued interest receivable - gross 3,247,352 – 3,247,352 2,728,373 – 2,728,373
Other assets - gross 1,927,221 208,496 2,135,717 3,350,015 254,485 3,604,500
295,355,678 356,783,642 652,139,320 266,621,999 275,685,282 542,307,281
( Forward)
190 China Bank Annual Financial and Sustainability Report 2017

Parent Company
2017 2016
Within Over Within Over
Twelve Months Twelve Months Total Twelve Months Twelve Months Total
Nonfinancial assets
Bank premises, furniture, fixtures
and equipment - net of
accumulated depreciation and
amortization – 5,464,582 5,464,582 – 5,143,981 5,143,981
Investment properties - net of
accumulated depreciation – 2,756,921 2,756,921 – 2,967,294 2,967,294
Deferred tax assets – 1,297,271 1,297,271 – 1,508,150 1,508,150
Investments in subsidiaries – 13,560,733 13,560,733 – 12,169,037 12,169,037
Investment in associates – 329,422 329,422 – 276,559 276,559
Intangible assets – 800,861 800,861 – 805,582 805,582
Goodwill – 222,841 222,841 – 222,841 222,841
Other assets - gross 895,082 991,386 1,886,468 759,212 754,754 1,513,966
895,082 25,424,017 26,319,099 759,212 23,848,198 24,607,410
Allowances for impairment and credit losses (Note 16) (6,921,550) (7,598,152)
Unearned discounts (Note 10) (267,099) (198,042)
(7,188,649) (7,796,194)
P671,269,770 P559,143,914
Financial liabilities
Deposit liabilities P534,657,559 P24,578,420 P559,235,979 P455,816,577 P15,145,414 P470,961,991
Bills payable 20,118,031 – 20,118,031 16,954,998 – 16,954,998
Manager’s checks 1,709,248 – 1,709,248 1,445,585 – 1,445,585
Accrued interest and other
expenses* 1,068,572 – 1,068,572 577,550 – 577,550
Derivative liabilities 267,533 – 267,533 243,198 – 243,198
Other liabilities 3,509,795 – 3,509,795 4,089,817 – 4,089,817
561,330,738 24,578,420 585,909,158 479,127,725 15,145,414 494,273,139
Nonfinancial liabilities
Accrued interest and other
expenses 96,153 1,119,223 1,215,376 77,836 905,965 983,801
Income tax payable 339,155 – 339,155 354,212 – 354,212
Other liabilities 155,320 – 155,320 115,928 – 115,928
P561,921,366 P25,697,643 P587,619,009 P479,675,701 P16,051,379 P495,727,080
*Accrued interest and other expenses include accrued interest payable and accrued other expenses payable (Note 19).

23. EQUITY

The Parent Company’s capital stock consists of (amounts in thousands, except for number of shares):
2017 2016
Shares Amount Shares Amount
Common stock - P10.00 par value
Authorized – shares 3,300,000,000 2,500,000,000
Issued and outstanding
Balance at beginning of year 2,002,027,836 P20,020,278 1,853,728,497 P18,537,285
Stock rights 483,870,967 4,838,710 – –
Stock dividends* 198,872,913 1,988,729 148,299,339 1,482,993
2,684,771,716 P26,847,717 2,002,027,836 P20,020,278
*The stock dividends declared include fractional shares equivalent to 1,009 and 1,060 in 2017 and 2016, respectively.
 Financial Statements 191

The Parent Company shares are listed in the Philippine Stock Exchange.

Stock Rights Offering

On February 22, 2017, the BOD authorized the Parent Company to conduct a rights issue by way of offering common shares to certain eligible
shareholders. The BSP approved the stock rights offering on March 6, 2017.

Each eligible shareholder was entitled to one share, at P31.00 apiece, per 4.1375 existing common shares as of April 19, 2017. The stock
rights offering yielded a subscription of 483,870,967 common shares which were listed at the Philippine Stock Exchange on May 10, 2017.
The total proceeds of the stock rights offering amounted to P14.9 billion, net of stock issuance cost of P52.09 million which was deducted from
additional paid in capital.

The additional capital enabled the Parent Company to grow its loan portfolio, expand its branch network, and support its other strategic
business initiatives.

Increase in the Parent Company’s Authorized Capital Stock

On March 15, 2017 and May 4, 2017 the BOD approved and the stockholders ratified, respectively, the increase in the Parent Company’s
authorized capital stock from P25.00 billion to P33.00 billion, or from 2.50 billion to 3.30 billion shares with par value of P10.00 per share.
The increase in the Parent Company’s authorized capital stock was subsequently approved by the BSP and the SEC on August 2, 2017 and
September 29, 2017, respectively.

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 P10.00 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, 2017 which is the record date of the Parent Company’s
stock dividend) recorded under “Other Liabilities.”

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, 2017 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 1,934 and 1,959 as of
December 31, 2017 and 2016, respectively.

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 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
192 China Bank Annual Financial and Sustainability Report 2017

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%

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, 2017 and 2016, 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 P851.57 million and P607.74 million as of December 31, 2017 and 2016, 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.

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, 2017
and 2016.

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.
 Financial Statements 193

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, 2015. 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, 2017 as reported to the BSP are shown in the table below.

Consolidated Parent Company

2017 2016 2017 2016
(Amounts in Million Pesos)
CET 1 Capital P78,086 P58,170 P77,161 P57,409
Less: Regulatory Adjustments 7,434 7,338 13,854 13,169
70,652 50,832 63,307 44,240
Additional Tier 1 Capital − − − −
Less: Regulatory Adjustments − − − −
− − − −
Net Tier 1 Capital 70,652 50,832 63,307 44,240
Tier 2 Capital 3,970 4,076 3,410 3,514
Less: Regulatory Adjustments − − − −
Net Tier 2 Capital 3,970 4,076 3,410 3,514
Total Qualifying Capital P74,622 P54,908 P66,717 P47,754

Consolidated Parent Company

2017 2016 2017 2016
(Amounts in Million Pesos)
Credit RWA P480,956 P414,381 P451,457 P352,651
Market RWA 7,665 4,575 7,540 4,339
Operational RWA 36,047 30,727 28,526 25,689
Total RWA P524,668 P449,683 P487,523 P382,679

CET 1 capital ratio 13.47% 11.30% 14.02% 11.56%

Tier 1 capital ratio 13.47% 11.30% 14.02% 11.56%
Total capital ratio 14.22% 12.21% 14.78% 12.48%

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.

24. 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, 2017.
194 China Bank Annual Financial and Sustainability Report 2017

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

2017 2016 2017 2016
Net plan assets (Note 15) P995,050 P754,754 P991,386 P754,754
Retirement liabilities (Note 20) (119,451) (144,686) – –
P875,599 P610,068 P991,386 P754,754

The movements in the defined benefit asset, present value of defined benefit obligation and fair value of plan assets follow:

Consolidated
2017
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,
2017 service cost Net interest expense* paid in net interest) adjustments assumptions assumptions gains (losses) by employer 2017
(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 P4,521,109 P− P217,203 P217,203 (P288,014) (P153,076) P− P− P− (P153,076) P571,200 P4,868,423
Present value of
defined benefit
obligation 3,911,041 375,598 188,654 564,252 (288,014) − 48,675 (243,130) − (194,455) − 3,992,824
Net defined benefit
asset P610,068 (P375,598) P28,549 (P347,049) P− (P153,076) (P48,675) P243,130 P− P41,379 P571,200 P875,599
*Presented under Compensation and fringe benefits in the statements of income.

Consolidated
2016
Remeasurements in OCI
Return on
Net benefit cost
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,
2016 service cost Net interest expense* paid in net interest) adjustments assumptions assumptions gains (losses) by employer 2016
(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 P4,472,990 P− P179,522 P179,522 (P644,384) P278,115 P− P− P− P278,115 P234,867 P4,521,109
Present value of
defined benefit
obligation 3,851,428 302,347 148,206 450,553 (644,384) − 72,293 165,252 15,900 253,444 − 3,911,041
Net defined benefit
asset P621,562 (P302,347) P31,316 (P271,031) P− P278,115 (P72,293) (P165,252) (P15,900) P24,671 P234,867 P610,068
*Presented under Compensation and fringe benefits in the statements of income.

Parent Company
2017
Remeasurements in OCI
Return on
plan assets Actuarial Actuarial
(excluding changes arising changes arising
Net benefit cost
amount from from changes Changes in
January 1, Current Net pension Benefits included experience in financial remeasurement Contribution December 31,
2017 service cost Net interest expense* paid in net interest) adjustments assumptions gains (losses) by employer 2017
(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 P4,315,996 P− P206,736 P206,736 (P273,001) (P141,532) P− P− (P141,532) P450,000 P4,558,199
Present value of
defined benefit
obligation 3,561,242 264,989 170,583 435,573 (273,001) − 50,525 (207,525) (157,000) − 3,566,813
Net defined benefit
asset P754,754 (P264,989) P36,153 (P288,837) P− (P141,532) (P50,525) P207,525 P15,468 P450,000 P991,386
*Presented under Compensation and fringe benefits in the statements of income.
 Financial Statements 195

Parent Company
2016
Remeasurements in OCI
Return on
plan assets Actuarial Actuarial
(excluding changes arising changes arising
Net benefit cost
amount from from changes Changes in
January 1, Current Net pension Benefits included experience in financial remeasurement Contribution December 31,
2016 service cost Net interest expense* paid in net interest) adjustments assumptions gains (losses) by employer 2016
(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 P3,892,350 P− P173,210 P173,210 (P183,784) P284,221 P− P− P284,221 P150,000 P4,315,997
Present value of defined
benefit obligation 3,106,532 288,262 138,241 426,503 (183,784) 49,966 162,025 211,991 3,561,243
Net defined benefit
asset P785,818 (P288,262) P34,969 (P253,293) P− P284,221 (P49,966) (P162,025) P72,230 P150,000 P754,754
*Presented under Compensation and fringe benefits in the statements of income.

The Parent Company expects to contribute P459.49 million to its defined benefit pension plan in 2018.

In 2017 and 2016, the major categories of plan assets as a percentage of the fair value of total plan assets are as follows:

Consolidated Parent Company

2017 2016 2017 2016
Parent Company shares (Note 29) 36.30% 40.13% 38.75% 42.04%
Equity instruments 20.97% 21.76% 21.59% 22.18%
Cash and cash equivalents 9.94% 6.13% 7.54% 3.57%
Debt instruments 14.74% 16.19% 12.93% 15.67%
Other assets 18.05% 15.79% 19.19% 16.54%
100.00% 100.00% 100.00% 100.00%

As of December 31, 2017 and 2016, the retirement fund’s ownership with the Parent Company is 1.98% and 2.29%, respectively.

The following table shows the breakdown of fair value of the plan assets:

Consolidated Parent Company

2017 2016 2017 2016
Due from BSP P– P53,580 P– P46,000
Deposits in banks 486,822 223,432 345,702 108,259
Financial assets at FVPL 993,381 976,684 967,053 956,163
AFS financial assets
Quoted debt securities 513,233 555,553 404,197 515,123
Quoted equity securities 33,652 7,054 23,121 5,481
Parent Company shares 1,777,250 1,814,531 1,777,250 1,814,531
Investments in unit investment trust fund 199,557 167,840 179,913 152,278
Corporate bonds 8,750 8,750 8,750 8,750
Loans and receivable 688,029 553,339 685,179 552,379
Investment properties* 143,799 147,154 143,799 143,799
Other assets 52,078 13,284 51,219 13,234
P4,896,551 P4,521,201 P4,586,183 P4,315,997
* Investment properties comprise properties located in Manila.

The carrying value of the plan assets of the Group and Parent Company amounted to P4.90 billion and P4.59 billion, respectively, as of
December 31, 2017, and P4.52 billion and P4.32 billion, respectively, as of December 31, 2016.
196 China Bank Annual Financial and Sustainability Report 2017

The principal actuarial assumptions used in 2017 and 2016 in determining the retirement asset (liability) for the Group’s and Parent
Company’s retirement plans are shown below:

2017
Parent CBSI CIBI CBC-PCCI CBCC CBSC
Discount rate:
January 1 4.79% 5.08% 5.14% 5.14% 5.19% –
December 31 5.60% 5.63% 5.82% 5.82% 5.85% 5.85%
Salary increase rate 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%

2016
Parent CBSI PDB CIBI CBC-PCCI
Discount rate:
January 1 4.45% 4.99% 5.10% 5.10% –
December 31 4.79% 5.08% 5.14% 5.14% 5.19%
Salary increase rate 6.00% 6.00% 6.00% 6.00% 6.00%

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, 2017 Parent CBSI CIBI CBC-PCCI CBCC CBSC

Discount rate
(+1%) (P176,120) (P39,471) (P1,138) (P6,434) (P1,157) (P218)
(-1%) 266,156 50,838 1,568 11,519 1,460 285

Salary increase rate

(+1%) 250,898 48,520 1,504 11,019 1,414 272
(-1%) (171,429) (38,611) (1,115) (6,328) (1,146) (212)

December 31, 2016 Parent CBSI CIBI CBC-PCCI CBCC

Discount rate
(+1%) (P246,034) (P35,473) (P1,566) (P9,072) (P814)
(-1%) 330,859 45,560 2,073 12,454 1,025

Salary increase rate

(+1%) 310,338 43,290 1,946 11,854 983
(-1%) (237,969) (34,585) (1,522) (8,860) (799)

The weighted average duration of the defined benefit obligation are presented below:

December 31, December 31,

2017 2016
Parent Company 13 13
CBSI 18 18
CIBI 19 19
CBC-PCCI 19 19
CBCC 23 22
CBSC 25 –
 Financial Statements 197

The maturity analyses of the undiscounted benefit payments as of December 31, 2017 and 2016 are as follows:

December 31, 2017 Parent CBSI CIBI CBC-PCCI CBCC CBSC

1 year and less P927,473 P12,666 P– P17,059 P– P–
More than 1 year
to 5 years 935,382 70,067 1,571 8,957 – 2,038
More than 5 years
to 10 years 2,183,572 178,995 16,915 47,035 5,212 665
More than 10 years
to 15 years 2,452,767 635,724 8,790 60,509 13,184 –
More than 15 years
to 20 years 3,614,035 1,034,331 – 151,035 103,356 1,751
More than 20 years 22,632,896 10,283,386 477,064 1,267,884 402,263 164,340

December 31, 2016 Parent CBSI CIBI CBC-PCCI CBCC

1 year and less P884,693 P9,290 P– P– P–
More than 1 year to 5 years 846,426 64,223 1,571 20,508 –
More than 5 years to 10 years 2,115,399 140,944 12,533 41,384 7,925
More than 10 years to 15 years 2,680,694 541,073 25,081 41,182 13,494
More than 15 years to 20 years 3,146,044 1,023,406 – 159,992 104,806
More than 20 years 21,735,037 8,360,827 393,003 1,173,627 275,604

25. 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. The aggregate notional amounts of the outstanding buy US dollar currency forwards as of December 31,
2017 and 2016 amounted to US$228.48 million and US$148.58 million, respectively, while the sell US dollar forward contracts amounted to
US$164.89 million and US$197.06 million, respectively. Weighted average buy US dollar forward rate as of December 31, 2017 is P51.13 and
P46.76 in 2016, while the weighted average sell US dollar forward rates are P51.41 and P44.26, respectively.

The aggregate notional amounts of the outstanding buy Euro currency forwards as of December 31, 2017 and 2016 amounted to €113 million
and €2 million, respectively while the aggregate notional amounts of the outstanding sell Euro currency forwards as of the December 31, 2017
and 2016 amounted to nil and €6 million, respectively. The weighted average buy Euro forward rates as of December 31, 2017 is P59.32 and
P53.40 in December 31, 2016 while the weighted average sell Euro forward rate as of December 31, 2016 is P51.85.

The aggregate notional amounts of the outstanding buy Hongkong dollars (HKD) currency forwards as of December 31, 2017 and
December 31, 2016 amounted to nil and HKD155.15 million, respectively. The weighted average buy HKD forward rates as of
December 31, 2016 is P6.41.

The aggregate notional amounts of the outstanding sell Chinese Yuan (CNY) currency forwards as of December 31, 2017 and December 31,
2016 amounted to nil and CNY34.91 million. The weighted average sell CNY forward rates as of December 31, 2016 is P7.12.

The aggregate notional amounts of the outstanding IRS as of December 31, 2017 and 2016 amounted to P9.99 billion and P10.82 billion,
respectively.

The aggregate notional amounts of the outstanding buy US Dollar NDF as of December 31, 2017 amounted to US$5.00 million. The weighted
average buy NDF rate as of December 31, 2017 is P49.85.

As of December 31, 2017 and 2016, the fair values of derivatives follow:

2017 2016
Derivative Derivative Derivative Derivative
Asset Liability Asset Liability
Currency forwards P294,873 P235,787 P176,513 P213,788
IRS 28,963 31,746 30,065 29,410
Warrants 9,751 – 9,710 –
P333,587 P267,533 P216,288 P243,198
198 China Bank Annual Financial and Sustainability Report 2017

Fair Value Changes of Derivatives

The net movements in fair value changes of derivative instruments are as follows:

2017 2016
Balance at beginning of year (P26,910) P233,553
Fair value changes during the year 132,805 (183,640)
Settled transactions (39,841) (76,823)
Balance at end of year P66,054 (P26,910)

The net movements in the value of the derivatives are presented in the statements of income under the following accounts:

2017 2016 2015

Foreign exchange gain (loss) P96,401 (P283,973) P47,031
Trading and securities gain (loss)* (Note 21) (3,437) 23,510 (1,425)
P92,964 (P260,463) P45,606
*Net movements in the value related to embedded credit derivatives and IRS.

26. 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 2017, 2016 and 2015 amounted to
P782.30 million, P681.05 million and P615.00 million, respectively, for the Group, and P518.47 million, P450.53 million and P396.88 million,
respectively, for the Parent Company.

Future minimum rentals payable of the Group and the Parent Company under non-cancelable operating leases follow:

Consolidated Parent Company

2017 2016 2017 2016
Within one year P601,876 P573,623 P551,239 P506,446
After one year but not more than five years 2,230,498 1,900,916 1,984,453 1,677,595
After five years 1,335,370 1,152,237 915,394 724,682
P4,167,744 P3,626,776 P3,451,086 P2,908,723

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

2017 2016 2017 2016
Within one year P26,521 P5,044 P19,913 P4,865
After one year but not more than five years 19,246 22,047 1,042 2,977
After more than five years 7,810 27,653 − −
P53,577 P54,744 P20,955 P7,842

27. 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.
 Financial Statements 199

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%, while all other income of the FCDU is subject to the
30.00% corporate tax.

On March 15, 2011, the BIR issued Revenue Regulation (RR) No. 4-2011 which prescribes the attribution and allocation of expenses between
FCDUs/EFCDUs or OBU and RBU and within RBU. Pursuant to the regulations, the Parent Company made an allocation of its expenses in
calculating income taxes due for RBU and FCDU.

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
2017 2016 2015 2017 2016 2015
Current
Final tax P677,450 P498,750 P435,649 P607,136 P458,011 P417,227
RCIT 977,968 907,782 1,007,447 829,109 785,800 941,923
MCIT – – 29,935 – – –

1,655,418 1,406,532 1,436,245 1,243,811

1,473,031 1,359,150
Deferred (166,241) (279,980) (663,062) 206,239 (160,672) (531,080)
P1,489,177 P1,126,552 P809,969 P1,642,484 P1,083,139 P828,070

The details of net deferred tax assets (liabilities) follow:

Consolidated Parent Company
2017 2016 2017 2016
Deferred tax assets (liabilities) on
Allowance for impairment and credit losses P2,585,512 P2,429,146 P2,076,465 P2,249,967
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 (210,800) (91,030) (222) 32,014
Net defined benefit asset (297,416) (183,020) (297,416) (226,426)
Fair value adjustments on net assets (liabilities) of PDB and
Unity Bank (805,515) (1,102,839) – –
Others (107,948) 65,849 –
P616,428 P504,852 P1,297,271 P1,508,150

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
2017 2016 2017 2016

Allowance for impairment and credit losses P2,306,353 P3,525,592 P− P98,262

Accrued compensated absences 171,431 87,499 65,384 53,003
NOLCO − − − −
Excess of MCIT over RCIT − 52,929 − −
Others 371,427 67,793 − −
P2,849,211 P3,733,813 P65,384 P151,265
200 China Bank Annual Financial and Sustainability Report 2017

As of December 31, 2017, details of excess of MCIT over RCIT of the Group follow:

InceptionYear Original Used Expired Remaining Expiry

Amount Amount Amount Balance Year
2014 P13,054 P13,054 P− P− 2017
2015 35,414 35,414 − − 2018
2016 − − − − 2019
2017 − − − − 2020
P48,468 P48,468 P− P−

The reconciliation of the statutory income tax to the provision for income tax follows:

Consolidated Parent Company

2017 2016 2015 2017 2016 2015
Statutory income tax P2,703,632 P2,276,256 P1,923,764 P2,746,937 P2,262,431 P2,002,359
Tax effects of -
FCDU income (498,029) (549,881) (459,351) (496,062) (543,591) (472,787)
Non-taxable income (939,179) (219,042) (300,817) (837,850) (179,507) (330,074)
Interest income subjected to final tax (279,914) (464,491) (168,700) (266,103) (604,445) (180,071)
Nondeductible expenses 771,915 243,937 (63,433) 612,065 146,205 (232,661)
Others (269,248) (160,227) (121,494) (116,503) 2,046 41,304
Provision for income tax P1,489,177 P1,126,552 P809,969 P1,642,484 P1,083,139 P828,070

28. 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 30).

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 AFS financial assets with total face value of P1.176 billion and P994.05 million as of
December 31, 2017 and 2016, 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.

29. 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 P42.89 million and P41.69 million, respectively, in 2017, P44.35 million and P41.41 million,
respectively, in 2016, and P44.19 million and P41.35 million, respectively, in 2015.

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.
 Financial Statements 201

A summary of transactions with related party retirement plans follows:

Consolidated Parent Company

2017 2016 2017 2016
Deposits in banks P486,822 P223,432 P345,702 P108,259
AFS financial assets 1,777,250 1,814,531 1,777,250 1,814,531
Dividend income 47,751 44,214 47,751 44,214
Interest income 2,037 2,069 1,520 1,172
Total market value of shares 1,777,250 1,814,531 1,777,250 1,814,531
Number of shares held 51,571 47,751 51,571 47,751

In 2015, dividend income and interest income of the retirement plan from investments and placements in the Parent Company amounted to
P40.94 million and P0.70 million, respectively, for the Group, and P40.94 million and P0.51 million, respectively, for the Parent Company.

AFS financial assets 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

2017 2016 2015 2017 2016 2015
Short-term employee benefits P482,345 P380,394 P411,833 P408,311 P315,284 P325,324
Post-employment benefits 2,501 4,774 6,526 2,501 2,194 3,946
P484,846 P385,168 P418,359 P410,812 P317,478 P329,270

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, 2017

Category Amount / Volume Outstanding Balance Terms and Conditions
Significant Investor
Loans and receivables P6,682,725 Partially secured Loans with interest rate of 2 - 5.12%
Issuances P5,624,213 and maturity of two to seven years.
Repayments (1,651,488)
Deposit liabilities 257 These are checking accounts with annual average rate
Deposits 3,164,475 of 0.13%.
Withdrawals (3,164,441)
202 China Bank Annual Financial and Sustainability Report 2017

December 31, 2017

Category Amount / Volume Outstanding Balance Terms and Conditions
Associate
Deposit liabilities P77,722 These are savings accounts with annual average
Deposits P1,175,969 interest rates ranging from 0.25% to 1.00%.
Withdrawals (1,386,319)
Key Management
Personnel
Loans and receivables 39,312 Unsecured Officer’s accounts from Credit card with
Issuances 417 interest of 3% and currently maturing and Fully
secured OEL accounts with interest of 6%;Secured;
no impairment; with annual fixed interest rates
Repayments 2,238 ranging from 0% to 5.50%
Deposit liabilities 18,772 These are checking, savings and time deposits with
Deposits 279,554 annual average interest rates ranging from 0.25%
to 1.00%.
Withdrawals (276,612)
Other Related Parties
Deposit liabilities 51,563 These are checking and savings accounts with annual
Deposits 16,038,034 average interest rates ranging from 0.13% to 1.00%.
Withdrawals (16,008,489)

December 31, 2016

Category Amount / Volume Outstanding Balance Terms and Conditions
Significant Investor
Loans and receivables P2,710,000 These are secured loans with interest rate of 5.13% and
Issuances P– maturity of four years; collateral includes shares of
stocks with fair value of P28.44 billion.
Repayments –
Deposit liabilities 223 These are checking accounts with annual average rate
Deposits 2,053,853 of 0.13%.
Withdrawals (10,270,042)
Associate
Deposit liabilities 288,072 These are savings accounts with annual average interest
Deposits 437,486 rates ranging from 0.25% to 1.00%.
Withdrawals (1,097,863)
Key Management
Personnel
Loans and receivables 11,703 This includes secured and unsecured loans amounting
Issuances 557 to P16.12 million and P8.02 million, respectively.
Secured loans bear annual interest rate of 6.00%
Repayments 8,463
and maturity of 15 years. Collateral includes real
properties with fair value of P32.82 million.
Deposit liabilities 15,830 These are checking, savings and time deposits with
Deposits 209,071 annual average interest rates ranging from 0.25% to
1.00%.
Withdrawals (228,679)
Other Related Parties
Deposit liabilities 22,019 These are checking and savings accountswith annual
average interest rates ranging from 0.13% to 1.00%.
Deposits 8,122,268
Withdrawals (33,781,787)
 Financial Statements 203

Interest income earned and interest expense incurred from the above loans and deposit liabilities in 2017, 2016, and 2015 follow:

Significant Investor Associate

2017 2016 2015 2017 2016 2015
Interest income P169,706 P138,944 P142,662 P– P– P1,288
Interest expense 61 12 8 1,849 1,513 2,411

Key Management Personnel Other Related Parties

2017 2016 2015 2017 2016 2015
Interest income P17,102 P385 P1,039 P– P– P–
Interest expense 47 40 1,270 69 11 125

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.

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, 2017

Category Amount / Volume Outstanding Balance Nature, Terms and Conditions
Significant Investor
Loans and receivables P6,682,725 These are secured loans with interest rate of 5.13% and
Issuances P5,624,213 maturity of four years; collateral includes shares of
stocks with fair value of P28.44 billion
Repayments (1,651,488)
Deposit liabilities 257 These are checking accounts with annual average rate
Deposits 3,164,475 of 0.13%.
Withdrawals (3,164,441)
Subsidiaries
Deposit liabilities 32,801 These are checking and savings accounts with annual
Deposits 330,111 average interest rates ranging from 0.13% to 1.00%.
Withdrawals (311,528)

Associate
Deposit liabilities 77,722 These are savings accounts with annual average interest
Deposits 1,175,969 rates ranging from 0.25% to 1.00%.
Withdrawals (1,386,319)
Key Management Personnel
Loans and receivables 952
Issuances 417
Repayments (714)
Deposit liabilities 18,772 These are savings account with annual average interest
Deposits 279,554 rates ranging from 0.25% to 1.00%.
Withdrawals (276,612)
Other Related Parties
Deposit liabilities 51,563 These are checking and savings accounts with annual
Deposits 16,038,034 average interest rates ranging from 0.13% to 1.00%.
Withdrawals (16,008,489)
204 China Bank Annual Financial and Sustainability Report 2017

December 31, 2016

Category Amount / Volume Outstanding Balance Nature, Terms and Conditions
Significant investor
Loans and receivables P2,710,000 These are secured loans with interest rate of 5.13% and
Issuances P– maturity of four years; collateral includes shares of
stocks with fair value of P28.44 billion.
Repayments –
Deposit liabilities 223 These are checking accounts with annual average rate
Deposits 2,053,853 of 0.13%.
Withdrawals (10,270,042)
Subsidiaries
Deposit liabilities 14,218 These are checking and savings accounts with annual
Deposits 273,603 average interest rates ranging from 0.13% to 1.00%.
Withdrawals (6,767,542)
Associate
Deposit liabilities 288,072 These are savings accounts with annual average interest
Deposits 437,486 rates ranging from 0.25% to 1.00%.
Withdrawals (4,700,011)
Key Management Personnel
Loans and receivables 1,249 Loans with interest rates ranging from 6.00% to 8.00%
Issuances 557 and maturity of 15 years.
Repayments (1,060)
Deposit liabilities 15,830 These are savings account with annual average interest
Deposits 209,071 rates ranging from 0.25% to 1.00%.
Withdrawals (206,142)
Other Related Parties
Deposit liabilities 22,019 These are checking and savings accounts with annual
Deposits 8,122,268 average interest rates ranging from 0.13% to 1.00%.
Withdrawals (33,709,401)

In 2017, the Parent Company sold its investment property to a related party for a total cash selling price of P161.58 million and recognized gain
of P142.61 million.

In 2015, PDB sold its investment property to the Parent Company for a total selling price of P464.52 million. PDB recognized gain on such
sale amounting to P55.30 million. PDB’s gain on sale was eliminated at the group level. In addition, CBSI assigned its portfolio of receivables
to PDB amounting to P2.83 billion.

The related party transactions shall be settled in cash. There are no provisions for credit losses in 2017, 2016 and 2015 in relation to amounts
due from related parties.

Interest income earned and interest expense incurred from the above loans and deposit liabilities in 2017, 2016 and 2015 follow:

Subsidiaries Associate
2017 2016 2015 2017 2016 2015
Interest expense P46 P33 P137 P1,849 P1,513 P19

Key Management Personnel Other Related Parties

2017 2016 2015 2017 2016 2015
Interest income P46 P56 P78 P– P– P–
Interest expense 47 40 76 69 11 27

Significant Investor
2017 2016 2015
Interest income P169,706 P138,944 P142,662
Interest expense 61 12 8
 Financial Statements 205

Outright purchases and outright sale of debt securities of the Parent Company with its subsidiaries in 2017 and 2016 follow:

Subsidiaries
2017 2016
Peso-denominated
Outright purchase P675,016 P1,504,879
Outright sale 18,902,488 1,128,000

The following table shows the amount and outstanding balance of other related party transactions included in the financial statements:

Subsidiaries
2017 2016 Nature, Terms and Conditions
Balance Sheet
Accounts receivable P2,741 P5,187 This pertains to various expenses advanced by CBC in behalf of CBSI
Security deposits 2,736 3,050 This pertains to the rental deposits with CBSI for office space leased out
to the Parent Company
Accounts payable 10,607 10,623 This pertains to various unpaid rental to CBSI

Subsidiaries
2017 2016 2015 Nature, Terms and Conditions
Income Statement
Miscellaneous income P1,800 P1,800 P1,800 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 agreement between the Parent
Company and its subsidiaries, the subsidiaries shall
pay the Parent Company an annual fee
Occupancy cost 24,532 22,255 16,266 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 193,651 169,658 122,260 This pertains to the computer and general banking
services provided by CBC-PCCI to the Parent
Company to support its reporting requirements

Regulatory Reporting
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 Parent Company

2017 2016 2017 2016
Total outstanding DOSRI loans P11,507,281 P7,023,635 P11,500,850 P7,015,002
Percent of DOSRI loans granted under regulations existing prior to
− − − −
BSP Circular No. 423
Percent of DOSRI loans granted under BSP Circular No. 423 − − − −
Percent of DOSRI loans to total loans 2.54% 1.81% 2.95% 2.12%
Percent of unsecured DOSRI loans to total DOSRI loans 1.52% 5.99% 1.51% 5.98%
Percent past due DOSRI loans to total DOSRI loans − − − −
Percent of non-performing DOSRI loans to total DOSRI loans − − − −

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.
206 China Bank Annual Financial and Sustainability Report 2017

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.

30. 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.

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

2017 2016 2017 2016
Trust department accounts (Note 28) P131,813,251 P104,373,741 P131,577,983 P102,862,792
Unused commercial letters of credit (Note 29) 21,596,174 17,801,390 21,383,196 17,801,205
Future exchange bought 18,736,175 8,922,411 18,736,175 8,922,411
Future exchange sold 15,179,964 11,267,749 15,179,964 11,267,749
Credit card lines 10,359,997 8,883,196 10,359,997 8,883,196
IRS receivable 9,991,390 10,823,400 9,991,390 10,823,400
Outstanding guarantees issued 3,079,993 4,827,530 744,547 1,140,440
Inward bills for collection 2,386,848 234,588 2,386,848 234,588
Standby credit commitment 2,274,398 3,029,782 2,274,398 3,029,782
Spot exchange sold 1,399,180 558,487 1,399,180 558,487
Spot exchange bought 996,333 409,940 996,333 409,940
Deficiency claims receivable 291,831 294,632 291,831 294,632
Late deposits/payments received 127,832 417,559 116,313 405,838
Outward bills for collection 93,772 73,702 91,943 57,227
Others 1,614 2,575 1,354 2,348

31. 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.
 Financial Statements 207

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 a pool rate which approximates the marginal cost of funds.

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.

The following tables present relevant financial information regarding business segments measured in accordance with PFRS as of and for the
years ended December 31, 2017, 2016 and 2015:

Lending Business Retail Banking Business

2017 2016 2015 2017 2016 2015
Results of Operations
Net interest income
Third party P13,876,995 P11,234,520 P9,884,601 P855,933 P477,635 P247,320
Intersegment (8,438,704) (6,185,045) (5,226,806) 7,915,744 7,067,165 6,377,212
5,438,291 5,049,475 4,657,795 8,771,677 7,544,800 6,624,532
Other operating income 1,317,298 907,182 885,555 1,465,962 1,234,356 1,420,568
Total revenue 6,755,589 5,956,657 5,543,350 10,237,639 8,779,156 8,045,100
Other operating expense (2,294,490) (2,228,638) (1,361,427) (6,536,859) (5,759,880) (5,472,577)
Income before income tax 4,461,099 3,728,019 4,181,923 3,700,780 3,019,276 2,572,523
Provision for income tax 236,856 96,461 − − (6,833) (5,000)
Net income P4,697,955 P3,824,480 P4,181,923 P3,700,780 P3,012,443 P2,567,523
Total assets P299,052,197 P251,890,331 P200,906,783 P431,622,883 P361,036,278 P124,073,281
Total liabilities P1,171,742 P2,233,433 P1,050,634 P444,030,414 P365,417,688 P336,671,277
Depreciation and amortization P61,988 P51,266 P39,019 P378,597 P313,745 P300,010
Provision for impairment and
credit losses P668,360 P916,974 P258,725 P238,645 P126,025 P217,447
Capital expenditures P63,136 P451,770 P15,713 P118,378 P647,525 P15,880
208 China Bank Annual Financial and Sustainability Report 2017

Financial Markets Other Business and Support Units

2017 2016 2015 2017 2016 2015
Results of Operations
Net interest income
Third party P1,661,494 P2,039,741 P2,446,783 P3,231,982 P2,942,296 P2,506,480
Intersegment 1,124,033 (424,779) (567,059) (601,073) (457,341) (583,347)
2,785,527 1,614,962 1,879,724 2,630,909 2,484,955 1,923,133
Other operating income 879,737 1,386,223 1,393,658 2,438,697 1,566,985 787,361
Total revenue 3,665,264 3,001,185 3,273,382 5,069,606 4,051,943 2,710,494
Other operating expense (1,264,773) (959,151) (651,534) (6,619,869) (5,253,750) (5,674,243)
Income before income tax 2,400,491 2,042,034 2,621,848 (1,550,263) (1,201,807) (2,963,749)
Provision for income tax (547,624) (388,807) (357,864) (1,178,409) (827,373) (447,105)
Net income P1,852,867 P1,653,227 P2,263,984 (P2,728,672) (P2,029,180) (P3,410,854)
Total assets P168,052,729 P128,281,917 P104,004,670 (P147,280,299) (P108,010,515) P97,842,229
Total liabilities P140,321,883 P124,409,814 P59,108,627 P82,267,974 P77,750,872 P70,825,521
Depreciation and amortization P41,852 P30,449 P20,199 P735,052 P729,326 P620,184
Provision for impairment and
credit losses P– P– P– (P152,834) (P192,453) P490,402
Capital expenditures P63,795 P230,076 P8,799 P389,402 (P193,719) P1,453,590

Total
2017 2016 2015
Results of Operations
Net interest income
Third party P19,626,404 P16,694,192 P15,085,184
Intersegment − − −
19,626,404 16,694,192 15,085,184
Other operating income 6,101,694 5,094,746 4,487,142
Total revenue 25,728,098 21,788,941 19,572,326
Other operating expense (16,715,991) (14,201,419) (13,159,781)
Income before income tax 9,012,107 7,587,522 6,412,545
Provision for income tax (1,489,177) (1,126,552) (809,969)
Net income P7,522,930 P6,460,970 P5,602,576
Total assets P751,447,510 P633,198,011 526,826,963
Total liabilities P667,792,013 P569,811,807 P467,656,059
Depreciation and amortization P1,217,489 P1,124,786 P979,412
Provision for impairment and
credit losses P754,171 P850,546 P966,574
Capital expenditures P634,711 P1,135,652 P1,493,982

The Group’s share in net income (loss) of an associate included in other operating income amounting to P73.13 million, (P89.38 million) and
(P37.89 million) in 2017, 2016 and 2015, respectively are reported under ‘Other Business and Support Units’.

32. 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:

2017 2016 2015

a. Net income attributable to equity holders of the parent P7,513,972 P6,458,296 P5,606,666
b. Weighted average number of common shares outstanding (Note 23) 2,581,182 2,243,086 2,243,086
c. EPS (a/b) P2.91 P2.88 P2.50
 Financial Statements 209

As of December 31, 2017, 2016 and 2015, there were no outstanding dilutive potential common shares. Before consideration of the stock
rights and 8.00% stock dividends distributed in 2017, the EPS for 2016 and 2015 were P3.23 and P2.80, respectively.

33. FINANCIAL PERFORMANCE

The following basic ratios measure the financial performance of the Group and the Parent Company:

Consolidated Parent Company

2017 2016 2015 2017 2016 2015
Return on average equity 10.01% 10.42% 9.62% 10.01% 10.32% 9.57%
Return on average assets 1.12% 1.16% 1.17% 1.27% 1.33% 1.35%
Net interest margin 3.11% 3.20% 3.37% 2.91% 3.03% 3.20%

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
2017 2016 2015
Addition to investment properties from settlement of loans P579,089 P784,415 P960,332
Fair value gain in AFS financial assets 158,946 405,722 (610,521)
Addition to equity investment − − −
Cumulative translation adjustment (15,970) (3,637) (16,734)
Addition to chattel mortgage from settlement of loans 559,283 334,553 112,056

Parent Company
2017 2016 2015
Addition to investment properties from settlement of loans P126,652 P296,844 P257,851
Fair value gain in AFS financial assets 113,020 405,722 (464,471)
Addition to equity investment − − −
Cumulative translation adjustment (16,197) (3,637) (14,914)
Addition to chattel mortgage from settlement of loans 10,824 19,088 2,244

The following table shows the reconciliation analysis of liabilities arising from financing activities for the period ended December 31, 2017:

Balance at beginning of year P16,954,998

Cash flows during the year
Proceeds 252,268,556
Settlement (249,219,839) 3,048,717
Non-cash changes
Foreign exchange movement 71,613
Amortization of transaction cost 42,703 114,316
Balance at end of year P20,118,031
210 China Bank Annual Financial and Sustainability Report 2017

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, 2017

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 P18,751,845 P− P18,751,845 P18,751,845 P18,749,980 P1,865
Currency forwards 117,562 − 117,562 32,748 − 84,814
IRS 28,963 − 28,963 8,361 − 20,602
P146,525 P− P146,525 P41,109 P− P105,416
Financial liabilities
Bills payable P14,306,179 P− P14,306,179 P17,984,923 P17,453,765 P−
Currency forwards 62,555 − 62,555 32,748 − 29,807
IRS 31,745 − 31,745 8,361 − 23,384
P14,400,479 P− P14,400,479 P18,026,032 P17,453,765 P53,191

December 31, 2016

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
Currency forwards P17,631 P− P17,631 P17,310 P− P321
IRS 30,065 − 30,065 16,496 − 13,569
P47,696 P− P47,696 P33,806 P− P13,890
Financial liabilities
Bills payable P8,072,782 P− P8,072,782 9,520,216 P8,943,902 P−
Currency forwards 67,611 − 67,611 17,310 − 50,301
IRS 29,410 − 29,410 16,496 − 12,914
P8,169,803 P− P8,169,803 P9,554,022 P8,943,902 P63,215

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.
 Financial Statements 211

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 28, 2018.

37. SUPPLEMENTARY INFORMATION REQUIRED UNDER RR NO. 15-2010

In compliance with the requirements set forth by RR 15-2010, hereunder are the details of percentage and other taxes paid or accrued by the
Parent Company in 2017.

Gross receipts tax P972,112

Documentary stamps tax 759,058
Local taxes 64,989
Fringe benefit tax 5,509
Others 17,662
Balance at end of year P1,819,330

Withholding Taxes
Details of total remittances of withholding taxes in 2017 and amounts outstanding as of
December 31, 2017 are as follows:

Total Amounts
remittances outstanding
Final withholding taxes P934,030 P88,350
Withholding taxes on compensation and benefits 639,612 46,242
Expanded withholding taxes 131,791 9,183
P1,705,433 P143,775
 212 China Bank Annual Financial and Sustainability Report 2017

CHINA BANK BRANCHES

102-6
MAKATI MAIN BRANCH (HO) AURORA BLVD.-NEW MANILA BF RESORT VILLAGE BRANCH COMMONWEALTH AVE. EXT.-
CBC Bldg., 8745 Paseo de Roxas BRANCH BF Resort Drive cor. Gloria Diaz St., CASA MILAN BRANCH
cor. Villar Sts., Makati City Aurora Blvd., Brgy. Valencia, BF Resort Village, Talon Dos, ALX Center Building,
Trunkline: 885-5555 Quezon City Las Piñas City Commonwealth Ave. Ext.
(Private Exchange Connecting All Tel. Nos.: 727-4192; 727-4171 Tel. Nos.: 873-4542, 873-4541 North Fairview, Quezon City
Departments) 873-4540 Tel. No.: 463-5714
AYALA-ALABANG BRANCH
BINONDO BUSINESS CENTER G/F, CBC-Building Acacia Ave., BGC-ICON PLAZA BRANCH CONGRESSIONAL AVENUE BRANCH
CBC Bldg., Dasmariñas Madrigal Business Park, G/F Icon Plaza Bldg., G/F Unit C The Arete Square,
cor. Juan Luna Sts., Binondo, Manila Ayala Alabang, Muntinlupa City 25th cor. 5th Sts., Bonifacio South, Congressional Ave., Project 8,
Trunklines: 247-5388; 8855-222 Tel. Nos.: 807-0673-74 Fort Bonifacio Global City, Taguig City Quezon City
(Private Exchange Connecting All 850-3785/9640/8888 Tel. Nos.: 777-1943; 800-1474 Tel. Nos.: 351-8648; 351-8645
Departments) 351-8646
AYALA AVE.-AMORSOLO BRANCH BGC-ONE WORLD PLACE BRANCH
METRO MANILA G/F Teleperformance Bldg. G/F One World Place, 32nd Avenue, CONGRESSIONAL AVE. EXTENSION
Ayala Ave., Makati City Fort Bonifacio Global City, Taguig City -MIRA NILA BRANCH
999 MALL BRANCH Tel. Nos.: 541-7348; 541-5958 Tel. Nos.: 869-6309; 843-2448 CBC Bldg. Congressional Ave. Ext.,
Unit 3D-5; 3D-7 999 Shopping Mall Quezon City
Bldg. 2 Recto-Soler Sts., AYALA-COLUMNS BRANCH BGC- W TOWER BRANCH Tel. Nos.: 932-2372; 932-2370
Binondo, Manila G/F The Columns Tower 3, G/F W Tower 39th St., North Bonifacio
Tel. Nos.: 523-1216/1217 Ayala Avenue, Makati City Triangle BGC, Taguig City,1634 CORINTHIAN HILLS BRANCH
1218/ 1219 Tel. Nos.: 915-3672/3673 Tel. Nos.: 552-3311; 551-9072 G/F The Clubhouse, Corinthian Hills,
915-3674/3675 Temple Drive, Brgy. Ugong Norte,
A. BONIFACIO-MAUBAN BRANCH BGC- WORLD PLAZA BRANCH Quezon City
G/F Urban Oasis Residences, BACLARAN-F.B. HARRISON G/F (Unit 5) World Plaza, L4B5 Tel. Nos.: 637-3170/3180/1915
423-431., A. Bonifacio Ave., BRANCH E-Square Information Technology
Brgy. San Jose, Quezon City BAGPI Main Bldg., 2935 F.B. Harrison Park, Crescent Park West, 5th Avenue, CUBAO-ARANETA BRANCH
Tel. No.: 282-1991/94 cor. Ortigas St., Pasay City Bonifacio Global City, Taguig City Shopwise Arcade Building, Times
Tel. Nos.: 838-6187; 838-5038 Tel. Nos.: 541-3447; 541-4220 Square St., Araneta Shopping Center,
ALABANG HILLS BRANCH Cubao, Quezon City
G/F RBC-MDC Corporate Center, BALINTAWAK-BONIFACIO BRANCH BINANGONAN BRANCH Tel. Nos.: 911-2369/70
Don Jesus Blvd., Alabang Hills Village, 657 A. Bonifacio Avenue National Highway, Bo. Tagpos, 438-3830-32; 911-2397
Muntinlupa City Balintawak, Quezon City Binangonan, Rizal
Tel. Nos.: 877-8567; 877-8604 Tel. Nos.: 361-3449; 361-7825 Tel. Nos.: 669-1530; 669-1659 CUBAO-AURORA BRANCH
362-3660; 361-0450 911 Aurora Boulevard Extension
ALVARADO BRANCH BLUMENTRITT BRANCH cor. Miami Street, Cubao, Quezon City
Alvarado St., Binondo, Manila BALUT BRANCH 1777-1781 Cavite corner Leonor Tel. Nos.: 912-5164/57
Tel. Nos.: 562-3863; 562-3866 North Bay Shopping Center Rivera St., Blumentritt, Sta. Cruz, 913-4675/76; 911-3524
Honorio Lopez Boulevard Manila
ANTIPOLO CITY BRANCH Balut, Tondo, Manila Tel. Nos.: 742-0254; 711-8589 CUBAO-P. TUAZON BRANCH
G/F BudgetLane Arcade, Tel. Nos.: 253-9921/29; 253-9620 No. 287 P. Tuazon Ave. near corner
No. 6, Provincial Road 251-1182/86 BO. KAPITOLYO BRANCH 18th Avenue, Brgy. San Roque,
Brgy. San Jose, Antipolo City, Rizal G/F P&E Building, 12 United corner Cubao, Quezon City
Tel. Nos.: 650-3277; 650-2087 BANAWE BRANCH First Sts., Bo. Kapitolyo, Pasig City Tel. Nos.: 911-5896; 911-8416
695-1509 CBC Building, 680 Banawe Avenue, Tel. Nos.: 634-8370/8915/3697
Sta. Mesa Hts. District I, Quezon City CULIAT-TANDANG SORA BRANCH
ANTIPOLO-SUMULONG HIGHWAY Tel. Nos.: 743-7486/88 BONNY SERRANO BRANCH G/F Royal Midway Plaza,
BRANCH 416-7028/7030 G/F Greenhills Garden Square, No. 419, Tandang Sora Ave.
No. 219 Sumulong Highway, 711-8694 297 Col. Bonny Serrano Ave., Brgy. Culiat, 1128 Quezon City
Brgy. Mambugan, Antipolo City, Rizal Quezon City Tel. Nos.: 288-2575; 288-5114
Tel. Nos.: 632-7309; 632-7573 BANAWE-MA. CLARA BRANCH Tel. Nos.: 410-0677; 997-8043
655-8087 G/F Prosperity Bldg., Banawe St. 997-8031 D. TUAZON BRANCH
Quezon City 148 D. Tuazon St., Brgy. Lourdes,
ANTIPOLO CITY-TAKTAK BRANCH Tel. Nos.: 732-1060; 740-4864 CAINTA BRANCH Sta. Mesa Heights, Quezon City
Sumulong Highway cor. Taktak Road, 743-8967 CBC Bldg. (Beside Sta. Lucia East Mall) Tel. Nos.: 731-2516/2508
Brgy. Dela Paz, Antipolo City, Rizal Felix Ave. (Imelda Ave.), Cainta, Rizal
Tel. Nos.: 721-6320; 721-6316 BEL-AIR BRANCH Tel. Nos.: 646-0691/93; 645-9974 DAMAR VILLAGE BRANCH
2/F Saville Bldg., Gil Puyat Ave. 682-1795 Clubhouse, Damar Village,
ARANETA AVE. BRANCH cor. Paseo de Roxas St., Makati City Quezon City
Philippine Whithasco Bldg. Tel. Nos.: 897-2212 CAINTA-POBLACION BRANCH Tel. Nos.: 442-3581; 367-5517
420 Araneta Avenue cor. Bayani St., 899-4186/0685 A. Bonifacio Ave., Poblacion,
Quezon City Cainta, Rizal DASMARIÑAS VILLAGE BRANCH
Tel. Nos.: 731-2252; 731-2261 BETTER LIVING SUBD. BRANCH Tel. Nos.: 637-1935; 637-6634 2283 Pasong Tamo Ext.
732-4153; 731-2243 128 Doña Soledad Ave., corner Lumbang Street, Makati City
410-6753 Parañaque City CAPITOL HILLS BRANCH Tel. Nos.: 894-2392/93; 813-2958
Tel. Nos.: 556-3467; 556-3468 G/F 88 Design Pro Building
ARRANQUE BRANCH 556-3470 Capitol Hills, Old Balara, Quezon City DEL MONTE AVENUE BRANCH
Don Felipe Building Tel. Nos.: 952-7776/7805/7804 No. 497 Del Monte Ave.
675 Tomas Mapua St., BF HOMES BRANCH Bgry. Manresa, Quezon City
Sta. Cruz, Manila , CENTURY CITY-KNIGHTSBRIDGE Tel. Nos.: 413-2826; 413-2825
Tel. Nos.: 733-3477; 734-4777 United BF Homes, Parañaque City BRANCH 961-8828; 871-2745
733-7704 Tel. Nos.: 825-6138/6891/6828 Unit 17 & 18 Knightsbridge
733-8335 to 40 Residences, Century City, DEL MONTE-MATUTUM BRANCH
734-4497; 734-4501/06 BF HOMES-AGUIRRE BRANCH Kalayaan Ave., Makati City No. 202 Del Monte Avenue near
Margarita Centre, Aguirre Ave. Tel. Nos.: 866-3937; 866-3803 corner Matutum St., Brgy St. Peter,
ASUNCION BRANCH corner Elsie Gaches Street, Quezon City
Units G6 & G7 Chinatown Steel BF Homes, Parañaque City COMMONWEALTH AVENUE Tel. Nos.: 731-2535; 731-2571
Towers, Asuncion St., Tel. Nos.: 799-4707/4942 BRANCH 413-2118; 416-7791
San Nicolas, Manila 659-3359/3360 LGF Ever Gotesco Mall,
Tel. Nos.: 241-2311/52/59/61 556-5845 Commonwealth Center DIVISORIA-STA. ELENA BRANCH
Commonwealth Avenue corner New Divisoria Condominium Center
Don Antonio Road, Quezon City 632 Sta. Elena St., Binondo, Manila
Tel. Nos.: 932-0818/0820 Tel. Nos.: 247-1435/36/37
431-5000/01
 Directories 213

DON ANTONIO BRANCH EXAMINER BRANCH GIL PUYAT AVE.-REPOSO BRANCH KALOOKAN BRANCH
G/F Royale Place, Don Antonio Ave., No. 1525 Quezon Ave. No. 331 Gil Puyat Ave., Makati City CBC Bldg., 167 Rizal Avenue Extension
Brgy. Old Balara, Quezon City cor. Examiner St., West Triangle, Tel. Nos.: 541-3739; 541-3735 Grace Park, Kalookan City
Tel. Nos.: 932-9477 Quezon City Tel. Nos.: 364-0515/35
952-9678/9354 Tel. Nos.: 376-3313/3314 GREENBELT 1 BRANCH 364-0717/31
376-3317/3318 G/F Greenbelt 1, Legaspi Street near 364-0494; 364-9948
E. RODRIGUEZ-ACROPOLIS corner Paseo de Roxas, Makati City 366-9457
BRANCH EVANGELISTA BRANCH Tel. Nos.: 836-1387; 836-1405
G/F Suncrest Building, Evangelista corner Gen. Estrella Sts., 836-1406 KALOOKAN-8th AVE. BRANCH
E. Rodriguez Jr. Ave., Quezon City Bangkal, Makati City No. 279 Rizal Avenue corner 8th Ave.,
Tel. Nos.: 654-3607; 654-3586 Tel. Nos.: 759-5095; 759-5096 GREENHILLS BRANCH Grace Park, Kalookan City
856-0434; 856-0433 G/F Gift Gate Bldg., Greenhills Tel. Nos.: 287-0001; 287-0262
E. RODRIGUEZ-CORDILLERA Shopping Center, San Juan,
BRANCH FAIRVIEW BRANCH Metro Manila KALOOKAN-10th AVE. BRANCH
No. 291 (G/F Units 285 & 287) G/F Angelenix House, Fairview Ave. Tel. Nos.: 721-0543/56; 721-3189 No. 275 10th Ave. corner 3rd Street,
E. Rodriguez Sr. Blvd., corner Camaro St., Quezon City 727-9520; 724-5078 Grace Park, Kalookan City
Brgy. Doña Josefa, Quezon City Tel. Nos.: 937-5597; 938-9636 724-6173; 727-2798 Tel. Nos.: 287-5484; 287-5489
Tel. Nos.: 257-1512; 256-5292 937-8086; 461-3004
GREENHILLS-CONNECTICUT KALOOKAN-CAMARIN BRANCH
E. RODRIGUEZ-HILLCREST BRANCH FAIRVIEW TERRACES BRANCH BRANCH L8B4 La Forteza Subd., Brgy. 175,
No. 402 E. Rodriguez Sr. Blvd., LGF Fairview Terraces, Quirino G/F Missouri Square Bldg., Camarin, Kalookan City
Cubao, Quezon City Highway corner Maligaya Drive, Missouri cor. Connecticut St. Tel. Nos.: 442-6830; 442-7541
Tel. Nos.: 571-8927; 571-8928 Brgy. Pasong Putik, Novaliches, Northeast Greenhills, San Juan City
571-8929 Quezon City Tel. Nos.: 997-3452; 997-3455 KALOOKAN-MONUMENTO
Tel. Nos.: 285-5956; 285-6058 BRANCH
E. RODRIGUEZ SR. BLVD. BRANCH GREENHILLS-ORTIGAS BRANCH 779 McArthur Highway,
CBC Bldg., #286 E. Rodriguez Sr. Blvd. FILINVEST CORPORATE CITY CBC Bldg., 14 Ortigas Avenue Kalookan City
Brgy. Damayang Lagi, Quezon City BRANCH Greenhills, San Juan, Metro Manila Tel. Nos.: 364-2571; 361-3270
Tel. Nos.: 416-3166; 722-5860 G/F Wilcon Depot, Alabang-Zapote Tel. Nos.: 723-0530/01 921-3043
722-5893 Road cor. Bridgeway Ave., Filinvest 723-0502/04
Corporate City, Alabang, Muntinlupa 726-1492; 727-4163 KAMIAS BRANCH
EASTWOOD CITY BRANCH Tel. Nos.: 775-0097/0126 G/F CRM Building II, 116 Kamias Road
Unit D, Techno Plaza One, 842-1993/2198 HEROES HILLS BRANCH corner Kasing-Kasing St., Quezon City
Eastwood City Cyberpark, Quezon Ave. cor. J. Abad Santos St., Tel. Nos.: 433-6007; 920-7367
E. Rodriguez Jr. Ave., (C-5) FILINVEST CORP. CITY- Heroes Hills, Quezon City 920-8770
Bagumbayan, Quezon City COMMERCENTER BRANCH Tel. Nos.: 351-4359/5121
Tel. Nos.: 706-3491/3493/1979 G/F Commercenter Alabang, 411-3375; 412-5697 KAMUNING BRANCH
706-3320/3448 Commerce Ave. cor. Filinvest Ave., #47 SKY47 Bldg., Kamuning Road,
Filinvest Corporate City, Alabang, HOLY SPIRIT DRIVE BRANCH Quezon City
EDSA-KALOOKAN BRANCH Muntinlupa City CBC Bldg., Lot 18 Block 6 Holy Spirit Tel. Nos.: 287-3369; 287-3368
No. 531 (Lot 5 Block 30) EDSA near Tel. Nos.: 805-0824; 805-0827 Drive, Don Antonio Heights,
corner Biglang Awa Street, Brgy. Holy Spirit, Quezon City KARUHATAN BRANCH
Kalookan City FILINVEST CORP. CITY-NORTHGATE Tel. No.: 355-8665 No. 248 McArthur Highway,
Tel. Nos.: 442-4338; 442-4339 BRANCH Karuhatan, Valenzuela City
442-4340 G/F Aeon Centre Building, Northgate ILAYA BRANCH Tel. Nos.: 291-0431/0175
Cyberzone, Filinvest Corporate City, #947 APL-YSL Bldg., Ilaya, 440-0033
EDSA-PHILAM BRANCH Alabang, Muntinlupa City Tondo, Manila
(formerly SM City North EDSA- Tel. Nos.: 776-1985; 551-5569 Tel. Nos.: 245-2416; 245-2548 KATIPUNAN AVE.-LOYOLA
Annex Branch) 245-2557 HEIGHTS BRANCH
917 EDSA, Brgy. Philam, Quezon City FIVE E-COM CENTER BRANCH Elizabeth Hall, Katipunan Ave.,
Tel. Nos.: 374-2345; 374-2362 G/F Five E-com Center, Harbor Drive, INTRAMUROS BRANCH Loyola Heights, Quezon City
287-3106 MOA Complex, Pasay City No. 409 A. Soriano Avenue, Tel. Nos.: 287-9218; 287-9221
Tel. Nos.: 815-1883; 815-1884 Intramuros, Manila
EDSA-TIMOG AVE. BRANCH 815-1887 Tel. Nos.: 528-4241; 536-1044 KATIPUNAN AVE.-ST. IGNATIUS
G/F Richwell Corporate Center, 536-5971; 310-5122 BRANCH
102 Timog Ave., Brgy. Sacred Heart, FORT BONIFACIO GLOBAL CITY CBC Bldg., No. 121 Katipunan Ave.,
Quezon City BRANCH J. ABAD SANTOS AVENUE BRANCH Brgy. St. Ignatius, Quezon City
Tel. Nos.: 441-5225, 441-5226 G/F Marajo Tower, 26th Street 2159 J. Abad Santos Ave., Tel. Nos.: 913-5532; 912-5003
441-5227 cor. 4th Avenue Fort Bonifacio cor. Batangas St., Tondo, Manila 913-3226
Global City, Taguig City Tel. Nos.: 255-1201 to 02
ELCANO BRANCH Tel. Nos.: 799-9072/9074 255-1204 LAGRO BRANCH
G/F Elcano Tower, Elcano Street, 856-4416/4891/5196 CBC Bldg., Lot 32 Blk 125 Quirino
San Nicolas, Manila 403-1558 (MCB) J. ABAD SANTOS AVE.-QUIRICADA Highway, Greater Lagro, Quezon City
Tel. Nos.: 244-6760; 244-6765 BRANCH Tel. Nos.: 372-8226; 372-8223
244-6779 GEN. LUIS-KATIPUNAN BRANCH J. Abad Santos Ave. near corner
CBC Bldg., Gen. Luis St. corner Quiricada Street, Manila LAS PIÑAS BRANCH
ERMITA BRANCH Katipunan SB Road, Brgy. Nagkaisang Tel. Nos.: 253-6803; 253-6804 CBC Bldg., Alabang-Zapote Road
Ground Floor A, Ma. Natividad Bldg., Nayon, Novaliches, Quezon City cor. Aries St., Pamplona Park Subd.,
#470 T. M. Kalaw cor. Cortada Sts., Tel. Nos.: 285-5664; 285-5665 JUAN LUNA BRANCH Las Piñas City
Ermita, Manila G/F Aclem Building, 501 Juan Luna St. Tel. Nos.: 874-6204; 874-6210
Tel. Nos.: 525-6477;536-7794 GIL PUYAT AVENUE BRANCH Binondo, Manila
525-6544;523-0074 Mitsu Bldg., No. 65 Sen. Gil Puyat Ave. Tel. Nos.: 247-3570/3795/3786 LAS PIÑAS-MANUELA BRANCH
523-9862 Brgy. Palanan, Makati City 480-0211 Alabang-Zapote Road cor.
Tel. Nos.: 844-0492/94 Philamlife Ave., Pamplona Dos,
ESPAÑA BRANCH 844-0688/90 KALAYAAN AVE. BRANCH Las Piñas City
España cor. Valencia Sts., G/F PPS Building, Kalayaan Avenue, Tel. Nos.: 872-9801/9572/9533
Sampaloc, Manila GIL PUYAT-ELIZABETH PLACE Quezon City 871-0770
Tel. Nos.: 741-9572/6209 BRANCH Tel. Nos.: 332-3858; 332-3859
741-6208/9565 G/F Elizabeth Place, Gil Puyat Ave., 332-3860
Makati City
Tel. Nos.: 776-0502; 776-3234
 214 China Bank Annual Financial and Sustainability Report 2017

CHINA BANK BRANCHES

LAS PIÑAS-MARCOS ALVAREZ AVE. MAGALLANES VILLAGE BRANCH MARIKINA-GIL FERNANDO NOVALICHES-TALIPAPA BRANCH
BRANCH G/F DHI Bldg., No. 2 Lapu-Lapu Ave. BRANCH 528 Copengco Bldg., Quirino
Metro Towne Center, corner EDSA, Magallanes Village, Block 9, Lot 14 Gil Fernando Ave., Highway, Talipapa, Novaliches,
2020 Marcos Alvarez Ave., Talon V, Makati City Marikina City Quezon City
Moonwalk, Las Piñas City Tel. Nos.: 757-0272/0240 Tel. Nos.: 646-0780; 646-8032 Tel. Nos.: 936-2202; 936-3311
Tel. No.: 370-9724 852-1290; 852-1245 358-2138 936-7765

LAS PIÑAS-NAGA ROAD BRANCH MAKATI AVENUE BRANCH MARIKINA-SSS VILLAGE BRANCH NOVALICHES-ZABARTE
Lot 3, Naga Road, Pulanglupa2, G/F CBC Bldg., Makati Ave. Lilac St., Rancho Estate IV, G/F C.I. Bldg, 1151 Quirino Highway
Las Piñas City cor. Hercules St., Makati City Concepcion Dos, Marikina City cor. Zabarte Road, Brgy. Kaligayahan,
Tel. No.: 541-1671; 541-1674 Tel. Nos.: 890-6971 to 74 Tel. Nos.: 948-5135; 941-7709 Novaliches, Quezon City
997-3343 Tel. Nos.: 461-7691; 461-7694
LAVEZARES BRANCH MAKATI-COMEMBO BRANCH 461-7698
No. 412 Lavezares Street, No. 46 JP Rizal Ext., Brgy. Comembo, MARIKINA-STA. ELENA BRANCH
San Nicolas, Manila Makati City 250 J.P. Rizal Street, Sta. Elena, NUEVA BRANCH
Tel. Nos.: 521-6978; 521-7132 Tel. Nos.: 802-2616; 802-2614 Marikina City Unit Nos. 557 & 559 G/F
521-7128 802-2613 Tel. Nos.: 646-4281; 646-4277 Ayson Building, Yuchengco St.,
646-4279; 646-1807 Binondo, Manila
LEGASPI VILLAGE-AIM BRANCH MAKATI-JP RIZAL BRANCH Tel. Nos.: 247-6374; 247-6396
G/F Cacho-Gonzales Building, JP Rizal corner Honradez Streets, MASANGKAY BRANCH 247-0493; 480-00-66
101 Aguirre cor. Trasierra Streets, Makati City 959-961 G. Masangkay Street,
Legaspi Village, Makati City Tel. No.: 815-6036 to 38 Binondo, Manila ONGPIN BRANCH
Tel. Nos.: 818-8156; 818-0734 Tel. Nos.: 244-1828/35/48/56/59 G/F Se Jo Tong Building,
818-9649 MAKATI-KALAYAAN AVE. BRANCH 808 Ongpin Street, Sta. Cruz, Manila
894-5882 to 85 Kalayaan Avenue, Makati City MASANGKAY-LUZON BRANCH Tel. Nos.: 733-8962 to 66
Tel. Nos.: 838-7253; 838-7252 1192 G. Masangkay St., 735-5362
LEGASPI VILLAGE-AMORSOLO Sta. Cruz, Manila
BRANCH MALABON-CONCEPCION BRANCH Tel. Nos.: 255-0739; 254-9974 OROQUIETA BRANCH
G/F CAP Bldg., Herrera cor. Amorsolo Gen. Luna corner Paez Streets, 254-9335 1225-1227, Oroquieta St.,
Sts., Legaspi Village, Makati City Concepcion, Malabon Sta. Cruz, Manila
Tel. Nos.: 832-6871; 833-5668 Tel. Nos.: 281-0102/03/04/05 MAYON BRANCH Tel. Nos.: 521-6648; 521-6650
281-0293 480 Mayon St., Maharlika
LEGASPI VILLAGE-C. PALANCA Sta. Mesa Heights, Quezon City ORTIGAS-ADB AVE. BRANCH
BRANCH MALABON-GOV. PASCUAL BRANCH Tel. Nos.: 731-9054/2766 LGF City & Land Mega Plaza
Suite A, Basic Petroleum Building CBC Bldg., Gov. Pascual Avenue, 741-2409 ADB Ave. cor. Garnet Road
104 C. Palanca Jr. Street Malabon City Ortigas Center, Pasig City
Legaspi Village, Makati City Tel. Nos.: 352-1816; 352-1817 MINDANAO AVE. BRANCH Tel. Nos.: 687-2457/58
Tel. Nos.: 894-5915/18; 810-1464 352-1822; 961-2147 G/F LJC Building, 189 Mindanao Ave. 687-2226/3263
Bahay Toro, Quezon City
LEGASPI VILLAGE-ESTEBAN MALABON-POTRERO BRANCH Tel. Nos.: 277-4768; 277-4782 ORTIGAS AVE. EXT.-RIVERSIDE
BRANCH CBC Bldg., McArthur Highway, BRANCH
G/F PPI Bldg., No. 109 Esteban St., Potrero, Malabon MUNTINLUPA-PUTATAN BRANCH Unit 2-3 Riverside Arcade
Legaspi Village, Makati City Tel. Nos.: 448-0524/25 G/F Teknikos Bldg., National Highway, Ortigas Avenue Extension corner
361-8671/7056 Brgy. Putatan, Muntinlupa City Riverside Drive, Brgy. Sta. Lucia,
LEGASPI VILLAGE-PEREA BRANCH Tel. Nos.: 511-0980; 808-1817 Pasig City
G/F Greenbelt Mansion, 106 Perea St., MALANDAY BRANCH Tel. Nos.: 748-18-08; 748-4426
Legaspi Village, Makati City CBC Bldg., McArthur Highway, N. DOMINGO BRANCH 655-7403; 655-8350
Tel. Nos.: 893-2273/2272/2827 Malanday, Valenzuela City G/F The Main Place, No. 1
Tel. Nos.: 432-9787; 292-6956/57 Pinaglabanan cor. N. Domingo Sts., ORTIGAS CENTER BRANCH
LEGASPI VILLAGE-SALCEDO 445-3201; 432-9785 San Juan City Unit 101 Parc Chateau Condominium
BRANCH Tel. Nos.: 470-2915; 470-2916 Onyx corner Sapphire Streets,
G/F Fedman Suites, 199 Salcedo MANDALUYONG-BONI AVE. 470-2917 Ortigas Center, Pasig City
Street, Legaspi Village, Makati City BRANCH Tel. Nos.: 633-7960/70/53/54
Tel. Nos.: 893-7680; 893-2618 G/F VOS Bldg., Boni Avenue corner NAVOTAS BRANCH 634-0178
759-2462; 893-1503 San Rafael Street, Mandaluyong City No. 500 M. Naval St. near corner
816-0905 Tel. Nos.: 746-6283/85; 534-2289 Lacson St., Brgy. North Bay Boulevard ORTIGAS COMPLEX BRANCH
North (NBBN), Navotas City G/F Padilla Building, F. Ortigas Jr. Road
MACAPAGAL AVE.-ASEANA MANDALUYONG-D. GUEVARA Tel. Nos.: 283-0752 to 54 (formerly Emerald Avenue),
SQUARE G/F 19 Libertad Plaza, Domingo Ortigas Center, Pasig City.
Aseana Square (Caltex Area), Guevara St., Mandaluyong City NOVALICHES BRANCH Tel. Nos.: 634-3469; 631-2772
D. Macapagal Ave., Aseana City, Tel. Nos.: 534-5528; 534-5529 954 Quirino Highway, Novaliches
Parañaque City Proper, Novaliches, Quezon City ORTIGAS-JADE DRIVE BRANCH
Tel. Nos.: 881-5124; 881-5179 MANDALUYONG-PIONEER Tel. Nos.: 936-3512 Unit G-03, Antel Global
BRANCH 937-1133/35/36 Corporate Center, Jade Drive,
MACAPAGAL AVE.-BIOPOLIS UG-05 Globe Telecom Plaza Tower I Ortigas Center, Pasig
BRANCH Pioneer Street, Mandaluyong City NOVALICHES-SANGANDAAN Tel. Nos.: 638-4489; 638-4490
G/F The Biopolis, Central Business Park Tel. Nos.: 746-6949; 635-4198 BRANCH 638-4510; 638-4540
1-A 076/01, Diosdado Macapagal 632-1399 CBC Building, Quirino Highway corner
Avenue, Pasay City Tandang Sora Ave., Brgy. Sangandaan, ORTIGAS-TEKTITE BRANCH
Tel. Nos.: 785-6431; 785-6434 MANILA-MACEDA BRANCH Novaliches, Quezon City Unit EC-06B PSE Center (Tektite)
Daguman Bldg., Maceda St., Tel. Nos.: 935-3049; 935-3491 Ortigas Center, Pasig City
MACAPAGAL AVE.- Sampaloc Manila Tel. Nos.: 637-0231; 637-0238
DOUBLEDRAGON BRANCH Tel. Nos.: 521-6644; 521-6643 NOVALICHES-STA. MONICA
DD Meridian Park Plaza, Macapagal BRANCH PACO BRANCH
Ave. cor. EDSA Ext., Pasay City MARIKINA-FAIRLANE BRANCH G/F E & V Bldg., Quirino Highway Gen. Luna corner Escoda Street,
Tel. Nos.: 838-3805; 838-3804 G/F E & L Patricio Building, corner Dumalay St., Novaliches, Paco, Manila
No. 809 J.P. Rizal Ave., Quezon City Tel. Nos.: 526-6492
Concepcion Uno, Marikina City Tel. Nos.: 288-3683; 288-2302 536-6630/31/72
Tel. Nos.: 997-0684; 997-0897
998-1817
948-6120 (MCB)
 Directories 215

PACO-ANGEL LINAO BRANCH PASIG-MERCEDES BRANCH QUIAPO BRANCH SAN JUAN BRANCH
Unit 1636 & 1638 Angel Linao St. Commercial Motors Corp. Compound 216-220 Villalobos St., Quiapo, Manila 17 (new) F. Blumentritt St.,
Paco, Manila Mercedes Ave., Pasig City Tel. Nos.: 733-2052/59/61 San Juan, M. M.
Tel. Nos.: 242-2849; 242-3416 Tel. Nos.: 628-0197/0209/0201 733-6282/86 Tel. Nos.: 724-8263; 726-4826
744-5616 to 18
PACO-OTIS BRANCH PASIG-SAN JOAQUIN BRANCH REGALADO AVE. BRANCH 723-7333
G/F Union Motor Corp. Bldg., No. 43 M. Concepcion Ave., CBC Building, Regalado Ave.,
1760 Dra. Paz Guazon St., San Joaquin, Pasig City North Fairview, Quezon City SAN JUAN-J. ABAD SANTOS
Paco, Manila Tel. Nos.: 997-2815; 997-2816 Tel. Nos.: 921-5678; 921-5359 BRANCH
Tel. Nos.: 561-6902; 561-6981 997-2817 Unit 3 Citiplace Bldg., 8001 Jose Abad
564-2247 RIZAL-ANGONO BRANCH Santos Street, Little Baguio,
PASIG-SANTOLAN BRANCH Lot 3 Blk. 4 M.L Quezon Ave. San Juan City
PADRE FAURA BRANCH G/F Felmarc Business Center, Richmond Subd., Angono, Rizal Tel. Nos.: 470-8292; 656-8329
G/F Regal Shopping Center, A. Mabini Amang Rodriguez Avenue, Tel. Nos.: 633-5198; 633-7513
cor. P. Faura Sts., Ermita, Manila Santolan, Pasig City SCT. BORROMEO BRANCH
Tel. Nos.: 526-0586; 527-3202 Tel. Nos.: 646-0635; 682-3474 RIZAL-SAN MATEO BRANCH G/F The Forum Building, 71- A Sct.
527-7865 682-3514; 681-4575 #63 Gen. Luna corner Simon St., Borromeo St., Diliman, Quezon City
Banaba, San Mateo, Rizal Tel. Nos.: 426-1431; 426-1340
PARAÑAQUE-BACLARAN BRANCH PASIG-SM SUPERCENTER BRANCH Tel. Nos.: 650-2230; 650-1837
Quirino Avenue cor. Aragon St., G/F SM Supercenter Pasig, SHAW-HAIG BRANCH
Baclaran, Parañaque City Frontera Drive, C-5, Ortigas, Pasig City ROCKWELL-ORTIGAS BRANCH G/F First of Shaw Bldg., Shaw Blvd.
Tel. Nos.: 581-1057; 663-0435 Tel. Nos.: 706-3207/3208/3209 G/F Tower 1 Rockwell Business Center, corner Haig St., Mandaluyong City
Ortigas Avenue, Pasig City Tel. Nos.: 534-1073; 534-0744
PARAÑAQUE-MOONWALK PASIG-VALLE VERDE BRANCH 718-0218; 621-6459
BRANCH G/F Reliance IT Center, ROOSEVELT AVE. BRANCH
Milky Way St. cor. Armstrong Avenue, E. Rodriguez Jr. Ave., CBC Bldg., #293 Roosevelt Ave., SHAW-PASIG BRANCH
Moonwalk, Parañaque City Ugong, Pasig City San Francisco Del Monte, Quezon City G/F RCC Center,
Tel. Nos.: 846-9729; 846-9739 Tel. Nos.: 706-9242; 706-9243 Tel. Nos.: 371-5133 to 35 No. 104 Shaw Boulevard, Pasig City
846-9771 410-2160; 410-1957 Tel. Nos.: 634-5018/19
PASO DE BLAS BRANCH 371-2766 634-3343/44
PARAÑAQUE-NAIA BRANCH G/F CYT Bldg., No. 178 Paso de Blas, 747-7812; 634-3340
Ninoy Aquino Ave., Parañaque City Valenzuela City ROOSEVELT AVE.-FRISCO BRANCH
Tel. Nos.: 541-8857; 541-8858 Tel. Nos.: 292-3215/3213/3216 G/F Norita Bldg., #51 H. Francisco St. SHAW-SUMMIT ONE BRANCH
corner Roosevelt Ave., Brgy. Paraiso, Unit 102 Summit One Office Tower
PARAÑAQUE-SAN ANTONIO PASONG TAMO BAGTIKAN Quezon City 530 Shaw Boulevard,
VALLEY BRANCH BRANCH Tel. Nos.: 709-7552; 921-0866 Mandaluyong City
San Antonio Shopping Center, G/F Trans-Phil House 1177 Chino Tel. Nos.: 531-3970; 531-5736
San Antonio Road, Brgy. San Antonio Roces Ave. cor. Bagtikan St., SALCEDO VILLAGE-L.P. LEVISTE 531-4058; 531-1304
Valley 1, Parañaque City Makati City BRANCH 533-8723; 533-4948
Tel. Nos.: 816-2448; 816-2451 Tel. Nos.: 403-4820; 403-4821 Unit 1-B G/F The Athenaeum
403-4822; 738-7591 San Agustin – LP Leviste St., SM AURA PREMIER BRANCH
PARAÑAQUE-SUCAT BRANCH Salcedo Village, Makati City L/G SM Aura Premier, McKinley
No. 8260 (between AMA Computer PASONG TAMO-CITYLAND BRANCH Tel. Nos.: 869-3128; 869-3132 Parkway, Fort Bonifacio Global City,
School and PLDT), Dr. A. Santos Ave., Units UG30-UG32 Cityland Pasong 869-3134 Taguig City
Brgy. SanIsidro, Parañaque City Tamo Tower, 2210 Pasong Tamo St., Tel. Nos.: 808-9727; 808-9701
Tel. Nos.: 820-8951/52; 820-2044 Makati City SALCEDO VILLAGE-TORDESILLAS
825-2501; 804-3054 Tel. Nos.: 817-9337/47/51/60/82 BRANCH SM CITY BICUTAN BRANCH
G/F Prince Tower Condominium LGF, Bldg. B, SM City Bicutan
PASAY-LIBERTAD BRANCH PASONG TAMO-LA FUERZA 14 Tordesillas St., Salcedo Village, Doña Soledad Ave.
CBC-Building, 184 Libertad Street, BRANCH Makati City cor. West Service Rd., Parañaque City
Antonio Arnaiz Ave., Pasay City La Fuerza Plaza 1, Chino Roces Ave., Tel. Nos.: 813-4901/32/33 Tel. Nos.: 821-0600/0700
Tel. Nos.: 551-7159; 834-8978 Makati City 813-4944/52 777-9347
831-0306; 831-0498 Tel. Nos.: 541-8850; 541-8851
SALCEDO VILLAGE-VALERO SM CITY BF PARAÑAQUE BRANCH
PASAY-ROXAS BLVD. BRANCH PATEROS BRANCH BRANCH G/F SM City BF Parañaque,
GF Unit G-01 Antel Seaview Towers G/F Adela Building, M. Almeda St., G/F Valero Tower, 122 Valero Street Dr. A. Santos Ave. corner President’s
2626 Roxas Blvd., Pasay City Brgy. San Roque, Pateros Salcedo Village, Makati City Avenue, Parañaque City
Tel. Nos.: 551-9067/68/69 Tel. Nos.: 531-6929; 531-6810 Tel. Nos.: 892-7768/69; 812-9207 Tel. Nos.: 825-3201; 825-2990
833-5048 654-3079 893-8188/96 825-3095; 820-0911

PASIG-A. MABINI BRANCH PHILAM BRANCH SALES-RAON BRANCH SM CITY FAIRVIEW BRANCH
A. Mabini Street, Brgy. Kapasigan, #8 East Lawin Drive, 611 Sales St., Quiapo, Manila LGF, SM City Fairview
Pasig City Philam Homes, QC Tel. Nos.: 734-5806; 734-7427 Quirino Avenue corner Regalado
Tel. Nos.: 534-5178; 634-4028 Tel. Nos.: 927-9841; 924-2872 734-6959 Avenue, Fairview, Quezon City
929-5734 Tel. Nos.: 417-2878; 939-3105
PASIG-C. RAYMUNDO BRANCH SAN ANTONIO VILLAGE-
G/F MicMar Apartments No. 6353 PROJECT 8-SHORTHORN BRANCH KAMAGONG BRANCH SM CITY MARIKINA BRANCH
C. Raymundo Avenue, Brgy. Rosario, Shorthorn Street, Project 8, Kamagong near corner G/F SM City Marikina,
Pasig City Quezon City St. Paul Streets, San Antonio Village, Marcos Highway, Brgy. Calumpang,
Tel. Nos.: 642-3652; 628-3912 Tel. Nos.: 373-3363; 373-3369 Makati City Marikina City
628-3922 Tel. Nos.: 777-4950; 777-4951 Tel. Nos.: 477-1845/46/47
QUEZON AVE. BRANCH 799-6105
PASIG-DELA PAZ BRANCH No. 18 G & D Bldg., Quezon Ave. SAN ANTONIO VILL.-P. OCAMPO
Amang Rodriguez Avenue, cor. D. Tuazon St., Q.C. BRANCH SM CITY MASINAG BRANCH
Brgy. Dela Paz, Pasig City Tel. Nos.: 712-3676; 712-0424 JM Macalino Auto Center, SM City Masinag, Marcos Highway,
Tel. Nos.: 637-7874; 637-7876 740-7779/80; 712-1105 P. Ocampo Street cor. Dungon St., Brgy. Mayamot, Antipolo City
416-8891 San Antonio Village, Makati Tel. Nos.: 655-8764; 655-9124
732-2137 (MCB) Tel. Nos.: 869-5648; 869-5649 655-8771
216 China Bank Annual Financial and Sustainability Report 2017

CHINA BANK BRANCHES

SM CITY NORTH EDSA BRANCH T. ALONZO BRANCH VALENZUELA BRANCH APALIT BRANCH
Cyberzone Carpark Bldg., Abeleda Business Center CBC Bldg., McArthur Highway CBC Bldg., McArthur Highway,
SM City North Avenue 908 T. Alonzo corner Espeleta Streets, cor. V. Cordero St., Marulas, San Vicente, Apalit, Pampanga
corner EDSA, Quezon City Sta. Cruz, Manila Valenzuela City Tel. No.: (045) 652-1131
Tel. Nos.: 456-6633; 454-8108/21 Tel. Nos.: 733-9581/82 Tel. Nos.: 293-8920; 293-6160
925-4273 734-3231 to 33 293-5088 to 90 BAGUIO CITY BRANCH
293-8919 G/F Juniper Bldg., A. Bonifacio Rd.,
SM CITY SAN LAZARO BRANCH TAFT AVE.-QUIRINO BRANCH Baguio City
UGF (Units 164-166) SM City San 2178 Taft Avenue near corner Quirino VALENZUELA-GEN. LUIS BRANCH Tel. Nos.: (074) 442-9581
Lazaro, Felix Huertas Street corner Avenue, Malate, Manila AGT Building, 425 Gen. Luis Street 443-5908 443-8659 to 60
A.H. Lacson Extension, Sta. Cruz, Tel. Nos.: 521-7825; 527-3285 Paso de Blas, Valenzuela City 442-9663
Manila 527-6747 Tel. Nos.: 443-6160/61
Tel. Nos.: 742-1572; 742-2330 983-3861/62 BAGUIO CITY-ABANAO BRANCH
493-7115 TANDANG SORA-VISAYAS AVE. G/F Paladin Hotel, No. 136 Abanao
BRANCH VALENZUELA-MALINTA BRANCH Ext. corner Cariño St., Baguio City
SM CITY TAYTAY BRANCH #250 Tandang Sora Ave., Quezon City MacArthur Highway, Brgy. Malinta, Tel. Nos.: (074) 424-4837
Unit 147 Bldg. B, SM City Taytay, Tel. Nos.: 426-3818; 426-3541 Valenzuela City 424-4838
Manila East Road, Brgy. Dolores, Tel. Nos.: 282-2160; 282-2013
Taytay, Rizal TAYTAY-ORTIGAS EXENSION BALANGA CITY BRANCH
Tel. Nos.: 286-5844; 286-5979 BRANCH VISAYAS AVE. BRANCH G/F Dilig Building, Don Manuel
661-2276, 661-2277 Ortigas Ave. Ext., Taytay, Rizal CBCBldg., Visayas Avenue corner Banzon Street, Balanga City, Bataan
Tel. No.: 727-1667 Congressional Ave. Ext., Quezon City Tel. Nos.: (047) 237-9388/89
SM MALL OF ASIA BRANCH Tel. Nos.: 454-0189; 925-2173 791-1779
G/F Main Mall Arcade, SM Mall of TAYTAY-SAN JUAN BRANCH 455-4334/35
Asia, Bay Blvd., Pasay City Velasquez St., Sitio Bangiad, BALER BRANCH
Tel. Nos.: 556-0100/0102/0099 Brgy. San Juan, Taytay, Rizal WEST AVE. BRANCH Provincial Road, Barrio Suklayain,
625-2246 Tel. No.: 998 - 6649 82 West Avenue, Quezon City Baler, Aurora
Tel. Nos.: 924-3131/3143 Tel. Nos.: (042) 724-0026
SM MEGAMALL BRANCH TIMOG AVE. BRANCH 924-6363;920-6258 (02) 703-3331
LGF Building A, SM Megamall, G/F Prince Jun Condominium, 411-6010/6011
E. delos Santos Avenue corner 42 Timog Ave., Q.C. 928-3270; BALIWAG BRANCH
J. Vargas St., Mandaluyong City Tel. Nos.: 371-4523/24 Km. 51, Doña Remedios Trinidad
Tel. Nos.: 633-1611/12 371-4522/06 XAVIERVILLE BRANCH (DRT) Highway, Baliwag, Bulacan
633-1788/89 65 Xavierville Ave., Loyola Heights, Tel. Nos.: (044) 766-1066/5257
638-7213 to15 TOMAS MAPUA-LAGUNA BRANCH Quezon City 673-5338
CBC Bldg., Tomas Mapua St. Tel. Nos.: 433-8696; 929-1265
SM SOUTHMALL BRANCH Sta. Cruz, Manila 927-9826 BATAAN-DINALUPIHAN BRANCH
UGF SM Southmall, Alabang-Zapote Tel. Nos.: 495-0302; 495-0294 GNI Building, San Ramon Highway
Road, Talon 1, Almanza, Las Piñas City LUZON corner Doña Rosa Street and
Tel. Nos.: 806-6116/19; 806-3536 TOMAS MORATO-E. RODRIGUEZ Mabini Ext., Dinalupihan, Bataan
806-3547 BRANCH ALBAY BRANCH Tel Nos. (047) 636-1452
1427 Tomas Morato Ave., Rizal St. cor. Gov. Reynold Street, (047) 636-1451
SOLEMARE BRANCH Quezon City Old Albay District, Legazpi City
G-11 Solemare Parksuites, Tel. Nos.: 470-3037; 477-1472 Tel. Nos.: (052) 742-0893 BATANGAS CITY BRANCH
5A Bradco Avenue, Aseana Business (052) 742-0894 P. Burgos Street, Batangas City
Park, Parañaque City TOMAS MORATO EXTENSION Tel. Nos.: (043) 723-0953
Tel. Nos.: 366-3237; 366-3219 BRANCH ANGELES CITY BRANCH (02) 520-6118
366-3199 Tomas Morato Ave., Quezon City CBC Bldg., 949 Henson St.,
Tel. Nos.: 373-4960; 373-4961 Angeles City BATANGAS-BALAYAN BRANCH
SOLER-168 BRANCH Tel. Nos.: (045) 887-1549 CBC Bldg., Barrio Ermita,
G/F R & S Bldg, Soler St., Manila TRINOMA BRANCH 323-5343 Balayan, Batangas
Tel. Nos.: 242-1041; 242-1674 Unit P002, Level P1, Triangle North of 887-1550/2291 Tel. Nos.: (043) 741-5028
242-1685 Manila, North Avenue corner EDSA, 625-8660/61 (043) 741-5180
Quezon City
SOUTH TRIANGLE BRANCH Tel. Nos.: 901-5570/5573 ANGELES CITY-BALIBAGO BRANCH BATANGAS-BAUAN BRANCH
G/F Sunshine Blvd. Plaza, Quezon Ave. Diamond Square, Service Road 62 Kapitan Ponso St.,
cor. Sct. Santiago and Panay Ave., TUTUBAN PRIME BLOCK BRANCH McArthur Highway cor. Charlotte St. Bauan, Batangas
Bgry. South Triangle, Quezon City Rivera Shophouse, Podium Area, Balibago, Angeles City, Pampanga Tel. Nos.: (043) 702-4481
Tel. Nos.: 277-7947; 277-7948 Tutuban Center Prime Block, Tel. Nos.: (045) 892-5136 702-5383
C.M. Recto Ave. corner Rivera Street, 892-5144
STA. MESA BRANCH Manila BATANGAS-LEMERY BRANCH
1-B G. Araneta Avenue, Tel. Nos.: 255-1414/15 ANGELES CITY-MARQUEE MALL Miranda Building, Ilustre Avenue,
Brgy. Doña Imelda, Quezon City BRANCH Lemery, Batangas
Tel. Nos.: 516-0764; 516-0765 UP TECHNO HUB BRANCH G/F Marquee Mall, Angeles City, Tel. Nos.: (043) 409-3467
516-0766 UP AyalaLand Techno Hub, Pampanga (02) 984-0206
Commonwealth Ave., Quezon City Tel. Nos.: (045) 436-4013
STO. CRISTO BRANCH Tel. Nos.: 441-1331/1332/1334 304-0850; 889-0975 BATANGAS-ROSARIO BRANCH
622-39 Sto. Cristo St., Dr. Gualberto Ave., Brgy. Namunga,
Binondo, Manila UP VILLAGE-MAGINHAWA BRANCH ANGELES-MCARTHUR HIGHWAY Rosario, Batangas
Tel. Nos.: 242-4668/73; 242-5361 LTR Bldg., No. 46 Maginhawa St., BRANCH Tel. Nos.: (043) 312-3748
241-1243; 242-5449 UP Village, Quezon City CBC Bldg., San Pablo St. corner 312-3776
242-3670 Tel. Nos.: 373-3349; 373-3354 McArthur Highway, Angeles City
Tel. Nos.: (045) 323-5793 BATANGAS-TANAUAN BRANCH
STO. DOMINGO AVE. BRANCH V. LUNA BRANCH 887-6028; 625-9362 J.P. Laurel Highway, Tanauan City,
Sto. Domingo Ave., Quezon City G/F AGGCT Bldg., No. 32 V. Luna Batangas
Tel. Nos.: 251-6005; 251-5852 cor. Matapat Sts., Brgy. Pinyahan, ANGELES-STO. ROSARIO BRANCH Tel. Nos.: (043) 702-8956
Quezon City Angeles Business Center Bldg., 702-8957
Tel. Nos.: 772-8992; 772-8564 Teresa Avenue, Nepo Mart Complex,
Angeles City, Pampanga
Tel. Nos.: (045) 888-5175
322-9596
 Directories 217

BULACAN-BALAGTAS BRANCH CAVITE-ROSARIO BRANCH ISABELA-ROXAS BRANCH LUCENA CITY BRANCH

MacArthur Highway, Brgy. San Juan, G/F CBC Bldg., Gen Trias Drive, National Road, Brgy. Bantug, 233 Quezon Avenue, Lucena City
Balagtas, Bulacan Rosario, Cavite Roxas, Isabela Tel. Nos.: (042) 373-2317
Tel. Nos.: (044) 769-4376 Tel. Nos.: (046) 437-0057 to 59 Tel. Nos.: (078) 376-0422 373-3872/80/87
769-0359 376-0434 660-7861
CAVITE-SILANG BRANCH
BULACAN-PLARIDEL BRANCH CBC Bldg., J.P Rizal St. LA TRINIDAD BRANCH MABALACAT-DAU BRANCH
CBC Bldg., Cagayan Valley Road, Poblacion, Silang, Cavite G/F SJV Bulasao Building, R.D. Policarpio Bldg., McArthur
Plaridel, Bulacan Tel. Nos.: (046) 413-5095 KM. 4, La Trinidad, Benguet Highway, Dau, Mabalacat, Pampanga
Tel. Nos.: (044) 931-2332 413-4826; 413-5500 Tel. Nos.: (074) 422-2065/2590 Tel. Nos.: (045) 892-4969
325-0069 413-5417 309-1663 892-6040

BULACAN-STA. MARIA BRANCH CLARK FREEPORT ZONE BRANCH LA UNION-AGOO BRANCH MALOLOS CITY BRANCH
J.P Rizal corner C. de Guzman St., Stotsenberg Lifestyle Center, National Highway, San Jose Norte, G/F Graceland Mall, BSU Grounds,
Poblacion, Sta. Maria Quirino Sr. cor. N. Aquino Streets, Agoo, La Union McArthur Highway, Guinhawa,
Tel. Nos.: (044) 288-2006 Clark Freeport Zone, Angeles City, Tel. Nos.: (072) 682-0350; Malolos City, Bulacan
815-2951; 913-0334 Pampanga 682-0391 Tel. Nos.: (044) 794-5840
Tel. Nos.: (045) 499-8060 662-2013
CABANATUAN CITY BRANCH 499-8062; 499-8063 LA UNION-SAN FERNANDO
Melencio cor. Sanciangco Sts. BRANCH MARILAO BRANCH
Cabanatuan City DAET BRANCH Roger Pua Phee Building, G/F, SM City Marilao, KM. 21,
Tel. Nos.: (044) 600-4265 Vinzons Avenue, Daet, National Highway, Brgy. 3, Brgy. Ibayo, Marilao, Bulacan
463-0935 to 36 Camarines Norte San Fernando, La Union Tel. Nos.: (044) 815-8956/8957
Tel. Nos.: (054) 440-0066 Tel. Nos.: (072) 607-8931/8932
CABANATUAN-MAHARLIKA 440-0067 607-8933/8934 MARIVELES-FAB BRANCH
BRANCH Tamayo’s Building, Avenue of the
CBC Bldg. CBC Building, DAGUPAN-M.H. DEL PILAR LAGUNA-BIÑAN BRANCH Phils., Brgy. Malaya, Freeport Area of
Maharlika Highway BRANCH G/F Raja Cordelle Bldg., Bataan (FAB), Mariveles, Bataan
Cabanatuan City Carried Realty Bldg., No. 28 M.H. del National Highway, Brgy. San Vicente, Tel. Nos. (047) 633-9569
Tel. Nos.: (044) 463-8586/87 Pilar Street, Dagupan City Biñan, Laguna (047) 633-9699
463-7964; 600-3590 Tel. Nos.: (075) 523-5606 Tel. Nos.: (049) 511-3196
940-2395 522-8929; 632-0430 (02) 245-0440 MASBATE BRANCH
632-0583 Espinosa Bldg., Zurbito St.,
CALAPAN CITY BRANCH LAGUNA-CABUYAO BRANCH Masbate City, Masbate
J.P. Rizal St., San Vicente, DAGUPAN-PEREZ BRANCH G/F Centro Mall, Cabuyao City, Tel. Nos.: (056) 333-2363/65
Calapan City, Oriental Mindoro Siapno Building, Perez Boulevard, Laguna
Tel. Nos.: (043) 288-8978/8508 Dagupan City Tel. Nos.: (049) 544-2287 MEYCAUAYAN BRANCH
441-0382 Tel. Nos.: (075) 522-2562 to 64 544-2289 CBC Bldg., Malhacan Road,
Meycauayan, Bulacan
CAMALANIUGAN BRANCH DOLORES BRANCH LAGUNA-CALAMBA BRANCH Tel. Nos.: (044) 815-6889
CBC Bldg., National Highway, CBC Bldg., McArthur Highway, CBC Bldg., National Highway, 815-6961; 815-6958
Camalaniugan, Cagayan Dolores, City of San Fernando, Crossing, Calamba, Laguna
Tel. Nos.: (078) 377-2836 Pampanga Tel. Nos.: (049) 545-7134 to 38 NAGA CITY BRANCH
377-2837 Tel. Nos.: (045) 963-3413 to 15 Centro- Peñafrancia Street,
860-1780/81 LAGUNA-LOS BAÑOS BRANCH Naga City
CANDON CITY BRANCH National Road, San Antonio, Tel. Nos.: (054) 472-1359
CBC Bldg., National Road, GAPAN BRANCH Los Baños, Laguna 472-1358; 473-7920
Poblacion, Candon City, Ilocos Sur G/F Waltermart Center-Gapan, Tel. Nos.: (049) 557-3223/557-3224
Tel. Nos.: (077) 674-0574 Maharlika Highway, Brgy. Bayanihan, NUEVA ECIJA-STA. ROSA BRANCH
674-0554 Gapan, Nueva Ecija LAGUNA-SAN PEDRO BRANCH CBC Bldg., Maharlika Highway,
Tel. Nos.: (044) 486-0217 No. 365 Brgy. Nueva, National Poblacion, Sta. Rosa, Nueva Ecija
CARMONA BRANCH 486-0434; 486-0695 Highway, San Pedro City, Laguna Tel. Nos.: (044) 333-6215
CBC Bldg., Paseo de Carmona Tel. Nos.: 816-3864; 816-4862 940-1407
Brgy. Maduya, Carmona, Cavite GUAGUA BRANCH
Tel. Nos.: (046) 430-1969/1277 Yabut Building, Plaza Burgos, LAGUNA-STA. CRUZ BRANCH OCC. MINDORO-SAN JOSE BRANCH
430-3568; (02) 475-3941 Guagua, Pampanga A. Regidor St., Sta. Cruz, Laguna Liboro corner Rizal Street, San Jose,
Tel. Nos.: (045) 458-1043 Tel. Nos.: (049) 501-4977 Occidental Mindoro
CAUAYAN CITY BRANCH 458-1045; 458-1046 501-4107; 501-4085 Tel. Nos.: (043) 491-0095
G/F Prince Christopher Bldg., 491-0096
Maharlika Highway, ILOCOS NORTE-SAN NICOLAS LAOAG CITY BRANCH
Cauayan City, Isabela BRANCH Liberato Abadilla Street, OLONGAPO-DOWNTOWN BRANCH
Tel. Nos.: (078) 652-1849 National Highway, Brgy. 2 San Brgy. 17 San Francisco Laoag City No. 2 corner 20th St., East Bajac-Bajac,
897-1338; 652-0061 Baltazar, San Nicolas, Ilocos Norte Tel. Nos.: (077) 772-1024/27 Olongapo City
Tel. Nos.: (077) 600-0994 771-4688; 771-4417 Tel. No.: (047) 610-9826
CAVITE-DASMARIÑAS BRANCH 600-0995
G/F CBC Bldg., Gen. E. Aguinaldo LEGAZPI CITY BRANCH PANGASINAN-ALAMINOS CITY
Highway, Dasmariñas, Cavite IRIGA CITY G/F Emma Chan Bldg. BRANCH
Tel. Nos.: (046) 416-5036/39/40 Highway 1, JP Rizal St., San Roque, F. Imperial St., Legazpi City Marcos Avenue, Brgy. Palamis,
(02) 584-4083 Iriga City, Camarines Sur Tel. Nos.: (052) 480-6048 Alaminos City, Pangasinan
Tel. Nos.: (054) 299-7000 480-6519; 214-3077 Tel. Nos.: (075) 551-3859
CAVITE-IMUS BRANCH 456-1498 654-0286
G/F CBC Bldg., Nueno Avenue LIPA CITY-TAMBO BRANCH
Tanzang Luma, Imus, Cavite ISABELA-ILAGAN BRANCH Tambo, Lipa City, Batangas PANGASINAN-BAYAMBANG
Tel. Nos.: (046) 970-8726/64 G/F North Star Mall, Maharlika Tel. Nos.: (043) 757-6331 BRANCH
471-2637; 471-7094 Highway, Brgy. Alibagu, Ilagan, Isabela 757-6332 CBC Bldg., No. 91, Poblacion Sur,
Tel. Nos.: (078) 323-0179 Bayambang, Pangasinan
CAVITE-MOLINO BRANCH 323-0178 Tel. Nos.: (075) 632-5776
Patio Jacinto, Molino Road, 632-5775
Molino 3, Bacoor, Cavite
Tel. Nos.: (046) 431-0632
484-6295
218 China Bank Annual Financial and Sustainability Report 2017

CHINA BANK BRANCHES

PANGASINAN-ROSALES BRANCH SM CITY LIPA BRANCH TARLAC BRANCH VISAYAS
CBC Bldg., Calle Dewey, G/F (Units 1111-1113) SM City Lipa, CBC Bldg., Panganiban near corner
Rosales, Pangasinan Ayala Highway, Brgy. Maraouy, F. Tanedo Street, Tarlac City, Tarlac ANTIQUE-SAN JOSE BRANCH
Tel. Nos.: (075) 633-3852 Lipa City, Batangas Tel. Nos.: (045) 982-7771 to 75 Felrosa Building, Gen. Fullon St.
633-3853 Tel. Nos.: (043) 784-0212 corner Cerdena St., San Jose, Antique
784-0213 TARLAC-BAMBAN BRANCH Tel. Nos.: (036) 540-7095
PANGASINAN-URDANETA BRANCH National Road, Bgry. Anupul, 540-7097
EF Square Bldg., McArthur Highway, SM CITY NAGA BRANCH Bamban, Tarlac
Poblacion Urdaneta City, Pangasinan SM City Naga, CBD II, Tel. Nos.: (045) 925-0402 BACOLOD-ARANETA BRANCH
Tel. Nos.: (075) 632-2637 Brgy. Triangulo, Naga City CBC Bldg., Araneta corner
632-0541; 656-2022 Tel. Nos.: (054) 472-1366 TARLAC-CAMILING BRANCH San Sebastian Streets, Bacolod City
656-2618 472-1367 Savewise Super Market, Tel. Nos.: (034) 435-0247/48
Poblacion, Camiling, Tarlac 433-3818/19
PASEO DE STA. ROSA BRANCH SM CITY OLONGAPO BRANCH Tel. Nos.: (045) 491-6445 433-7152/53; 709-1618
Unit 3, Paseo 5, Paseo de Sta. Rosa, SM City Olongapo, Magsaysay Dr. 934-5085; 934-5086
Sta. Rosa City, Laguna cor. Gordon Ave., Brgy. Pag-asa, BACOLOD-LACSON BRANCH
Tel. Nos.: (049) 837-1831 Olongapo City, Zambales TARLAC-CONCEPCION BRANCH Soliman Bldg., Lacson cor.
502-3016; 502-2859 Tel. Nos.: (047) 602-0039 G/F Descanzo Bldg., F. Timbol St. Luzurriaga Sts., Bacolod City,
827-8178; (02) 420-8042 602-0040 San Nicolas Poblacion, Negros Occidental
Concepcion, Tarlac Tel. Nos.: (034) 474-2451
QUEZON-CANDELARIA BRANCH SM CITY PAMPANGA BRANCH Tel. Nos.: (045) 491-2987 474-2452
Pan Philippine Highway cor. Del Valle Unit AX3 102, Building 4, SM City 491-3028
Street, Poblacion, Candelaria, Quezon Pampanga, Mexico, Pampanga BACOLOD-LIBERTAD BRANCH
Tel. Nos.: 797-4298; 797-4299 Tel. Nos.: (045) 455-0304/0305 TARLAC-PANIQUI BRANCH Libertad Street, Bacolod City,
455-0306/0307 Cedasco Building, M. H del Pilar St., Negros Occidental
SAN FERNANDO BRANCH Poblacion, Paniqui, Tarlac Tel. Nos.: (034) 435-1645
CBC Bldg., V. Tiomico Street SM CITY SAN JOSE DEL MONTE Tel. Nos.: (045) 491-8465 435-1646
City of San Fernando, Pampanga BRANCH 491-8464
Tel. Nos.: (045) 961-3542/49 UGF SM City San Jose Del Monte, BACOLOD-MANDALAGAN BRANCH
963-5458 to 60 San Jose Del Monte City, Bulacan TARLAC-SAN RAFAEL BRANCH Lacson Street, Mandalagan,
961-5651; 860-1925 Tel. Nos.: (044) 913-1562 CBC Bldg., Brgy. San Rafael, Bacolod City, Negros Occidental
892-3211 (02) 985-3067 Tarlac City, Tarlac Tel. Nos.: (034) 441-0500
Tel. Nos.: (045) 456-0150 441-0388; 709-0067
SAN FERNANDO-SINDALAN SM CITY SAN PABLO BRANCH 456-0121
BRANCH G/F SM City San Pablo National BACOLOD-NORTH DRIVE BRANCH
Jumbo Jenra Sindalan, Brgy. Sindalan, Highway, Brgy. San Rafael, THE DISTRICT IMUS BRANCH Anesa Bldg., B.S. Aquino Drive,
San Fernando City, Pampanga San Pablo City, Laguna G/F The District Imus, Anabu II, Bacolod City
Tel. Nos.: (045) 866-5464 Tel. Nos.: (049) 521-0071 to 72 Imus, Cavite Tel. Nos.: (034) 435-0063 to 65
455-0569 Tel. Nos.: (046) 416-1417 709-1658
SM CITY STA. ROSA BRANCH 416-4294
SAN JOSE CITY BRANCH G/F SM City Sta. Rosa, Bo. Tagapo, BAYBAY BRANCH
Maharlika Highway, Sta. Rosa, Laguna TRECE MARTIRES Magsaysay Avenue, Baybay, Leyte
Brgy. Malasin, San Jose City Tel. Nos.: (049) 534-4640/4813 G/F Waltermart, Governor’s Drive Tel. Nos.: (053) 335-2899/98
Tel. Nos.: (044) 958-9094 corner City Hall Road, 563-9228
958-9096; 511-2898 SOLANO BRANCH Brgy. San Agustin, Trece Martires City,
National Highway, Brgy. Quirino, Cavite BORONGAN BRANCH
SAN PABLO CITY BRANCH Solano, Nueva Vizcaya Tel. Nos.: (046) 460-4897 Balud II, Poblacion, Borongan
M. Paulino Street, San Pablo City Tel. Nos.: (078) 326-6559/60/61 460-4898; 460-4899 Eastern Samar
Tel. Nos.: (049) 562-5481 to 84 Tel. Nos.: (055) 560-9948
SORSOGON BRANCH TUGUEGARAO CITY BRANCH 560-9938; 261-5888
SANTIAGO CITY CBC Bldg., Ramon Magsaysay Ave., A. Bonifacio Street, Tuguegarao,
Navarro Bldg., Maharlika Highway Sorsogon City, Sorsogon Cagayan CALBAYOG CITY BRANCH
near corner Bayaua St., Tel. Nos.: (056) 211-1610 Tel. Nos.: (078) 844-0175 Cajurao cor. Gomez Sts., Balud,
Santiago City, Isabela 421-5105 844-0831; 846-1709 Calbayog Dist., Calbayog City, Samar
Tel. Nos.: (078) 682-7024 to 26 Tel. Nos.: (055) 209-1358
SUBIC BAY FREEPORT ZONE TUGUEGARAO-BALZAIN BRANCH 533-8842
SM CITY BACOOR BRANCH BRANCH Balzain Highway,
LGF SM City Bacoor CBC Bldg., Subic Bay Gateway Park, Tuguegarao City, Cagayan CATARMAN BRANCH
Tirona Highway corner Aguinaldo Rizal Highway, Subic Bay Freeport Tel. Nos.: (078) 396-2207 Cor. Rizal & Quirino Sts.,
Highway, Bacoor, Cavite Zone 396-2208 Jose P. Rizal St., Catarman,
Tel. Nos.: (046) 417-0572/0746 Tel. Nos.: (047) 252-1568 Northern, Samar
417-0623/0645 252-1575; 252-1591 VIGAN CITY BRANCH Tel. Nos.: (055) 251-8802/8821
Burgos Street near corner Rizal Street, 500-9921
SM CITY CABANATUAN TABACO CITY BRANCH Vigan City, Ilocos Sur
UGF SM City Cabanatuan, Ziga Ave. corner Berces Street, Tel. Nos.: (077) 722-6968 CATBALOGAN BRANCH
Maharlika Highway, Tabaco City, Albay 674-2272 CBC Bldg., Del Rosario St.
Brgy. H. Concepcion, Tel. Nos.: (052) 487-7150 cor. Taft Avenue, Catbalogan City,
Cabanatuan City, Nueva Ecija 830-4178 VIRAC BRANCH Samar
Tel. Nos.: (044) 958-1916 Gogon, Virac, Catanduanes Tel. Nos.: (055) 251-2897/98
486-5501 TAGAYTAY CITY BRANCH Tel. Nos.: (052) 811-4321 543-8121
Foggy Heights Subdivision, 811-4322
SM CITY CLARK BRANCH E. Aguinaldo Highway, CEBU-AYALA BRANCH
G/F (Units 172-173) SM City Clark, Tagaytay City, Cavite ZAMBALES-BOTOLAN BRANCH Unit 101 G/F Insular Life,
M. Roxas St., CSEZ, Angeles City, Tel. Nos.: (046) 483-0609 National Highway, Brgy. Batonlapoc, Cebu Business Center, Mindanao Ave.
Pampanga 483-0608 Botolan, Zambales cor. Biliran Road, Cebu Business Park,
Tel. Nos.: (045) 499-0252 to 54 Tel. Nos.: (047) 811-1322 Cebu City
TALAVERA BRANCH 811-1372 Tel. Nos.: (032) 262-1839
SM CITY DASMARIÑAS BRANCH CBC Bldg., Marcos District, 260-6524
LGF SM City Dasmariñas, Governor’s Talavera, Nueva Ecija
Drive, Pala-pala, Dasmariñas, Cavite Tel. Nos.: (044) 940-2620
Tel. No.: (046) 424-1134 940-2621
 Directories 219

CEBU-BANAWA BRANCH CEBU-LAPU LAPU CENTRO BRANCH CEBU-SUBANGDAKU BRANCH ORMOC CITY BRANCH
G/F The J Block, Duterte St., Banawa, G.Y dela Serna St., Opon, Poblacion, G/F A.D. Gothong I.T. Center, CBC Bldg., Real cor. Lopez
Guadalupe, Cebu City, Cebu Lapu-Lapu City, Cebu Subangdaku, Mandaue City, Cebu Jaena Sts., Ormoc City, Leyte
Tel. Nos.: (032) 340-9561 Tel. Nos.: (032) 231-3247 Tel. Nos.: (032) 344-6561 Tel. Nos.: (053) 255-3651 to 53
416-3827 493-5078 422-3664; 344-6621
PUERTO PRINCESA CITY BRANCH
CEBU-BANILAD BRANCH CEBU-LAPU LAPU PUSOK BRANCH CEBU-TALAMBAN BRANCH Malvar Street near corner Valencia
CBC Bldg., AS Fortuna St., G/F Goldberry Suites, President Unit UG-7 Gaisano Grand Mall, Street, Puerto Princesa City, Palawan
Banilad, Cebu City Quezon National Highway, Pusok, Brgy. Talamban, Cebu City Tel. Nos.: (048) 434-9891-93
Tel. Nos.: (032) 346-5870/81 Lapu-Lapu City Tel. Nos.: (032) 236-8944
416-1001 Tel. Nos.: (032) 340-2098 418-0796 ROXAS CITY BRANCH
494-0631; 340-2099 1063 Roxas Ave. cor. Bayot Drive,
CEBU-BASAK-SAN NICOLAS CEBU-TALISAY BRANCH Roxas City, Capiz
BRANCH CEBU-MAGALLANES BRANCH CBC Bldg., 1055 Cebu South National Tel. Nos.: (036) 621-3203
N. Bacalso Ave., Basak, San Nicolas, CBC Bldg., Magallanes corner Road, Bulacao, Talisay City, Cebu 621-1780; 522-5775
Cebu City, Cebu Jakosalem Sts., Cebu City Tel. Nos.: (032) 272-3342/48
Tel. Nos.: (032) 340-8113 Tel. Nos.: (032) 255-0022/23/25/28 491-8200 SILAY CITY BRANCH
414-4742 253-0348; 255-6093 Rizal St., Silay City, Negros Occidental
255-0266; 412-1877 DUMAGUETE CITY BRANCH Tel. Nos.: (034) 714-6400
CEBU-BOGO BRANCH CBC Bldg., Real Street 495-5452; 495-0480
Sim Building, P. Rodriguez Street, CEBU-MANDAUE BRANCH Dumaguete City, Negros Oriental
Bogo City, Cebu SV Cabahug Building, Tel. Nos.: (035) 422-8058 TACLOBAN CITY BRANCH
Tel. Nos.: (032) 434-7119 155-B SB Cabahug Street, 225-5442; 225-5441 Uytingkoc Building, Avenida
266-3251 Brgy. Centro, Mandaue City, Cebu 225-4284; 225-5460 Veteranos, Tacloban City, Leyte
Tel. Nos.: (032) 346-5636/37 Tel. Nos.: (053) 325-7706 to 08
CEBU BUSINESS CENTER 346-2083; 344-4335 ILOILO-IZNART BRANCH 523-7700/7800
CBC Bldg., Samar Loop corner Panay 422-8188 G/F John A. Tan Bldg.,
Road, Cebu Business Park, Cebu City Iznart St., Iloilo City TAGBILARAN CITY BRANCH
Tel. Nos.: (032) 239-3760 CEBU-MANDAUE-CABANCALAN Tel. Nos.: (033) 337-9477 G/F Melrose Bldg., Carlos P. Garcia
to 239-3764 BRANCH 509-9868; 300-0644 Avenue, Tagbilaran City, Bohol
M.L. Quezon St., Cabancalan, Tel. Nos.: (038) 501-0688
CEBU-CARCAR BRANCH Mandaue City, Cebu ILOILO-JARO BRANCH 501-0677; 411-2484
Dr. Jose Rizal St., Poblacion I, Tel. Nos.: (032) 421-1364 CBC Building, E. Lopez St.
Carcar, Cebu 505-9908 Jaro, Iloilo City, Iloilo MINDANAO
Tel. Nos.: (032) 487-8103 Tel. Nos.: (033) 320-3738
487-8209; 266-7093 CEBU-MANDAUE-J CENTRE MALL 320-3791 BUTUAN CITY BRANCH
BRANCH CBC Building, J.C. Aquino Avenue
CEBU-CONSOLACION BRANCH LGF J Centre Mall, A.S Fortuna Ave., ILOILO-MABINI BRANCH Butuan City
G/F SM City Consolacion, Mandaue City, Cebu A. Mabini Street, Iloilo City Tel. Nos.: (085) 341-5159
Brgy. Lamac, Consolacion, Cebu Tel. Nos.: (032) 520-2898 Tel. Nos.: (033) 335-0295 341-7445
Tel. Nos.: (032) 260-0024 421-1567 335-0370; 509-0599 (085) 815-3454/55
260-0025 225-2081
CEBU-MANDAUE NORTH ROAD ILOILO-MANDURRIAO BRANCH
CEBU-ESCARIO BRANCH BRANCH Benigno Aquino Ave., Brgy. San Rafael, CAGAYAN DE ORO-CARMEN
Units 3 & 5 Escario Central, G/F Units G1-G3, Basak Commercial Mandurriao, Iloilo City, Iloilo BRANCH
Escario Road, Cebu City, City Building (Kel-2) Basak, Mandaue City Tel. Nos.: (033) 333-3988 G/F GT Realty Building,
Tel. Nos.: (032) 416-5860 Tel. Nos.: (032) 345-8861 333-4088 Max Suniel St. corner Yakal St.,
520-9229 345-8862; 420-6767 Carmen, Cagayan de Oro City
ILOILO-RIZAL BRANCH Tel. Nos.: (08822) 723-091
CEBU-F. RAMOS BRANCH CEBU-MANDAUE NRA BRANCH CBC Building, Rizal cor. Gomez Sts., 724-372
F. Ramos Street, Cebu City G/F Bai Hotel Cebu Ouano Ave. Brgy. Ortiz, Iloilo City (088) 858-3902/03
Tel. Nos.: (032) 253-9463 cor. Seno Blvd., North Reclamation Tel. Nos.: (033) 336-0947
254-4867; 412-5858 Area, Mandaue City, Cebu 338-2136; 509-8838 CAGAYAN DE ORO-DIVISORIA
Tel. No.: (032) 272-6985 BRANCH
CEBU-GORORDO BRANCH KALIBO BRANCH RN Abejuela St., South Divisoria,
No 424. Gorordo Ave., CEBU-MINGLANILLA BRANCH Aklan Catholic College, Cagayan de Oro City
Bo. Camputhaw, Lahug District, Unit 9, Plaza Margarita Lipata, Arch. Gabriel M. Reyes St., Tel. Nos.: (08822) 722-641
Cebu City, Cebu Minglanilla, Cebu 5600, Kalibo, Aklan (088) 857-5759
Tel. Nos.: (032) 414-0509 Tel. Nos.: (032) 239-7234 Tel. Nos.: (036) 500-8088
239-8654 490-6025 500-8188; 268-2988 CAGAYAN DE ORO-LAPASAN
BRANCH
CEBU-GUADALUPE BRANCH CEBU-NAGA BRANCH MAASIN CITY BRANCH CBC Building, Claro M. Recto Avenue,
CBC Bldg., M. Velez Street, cor. Leah’s Square, National South G/F SJC Bldg., Tomas Oppus St., Lapasan, Cagayan de Oro City
V. Rama Ave., Guadalupe, Cebu City Highway, East Poblacion, Brgy. Tunga-Tunga, Maasin City, Tel. Nos.: (08822) 722-240
Tel. Nos.: (032) 254-7964; 254-8495 Naga City, Cebu Southern Leyte 724-540; 726-242
254-1916 Tel. Nos.: (032) 238-7623 Tel. Nos.: (053) 381-2287 (088) 856-1325/1326
489-8218 381-2288; 570-8488
CEBU-IT PARK BRANCH CAGAYAN DE ORO-PUERTO
G/F The Link, Cebu IT Park, CEBU-SM CITY BRANCH NEGROS OCC.-KABANKALAN BRANCH
Apas, Cebu City, Cebu Upper G/F, SM City Cebu, Juan Luna BRANCH Luis A.S. Yap Building, Zone 6,
Tel. Nos.: (032) 266-2559 cor. A. Soriano Avenue, Cebu City CBC Building, National Highway, Brgy. Puerto, Cagayan de Oro City,
262-0982 Tel. Nos.: (032) 232-0754/55 Brgy. 1, Kabankalan, Negros Occidental Misamis Oriental
231-9140; 412-9699 Tel. Nos.: (034) 471-3349; 471-3364 Tel. Nos.: (088) 880-7183
CEBU-LAHUG BRANCH 471-3738 880-7185
JY Square Mall, No. 1 Salinas Dr., CEBU-SM SEASIDE CITY BRANCH
Lahug, Cebu City LGF SM Seaside City Cebu, NEGROS OCC.-SAN CARLOS BRANCH
Tel. Nos.: (032) 417-2122; 233-0977 South Road Properties, Rizal corner Carmona Streets,
234-2062 6000 Cebu City, Cebu San Carlos, Negros Occidental
Tel. No.: (032) 262-1772 Tel. Nos.: (034) 312-5818; 312-5819
729-3276
 220 China Bank Annual Financial and Sustainability Report 2017

CHINA BANK BRANCHES

CDO-GAISANO CITY MALL BRANCH DAVAO-STA. ANA BRANCH KORONADAL CITY BRANCH SOON TO OPEN
G/F Gaisano City Mall, R. Magsaysay Avenue Gen. Santos Drive corner Aquino St.,
C. M. Recto corner Corrales Extension, corner F. Bangoy Street, Koronadal City, South Cotabato ARNAIZ AVE. BRANCH
Cagayan de Oro City Sta. Ana District, Davao City Tel. Nos.: (083) 228-7838 United Life Assurance Building,
Tel. Nos.: (08822) 745-877 Tel. Nos.: (082) 227-9501/51 228-7839; 520-1788 A. Arnaiz Ave. (Pasay Road),
745-880 (088) 880-1051 227-9601 Makati City
880-1052 221-1054/55; 221-6672 MALAYBALAY CITY BRANCH
Bethelda Building, Sayre Highway, BATANGAS CITY-KUMINTANG
COTABATO CITY BRANCH DAVAO-SM LANANG BRANCH Malaybalay City, Bukidnon ILAYA BRANCH
No. 76 S.K. Pendatun Avenue, G/F SM Lanang Premier, Tel. No.: (088) 813-3372 CBC Bldg. (for construction),
Cotabato City, Maguindanao J. P. Laurel Avenue, Davao City Brgy. Kumintang Ilaya,
Tel. Nos.: (064) 421-4685/4653 Tel. Nos.: (082) 285-1064 MIDSAYAP BRANCH Batangas City, Batangas
285-1053 CBC Bldg., Quezon Ave.,
DAVAO-BAJADA BRANCH Poblacion 2, Midsayap, Cotabato DILIMAN-MATALINO BRANCH
B.I. Zone Building, J.P. Laurel Ave., DAVAO-TAGUM BRANCH Tel. No.: (064) 229-9700 Matalino Street, Diliman, Quezon City
Bajada, Davao City 153 Pioneer Avenue,
Tel. Nos.: (082) 221-0184 Tagum, Davao del Norte OZAMIZ CITY BRANCH GREENHILLS-ANNAPOLIS BRANCH
221-0319 Tel. Nos.: (084) 655-6307/08 Gomez corner Kaamino Streets, Annapolis St., Greenhills, San Juan City
400-2289/90 Ozamiz City
DAVAO-BUHANGIN BRANCH Tel. Nos.: (088) 521-2658 to 60 JUPITER BRANCH
Buhangin Road, Davao City DAVAO-TORIL BRANCH Jupiter Street, Makati City
Tel. Nos.: (082) 300-8335 McArthur Highway corner PAGADIAN CITY BRANCH
227-9764; 221-5970 St. Peter Street, Crossing Bayabas, Marasigan Building, F.S. Pajares Avenue, MANDALUYONG - BONI AVE.
Toril, Davao City Pagadian City BARANGKA
DAVAO-CALINAN BRANCH Tel. Nos.: (082) 303-3068; 295-2334 Tel. Nos.: (062) 215-2781/82 Bonifacio Ave. cor. San Roque St.,
Davao-Bukidnon National Highway – 295-2332 925-1116 Barangka Ilaya, Mandaluyong City
Riverside, Calinan Proper, Davao City
Tel. Nos.: (082) 224-9229 DIPOLOG CITY BRANCH SM CDO DOWNTOWN PREMIER PUREZA BRANCH
(082) 224-9135 CBC Building, Gen. Luna corner (formerly Cagayan De Oro-Borja Solicarel Bldg., R. Magsaysay Blvd.,
Gonzales Streets, Dipolog City Branch) Sta. Mesa, Manila
DAVAO-INSULAR VILLAGE BRANCH Tel. Nos.: (065) 212-6768 to 69 G/F SM CDO Downtown Premier,
(formerly Davao–Lanang Branch) 908-2008 Cagayan de Oro City QUEZON AVE.-SCT. CHUATOCO
Insular Village I, KM. 8, Lanang, Tel. Nos.: (088) 857-2212; 857-3742 BRANCH
Davao City GEN. SANTOS CITY BRANCH (088) 859-1053; 859-1054 Estuar Building, No. 880 Quezon Ave.,
Tel. Nos.: (082) 300-1892 CBC Bldg., I. Santiago Blvd., Brgy. Paligsahan, Quezon City
234-7166; 234-7165 Gen. Santos City SURIGAO CITY BRANCH
Tel. Nos.: (083) 553-1618; 552-8288 CBC Bldg., Amat St., REGALADO AVE.-WEST FAIRVIEW
DAVAO-MA-A BRANCH Barrio Washington, Surigao City, BRANCH
G/F Lapeña Building, McArthur GEN. SANTOS CITY-DADIANGAS Surigao del Norte CBC Bldg. (for construction)
Highway, Matina, Davao City BRANCH Tel. Nos.: (086) 826-3958, 826-3968 Regalado Ave. corner Bulova St.,
Tel. Nos.: (082) 295-0472 M. Roxas Ave. corner Lapu-Lapu Street, Quezon City
295-1072 Brgy. Dadiangas East, Gen. Santos City, VALENCIA BRANCH
South Cotabato A. Mabini Street, Valencia, Bukidnon SM NORTH TOWERS BRANCH
DAVAO-MATINA BRANCH Tel. No.: (083) 552-8576 Tel. Nos.: (088) 828-2048/49 SM City North EDSA North Towers,
KM. 4 McArthur Highway, 222-2356; 222-2417 SM City North EDSA Complex,
Matina, Davao City ILIGAN CITY BRANCH Quezon City
Tel. Nos.: (082) 297-4288 Lai Building, Quezon Avenue Extension ZAMBOANGA CITY BRANCH
297-4455; 297-5880/81 Pala-o, Iligan City CBC Bldg., Gov. Lim Avenue corner STO. CRISTO-CM RECTO BRANCH
Tel. Nos.: (063) 221-5477/79 Nuñez Street, Zamboanga City 858 Sto. Cristo Street, Manila
DAVAO-MONTEVERDE BRANCH 492-3009; 221-3009 Tel. Nos.: (062) 991-2978/79
Doors 1 & 2, Sunbright Bldg., 991-1266 TAFT AVE.-NAKPIL BRANCH
Monteverde Ave., Davao City ILIGAN CITY-SOLANA DISTRICT G Square Taft Ave. corner Nakpil St.,
Tel. Nos.: (082) 225-3680 BRANCH ZAMBOANGA-GUIWAN BRANCH Malate, Manila
225-3679 Andres Bonifacio Highway, G/F Yang’s Tower,
Brgy. San Miguel, Iligan City, M.C. Lobregat National Highway,
DAVAO-PANABO CITY BRANCH Lanao del Norte Guiwan, Zamboanga City
PJ Realty, Barangay New Pandan, Tel. Nos.: (063) 224-7664; 224-7665 Tel. Nos.: (062) 984-1751; 984-1754
Panabo City, Davao del Norte
Tel. Nos.: (084) 628-4057 KIDAPAWAN CITY BRANCH ZAMBOANGA-SAN JOSE GUSU
628-4065 G/F EVA Building, Quezon Blvd. BRANCH
cor. Tomas Claudio Street, Yubenco Supermarket, San Jose Gusu,
DAVAO-RECTO BRANCH National Highway, Kidapawan City Zamboanga City, Zamboanga del Sur
CBC Bldg., C.M. Recto Ave. Tel. Nos.: (064) 278-3509; 278-3510 Tel. Nos.: (062) 995-6154; 955-6155
cor. J. Rizal St., Davao City
Tel. Nos.: (082) 221-4481/ 7028
221-6021/6921/4163
226-3851; 226-2103
 Directories 221

CHINA BANK SAVINGS BRANCHES

METRO MANILA AND RIZAL BANGKAL FILINVEST CORPORATE CITY MAKATI–JP RIZAL
Amara Building BC Group Building, East Asia Drive 882 J.P. Rizal Street
ACACIA ESTATES–SAVEMORE 1661 Evangelista Street near corner Commerce Avenue Poblacion, Makati City
Acacia Taguig Town Center Bangkal, Makati City Filinvest Corporate City Tel. Nos.: (02) 890-1026; 890-1027
Acacia Estates, Ususan, Taguig City Tel. Nos.: (02) 621-3459; 621-3461 Alabang, Muntinlupa City Mobile No.: 0917 510-5919
Tel. Nos: (02) 633-5472; 633-3245 Tel. No.: (02) 511-1152
BINONDO–JUAN LUNA MALABON–SAVEMORE
ADRIATICO–HYPERMARKET 694-696 Juan Luna Street FTI–TAGUIG HYPERMARKET Francis Market, Governor Pascual
M.H. Del Pilar, Adriatico Binondo, Manila DBP Avenue, Food Terminal corner M.H. Del Pilar Street,
Malate, Manila Tel Nos.: (02) 254-7337; 964-1327 Incorporated, Western Bicutan, Malabon City
Tel. No.: (02) 525-6286 Mobile No.: 0917 510-6072 Taguig City Tel. Nos.: (02) 931-6326; 931- 6323
Mobile No.: 0917 580-7061 Tel. Nos.: (02) 834-0408; 507-4090
BLUMENTRITT MANDALUYONG
ALABANG HILLS Blumentritt Street, G. ARANETA AVENUE Paterno’s Building
Alabang Commercial Citi Arcade near Oroquieta Street, 195 G. Araneta Avenue 572 New Panaderos Street
Don Jesus Boulevard Sta. Cruz, Manila Quezon City Brgy.Pag-asa, Mandaluyong City
Alabang, Muntinlupa City Tel. no.: (02) 968-4759 Tel No.: 978-6448 Tel. Nos.: (02) 238-3745, 238-3744
Tel. Nos.: (02) 828-4854 Mobile No.: 0917 827-3205 Mobile No.: 0917 828-7829
403-2801 MANDALUYONG–SHAW
BONI AVENUE GIL PUYAT–BAUTISTA BOULEVARD
AMANG RODRIGUEZ–SAVEMORE Raymond Tower Boni Lot 25 Blk 74 Bautista Street corner 500 Shaw Tower, 500 Shaw Boulevard
Amang Rodriguez Avenue 615 Boni Avenue, Plainview, Sen. Gil Puyat Avenue, Makati Mandaluyong City
corner Evangelista Street Mandaluyong City Tel. No.: 838-2312 Tel. Nos.: (02) 941-9412; 941-9231
Santolan, Pasig City
Tel. No.: (02) 654-0564 BUENDIA GREENHILLS–ORTIGAS AVENUE MANILA–STA.ANA SAVEMORE
Mobile No.: 0917 510-5962 CBS Building VAG Building, Ortigas Avenue Savemore Pedro Gil Street
314 Sen. Gil Puyat Avenue, Makati City Greenhills, San Juan City Sta. Ana, Manila
AMORANTO AVENUE Tel. No.: (02) 812-9359 Tel. Nos.: (02) 721-0105; 724-752 Tel. Nos.: (02) 523-8606
Unit 101 R Place Building Trunkline: (02) 884-7600 987-4975; 523-8574
255 N.S Amoranto Sr. Avenue locals 3900 to 3902 GREENHILLS–WILSON
Quezon City and 7645 219 Wilson Street MANILA–STA. CRUZ
Tel. Nos.: (02) 966-9075; 251-6592 Greenhills, San Juan City Multi-Pacific Business Inc. (MBI)
Mobile. No.: 0917 805-6964 COMMONWEALTH AVENUE Tel .Nos.: (02) 748-7625 Building, Plaza Sta. Cruz,
JocFer Building 584-5946 Sta. Cruz, Manila
ANGONO Commonwealth Avenue Tel. Nos.: (02) 596-5826; 618-2241
Manila East Road corner Brgy. Holy Spirit, Quezon City KALOOKAN
Don Benito Street Tel. Nos.: (02) 957-0559; 282-5946 Augusto Building, Rizal Avenue MARIKINA
Brgy. San Roque, Angono, Rizal 282-5975; 988-9555 Grace Park, Kalookan City 33 Bayan-Bayanan Avenue
Tel. No.: (02) 651-1782 loc 4857 Tel. Nos.: (02) 365-7593 Brgy. Concepcion 1, Marikina City
Mobile No.: 0917 521-3469 363-2752 Tel. Nos.: (02) 477-2445; 477-2443
ANONAS–SAVEMORE Mobile No.: 0917 572-9118
Maamo Street, Road Lot 30 CUBAO MARIKINA–GIL FERNANDO AVE.
V. Luna Street and Anonas Extension Fernandina 88 Condominium KALOOKAN–MABINI CTP Building
Sikatuna, Quezon City 222 P. Tuazon Boulevard AJ Building Gil Fernando Avenue, Marikina City
Tel. No.: (02) 351-4928 Araneta Center, Cubao, Quezon City 353 A. Mabini Street, Kalookan City Tel. Nos.: (02) 681-2810; 645-8169
Mobile No.: 0917 863-6157 Tel. Nos.: (02) 913-5209; 913-4903 Tel. Nos.: (02) 961-2628; 709-3435
McKINLEY HILL
ANTIPOLO DEL MONTE KATIPUNAN AVENUE Commerce & Industry Plaza
EMS Building, M.L. Quezon 392 Del Monte Avenue One Burgundy Condominium Upper Basement
corner F. Dimailig Street, Brgy. Sienna, Quezon City Katipunan Avenue, Loyola Heights McKinley Town Center
Brgy. San Roque Antipolo City, Rizal Tel. No.: (02) 741-2447 Quezon City Fort Bonifacio, Taguig City
Tel. No.: (02) 697-1066 Tel. Nos.: (02) 931-1123; 211-7882 Tel. Nos.: (02) 798-0357; 403-9413
DIVISORIA DRAGON8 Mobile No.: 0917 628-3318
ARANETA CENTER C.O.D.– Dragon 8 Shopping Center, MUÑOZ JACKMAN–SAVEMORE
SAVEMORE 3/F C.M Recto Avenue corner LAGRO Jackman Plaza, Lower Ground Floor
Gen. Romulo Street, Araneta Center Dagupan Street, Divisoria, Manila Bonaza Building EDSA – Muñoz, Quezon City
Cubao, Quezon City Tel. Nos.: (02) 616-1146; 247-3300 Quirino Highway, Greater Lagro Tel. Nos.: (02) 442-6282; 442-4829
Tel. No.: (02) 921-3149 247-3299 Novaliches, Quezon City Mobile No.: 0917 863-6069
Mobile No.: 0917 809-9670 Mobile No.: 0917 317-5106 Tel. Nos.: (02) 936-4988; 461-7214
NEPA-Q MART–SAVEMORE
AYALA AVENUE E. RODRIGUEZ SR.–HEMADY LAS PIÑAS 770 Saint Rose Building
VGP Center Hemady Square, E. Rodriguez Avenue Parco Supermarket EDSA and K-G Street
6772 Ayala Avenue, Makati City corner Doña Hemady Street J. Aguilar Avenue, Las Piñas City West Kamias, Quezon City
Tel. Nos.: (02) 988-9555 New Manila, Quezon City Tel. Nos.: (02) 548-0368; 548-0367 Tel. Nos.: (02) 351-4883; 351-4883
loc. 8101-8104 Tel .Nos.: (02) 987- 4966
531-9676 LAS PIÑAS–ALMANZA UNO NINOY AQUINO AVENUE
BACLARAN Mobile No.: 0917 808-5214 Alabang - Zapote Road Skyfreight Building,
3751 Quirino Avenue Almanza Uno, Las Piñas City G/F Ninoy Aquino Avenue
corner Sta. Rita Street ESPAÑA–SUNMALL Tel. Nos.: (02) 551-4724; 966-9001 corner Pascor Drive, Parañaque City
Baclaran, Parañaque City Sun Mall, España Boulevard Mobile No.: 0917 817-3526 Tel. Nos.: (02) 843-2447; 239-0574
Tel Nos.: 975-2172; 816-1956 corner Mayon Street
Mobile No.: 0917 703-2503 Brgy. Sta. Teresita, Quezon City MAKATI–CHINO ROCES NOVA PLAZA MALL–SAVEMORE
Tel. Nos.: (02) 244-2477; 987-4962 Graceland Plaza Novaliches Plaza Mall
BANAWE Mobile No: 0917 810-3097 2176 Chino Roces Avenue Quirino Highway corner Ramirez Street
247-249 Banawe Street Pio del Pilar, Makati City Novaliches Proper, Quezon City
Sta. Mesa Heights FELIX HUERTAS–JT CENTRALE Tel. Nos.: (02) 831-0477; 964-1322 Tel. Nos.: (02) 983-1512; 983-1511
Brgy. Lourdes, Quezon City JT Centrale Mall, G/F Unit 103 831-0486
Tel. Nos.: (02) 412-6249; 256-4941 Fugoso corner Felix Huertas Street
Sta. Cruz, Manila
Mobile No: 0917 5538446
222 China Bank Annual Financial and Sustainability Report 2017

CHINA BANK SAVINGS BRANCHES

ORTIGAS–CITRA PATEROS TAYUMAN BALANGA–D.M. BANZON
Unit B1, OMM Citra Building 500 Elisco Road 1925-1929 Rizal Avenue D.M. Banzon Street
San Miguel Avenue Sto. Rosario, Pateros City near corner Tayuman Street Balanga City, Bataan
Ortigas Center, Pasig City Tel. Nos.: (02) 641-9556 Sta. Cruz, Manila Tel. Nos.: (047) 237-3667
Tel. Nos.: (02) 637-9778; 637-9824 Tel. Nos.: (02) 230-3091; 247-0683 237-3666
637-2018 PATEROS–ALMEDA 586-1618
120 M. Almeda Street BALIBAGO
ORTIGAS CENTER Pateros City TIMOG JEV Building, MacArthur Highway
Hanston Square, San Miguel Avenue Tel. Nos.: (02) 641-6768; 641-6760 Jeinkinsen Towers Condominium Balibago, Angeles City
Ortigas Center, Pasig City 80 Timog Avenue, Quezon City Tel. Nos.: (045) 892-3325
Tel. Nos.: (02) 654-1912; 477-3439 PEDRO GIL–SAVEMORE Tel. Nos.: (02) 371-8303; 371-8304 332-1030
Mobile No.: 0917 807-8394 Pedro Gil corner Singalong Street 371-8305
Paco, Manila BALIUAG
PARAÑAQUE–BETTER LIVING Tel. Nos.: (02) 354-3117; 521-4056 TWO E-COM Mariano Ponce Building
90 Doña Soledad Avenue Two E-Com Center Tower B Plaza Naning, Baliuag, Bulacan
Better Living Subdivision QUEZON AVENUE–PALIGSAHAN Ocean Drive corner Bayshore Drive Tel. Nos.: (044) 766-2014
Bicutan, Parañaque City 1184-A Ben-Lor Building Mall of Asia Complex, Pasay City 673-1338; 884-7600
Tel. Nos.: (02) 831-8507 Brgy. Paligsahan, Quezon City Tel. Nos.: (02) 802-3068; 802-5583 loc. 4312
Tel. Nos.: (02) 376-4548; 376-4546 587-4753
PARAÑAQUE–BF HOMES Mobile No.: 0917 506-8303 CABANATUAN
284 Aguirre Avenue QUEZON AVENUE Km. 115 Cagayan Valley Road
B.F. Homes, Parañaque City GJ Building, 385 Quezon Avenue UN AVENUE Maharlika Highway
Tel. Nos.: (02) 553-5412; 553-5414 West Triangle, Quezon City 552 United Nations Avenue near corner Sanciangco Street
Mobile No.: 0917 510-5911 Tel. Nos.: (02) 332-2639; 332-2638 Ermita, Manila Cabanatuan City, Nueva Ecija
Mobile Nos.: 0917 538-2423 Tel. Nos.: (02) 400-5468 Tel. Nos.: (044) 940-6943
PARAÑAQUE–JAKA PLAZA 400-5467 988-9555 loc. 4800
Jaka Plaza Center QUIAPO–QUEZON BOULEVARD
Dr. A. Santos Avenue (Sucat Road) 416 Quezon Boulevard VALENZUELA–MARULAS CABANATUAN–BAYAN
Brgy. San Isidro, Parañaque City Quiapo, Manila 92-J MacArthur Highway Burgos Avenue, Cabanatuan City
Tel. No.: (02) 820-6093 Tel. Nos.: (02) 247-3297; 247-3298 Marulas, Valenzuela City Tel. Nos.: (044) 600-2888
Tel. Nos.: (02) 291-6542; 291-6541 463-0441 (02) 884-7600
PARAÑAQUE–LA HUERTA RADA–LEGASPI loc. 4321
1070 Quirino Avenue HRC Center, 104 Rada Street VISAYAS AVENUE
La Huerta, Parañaque City Legaspi Village, Makati City Wilcon City Center Mall DAGUPAN
Tel.Nos.: (02) 893-1226; 893-1227 Tel. Nos.: (02) 810-9369; 818-2368 Upper Ground Floor Visayas Avenue Lyceum – North Western University,
812-2577 Quezon City Ground Floor, Tapuac District,
PARAÑAQUE–MOONWALK Tel. Nos.: (02) 990-7717; 990-6544 Dagupan City
Kassel Residence ROOSEVELT Tel. Nos.: (075) 523-3637
E. Rodriguez Avenue 342 Roosevelt Avenue 988-9555 loc. 4802
Moonwalk, Parañaque City Quezon City NORTH LUZON
Tel. Nos.: (02) 664-1923, 957-2339 Tel No.: (02) 957-0796 DAU
Mobile No.: 0917 621-8321 Mobile No.: 0917 520-4972 ANGELES–RIZAL MacArthur Highway
639 Rizal Street, Angeles City Dau, Mabalacat, Pampanga
PASAY–LIBERTAD SAN JUAN CITY Tel. Nos.: (045) 458-0297 Tel. Nos.: (045) 892-2216
533 Cementina Street. Madison Square 458-0298 892 – 2215; 988-9555
Libertad, Pasay City 264 N. Domingo Street 884-7600 loc 4833 loc. 4868
Tel. Nos.: 541-1697; 541-1698; Brgy. Pasadena, San Juan City
709-3435; 961-2628 Tel. No.: (02) 507-4147 ANGELES–SAN JOSE DOLORES
Mobile No.: 0917 561-5639 Sto. Rosario Street STCI Building, MacArthur Highway
PASIG–CANIOGAN San Jose, Angeles City Brgy. San Agustin, City of San
KSN Building, C. Raymundo Avenue STA. MESA Tel. Nos.: (045) 409-0234 Fernando, Pampanga
Caniogan, Pasig City 4128 Ramon Magsaysay Boulevard 887-6433; 988-9555 Tel. No.: (045) 649-3150
Tel. No.: (02) 957-0817 Sta. Mesa Manila loc. 4785
Mobile No.: 0917 520-6966 Tel Nos.: (02) 507-6515 GUAGUA
252- 3289; 252-3286 ARAYAT Plaza Burgos, Guagua, Pampanga
PASIG MUTYA Mobile No.: 0917 835-3352 Cacutud, Arayat, Pampanga Tel. Nos.: (045) 901-0641
Richcrest Building, Caruncho Tel. Nos.: (045) 409-9559 901-0640; 901-0966
corner Market Avenue, TAFT MASAGANA–SAVEMORE 885-2390
San Nicolas, Pasig City Parkview Plaza, Trida Building Ma. Rowena C. Cura LA UNION
Tel. No.: (02) 642-2870 Taft Avenue corner T.M. Kalaw Street A.G. Zambrano Building
Ermita, Manila BAGUIO–SESSION Quezon Avenue, San Fernando City
PASIG–PADRE BURGOS Tel. Nos.: (02) 554-0617; 554-0697 B 108 Lopez Building, Session Road La Union
114 Padre Burgos Street corner Assumption Road, Baguio City Tel. No.: (072) 700-3800
Kapasigan, Pasig City TANDANG SORA Tel. Nos.: (074) 446-3993
Tel. Nos.: (02) 650-3356; 650-3354 Cecile Ville Bldg. III 446-3994 LAOAG CITY
Mobile No.: 0917-5747874 670 Tandang Sora Avenue corner Mobile No.: 0917 868-3506 LC Square Building
General Avenue J.P. Rizal corner M.V. Farinas Streets
PASO DE BLAS Tandang Sora, Quezon City BALAGTAS Laoag City, Ilocos Norte
Andoks Building, 629 Gen. Luis Street Mobile No.: 0917 801-7585 Ultra Mega Supermarket Tel. No.: (077) 600-1008
Malinta Interchange – NLEX MacArthur Highway 600-1009
Paso de Blas, Valenzuela City TAYTAY Burol 1st, Balagtas, Bulacan
Tel.Nos.: (02) 984-8258; 443-5069 C. Gonzaga Building II Tel.Nos. (044) 693-1849 MACABEBE
Manila East Road, Taytay, Rizal (02) 884-7600 loc. 4316 Poblacion, Macabebe, Pampanga
Tel. No.: (02) 623-6113 Tel. No.: (045) 435-5507
Mobile No.: 0917 578-6978
 Directories 223

MALOLOS SAN ILDEFONSO–SAVEMORE TUGUEGARAO FILOIL–TANAUAN SUPLANG

Canlapan Street, Sto. Rosario Savemore Building Metropolitan Cathedral Parish Rectory FilOil Gas Station, Brgy.Suplang,
City of Malolos, Bulacan Cagayan Valley Road Complex Rizal Street, Tuguegarao City Tanauan City, Batangas
Tel. No.: (044) 794-2793 Poblacion, San Ildefonso, Bulacan Tel. Nos.: (078) 844-0484 Mobile No.: 0917 863-6160
Mobile No.: 0917 835-4684 Tel. Nos.: (044) 797-0742 (02) 884-7600 loc.4338
797-0974 (02) 988-9555 IMUS–TANZANG LUMA
MALOLOS–CATMON loc. 4853 URDANETA OLMA Building, Aguinaldo Highway
Paseo Del Rosario MacArthur Highway, Nancayasan Tanzang Luma, Imus City, Cavite
Catmon, City of Malolos, Bulacan SAN JOSE DEL MONTE Urdaneta City, Pangasinan Tel. Nos.: (046) 471-4715
Tel. No.: (044) 791-2461 Giron Building, Gov. Halili Avenue, Tel. Nos.: (075) 656 – 2331 476-0927
Tungkong Mangga, City of San Jose (02) 884-7600 loc. 4372 (02) 884-7600 loc. 4349
MASANTOL Del Monte, Bulacan
San Nicolas, Masantol, Pampanga Tel. Nos.: (044) 233-6501 LAGUNA–STA. CRUZ
Tel. No.: (045) 435-2906 (02) 988-9555 loc. 4001 VIGAN E & E Building, Pedro Guevarra Avenue
Mobile No.: 0917 835-4675 Agdamag Building, Quezon Avenue Sta. Cruz, Laguna
MEYCAUAYAN corner Calle Mabini, Vigan City, Tel. Nos.: (049) 501-3084
Mancon Building SAN MIGUEL Ilocos Sur (02) 988-9555 loc.4817
MacArthur Highway Norberto Street, San Miguel, Bulacan Tel. Nos.: (077) 674-0300 Mobile No.: 0917 561-5715
Calvario, Meycauayan, Bulacan Tel. Nos.: (044) 764-0162 (02) 884-7600 loc. 4359
Tel. Nos.: (044) 884-0099 (02) 884-7600 loc. 4311 LIPA–CM RECTO
228 -2416; (02) 884-7600 China Bank Savings Building
loc. 4326 SAN NARCISO SOUTH LUZON C.M Recto Avenue, Lipa City
Brgy. Libertad, San Narciso, Zambales Tel. Nos.: (043) 75-1414; 756-1022
MOUNT CARMEL Tel. Nos.: (047) 913-2245 BACOOR–MOLINO (02) 884-7600 loc.4325
Km. 78 MacArthur Highway 913-2288 Avon Building, 817 Molino Road
Brgy. Saguin, San Fernando City Molino III, City of Bacoor, Cavite LOS BAÑOS–CROSSING
Pampanga SAN RAFAEL Tel Nos.: (046) 431-9907 Lopez Avenue, Batong Malake
Tel.Nos.: (045) 435-6055 Cagayan Valley 235-7542 Los Baños, Laguna
884-7600 loc. 4330 corner Cruz na Daan Road (02) 988-9555 loc. 4878 Tel. Nos.: (049) 536-2596
San Rafael, Bulacan 536-0549; (02) 884-7600
PLARIDEL Tel. Nos.: (044) 815-8915 BACOOR–TALABA loc. 4375
0226 Cagayan Valley Road 913-7629; (02) 988-9555 Coastal Road corner Aguinaldo
Banga 1st, Plaridel, Bulacan loc. 4799 Highway, Brgy.Talaba, City of Bacoor, LUCENA
Tel. Nos.: (044) 795-0105 Cavite Merchan corner Evangelista Street
670-1067 SANTIAGO–VICTORY NORTE Tel. Nos.: (046) 417-5930 Lucena City
JECO Building, Maharlika Highway 417-5940 Tel. Nos.: (042) 660-6964
OLONGAPO corner Quezon Street, Victory Norte, (02) 884-7600 loc. 4369 (02) 884-7600 loc.4347
City View Hotel Building Santiago City, Isabela
25 Magsaysay Drive Tel Nos.: (078) 305-0260 BATANGAS–P. BURGOS NAGA
New Asinan, Olongapo City 305-0252; (02) 884-7600 No. 4 Burgos Street, Batangas City RL Building, Panganiban Street
Tel. No.: (047) 222-1891 loc. 4374 Tel. Nos.: (043) 723-1510 Lerma, Naga City, Camarines Sur
Mobile No.: 0917 807-8509 723-7652 Tel.Nos.: (054) 472- 5424
STA. ANA (02) 884-7600 loc. 4324 472-1947
ORANI Poblacion, Sta. Ana, Pampanga (02) 884-7600 loc. 4373
Brgy.Balut, Orani, Bataan Tel.Nos.: (045) 409-0335 BIÑAN
Tel. Nos.: (047) 638-1282 409- 9818 Nepa Highway, San Vicente, SAN PABLO–RIZAL AVENUE
(02) 988-9555 loc. 4871 (02) 988-9555 loc. 4793 Biñan City, Laguna Rizal Avenue corner
Tel.Nos.: (049) 511-3638 A. Fule Street (former Lopez Jaena)
ORANI–CALLE REAL STA. MARIA (02) 884-7600 loc. 4327 San Pablo City
Calle Real, Orani, Bataan Gen. Luna corner De Leon Street Tel. Nos.: (049) 562-0697
Tel. Nos.: (047) 638-1130 Poblacion, Sta. Maria, Bulacan CALAMBA (02) 884-7600 loc.4322
884-7600 loc. 4323 Tel. Nos.: (044) 288-2453 HK Building II, National Highway
884-7600 loc. 4319 Brgy. Halang, Calamba City, Laguna SAN PEDRO
PORAC Tel.Nos.: (049) 306-0238 Gen–Ber Building, National Highway
Cangatba, Porac, Pampanga STA. RITA 306-0234; (02) 988-9555 Landayan, San Pedro City, Laguna
Tel. Nos.: (045) 329-3188 San Vicente, Sta. Rita, Pampanga loc. 4844 and 4845 Tel. Nos.: (02) 847- 0585
0917 870-3305 Tel. Nos.: (045) 900-0658 869-8220; 988-9555
(02) 988-9555 loc. 4791 CAVITE CITY loc. 4837
SAN FERNANDO 485 P. Burgos Street Barangay 34,
Khy Trading Building SUBIC Caridad, Cavite City, Cavite STA. ROSA
San Fernando – Gapan Road Baraca, Subic, Zambales Tel. Nos.: (046) 417-3102 Sta. Rosa-Tagaytay Highway
City of San Fernando, Pampanga Tel. Nos.: (047) 232-6104 (02) 988-9555 loc. 4879 Sta. Rosa City, Laguna
Tel. Nos.: (045) 961-1415 232-6105 Mobile No: 0917-5615780 Tel. Nos.: (049) 502-9134
286-6811 (02) 988-9555 loc. 4852 (02) 988-9555 loc. 4872
(02) 988-9555 loc. 4812 DARAGA–ALBAY
Mobile No.: 0917 851-5172 TARLAC–MACARTHUR N & H Building, Rizal Street STA. ROSA–BALIBAGO
MacArthur Highway Brgy. San Roque, Daraga, Albay Old National Highway
SAN FERNANDO–BAYAN San Nicolas, Tarlac City Tel. Nos.: (052) 483-0706 corner Roque Lazaga Street
JSL Building, Consunji Street Tel.Nos.: (045) 982-9652 (02) 988-9555 loc 4822 Sta. Rosa City, Laguna
City of San Fernando, Pampanga (02) 884-7600 loc. 4337 Tel. Nos.: (049) 534-1167
Tel. Nos.: (045) 961-8168, 961-4575 DASMARIÑAS (02) 520-8448
(02) 884-7600 loc. 4320 Veluz Plaza Building
Zone 1, Aguinaldo Highway
Dasmariñas City, Cavite
Tel. Nos.: (046) 416-0510
416-0501
(02) 884-7600 loc.4368
224 China Bank Annual Financial and Sustainability Report 2017

CHINA BANK SAVINGS BRANCHES

STO. TOMAS–MAHARLIKA CEBU MANDAUE–BASAK TALISAY NEGROS–SAVEMORE
The Lifestyle Street, Cebu North Road Savemore Talisay
Maharlika Highway, San Antonio, Basak, Mandaue City, Cebu Mabini Street, Zone 12, Paseo Mabini
Sto. Tomas, Batangas Tel. No.: (032) 346-6959 Talisay City, Negros Occidental
Tel. Nos.: (043) 318-0582; Tel. Nos.: (034) 441-6264
778-3247; (02) 884-7600 DAVAO 441-6267; 441-6264
loc. 4389 8990 Corporate Center
Quirino Avenue, Davao City ZAMBOANGA–CITY MALL
TAGAYTAY–SAVEMORE Tel. Nos.: (082) 221- 3873 City Mall Don Alfaro Street
Mendez Crossing West 321-0273 to 74 Tetuan, Zamboanga City
Tagaytay-Nasugbu Highway Tel.Nos.: (062) 955-8709
corner Mendez-Tagaytay Road, DAVAO–RECTO 955-0563
Tagaytay City C. Villa Abrille Building
Tel. Nos.: (046) 413-3871 C.M. Recto Avenue, Davao City
413- 3872; (02) 988-9555 Tel. Nos.: (082) 305-5808 CBS OFF-BRANCH ATMs
loc. 4876 (02) 884-7600 loc. 4344
Mobile No.: 0917-561-5334 ISAAC & CATALINA MEDICAL
GENERAL SANTOS CENTER
Go Chay Ching Building Calero Street
VISAYAS-MINDANAO I. Santiago Boulevard Ibayo, Balanga, Bataan
General Santos City
BACOLOD Tel. Nos.: (083) 552-6329 LA SALLE COLLEGE ANTIPOLO
SKT Saturn Building 552-6330 1985 La Salle Avenue
Lacson corner Rizal Street (02) 884-7600 Brgy. San Luis, Antipolo City, Rizal
Bacolod City, Negros Occidental loc. 4350
Tel.Nos. (034) 435-6983 MABALACAT MUNICIPAL HALL
435-7143; 708-2041 KALIBO–CITY MALL Delfin Drive
(02) 988-9555 F. Quimpo Street connecting Mabini Mabalacat, Pampanga
loc 4810 and 4811 and Toting Reyes Street,
Kalibo Aklan RIS COMPOUND
CAGAYAN DE ORO Mobile No.: 0917-8047837 RIS Development Corporation
Sergio Osmeña Street 168 Mercado Street
Cogon District, Cagayan de Oro City ILOILO–JARO Tabe, Guiguinto, Bulacan
Tel. Nos.: (088) 859-0169 Lopez Jaena corner El 98 Street
859-0740; 852-2006 Jaro, Iloilo ZAMECO COMPOUND
Tel. Nos.: (033) 320-0370 ZAMECO II Head Office
CEBU–LAHUG 320-0426 National Road
Skyrise IT Building (02) 988- 9555 Bgy. Magsaysay, Castillejos, Zambales
Brgy. Apas, Lahug, Cebu City loc. 4861 and 4862
Tel. Nos.: (032) 236-0809
236-0869 ILOILO–QUEZON
132 Quezon Street, Iloilo City
CEBU–MANDAUE Tel. Nos.: (033) 335-0213
A. Del Rosario Avenue 321- 0940
Mantuyong, Mandaue City, Cebu (02) 988-9555
Tel. Nos.: (032) 520-2770 loc. 4863 and 4864
422-8019
(02) 884- 7600 loc. 4310 TAGUM–CITY MALL
Maharlika Highway corner
CEBU–MANGO Lapu- lapu Extension
JSP Mango Realty Building
Gen. Maxilom Avenue
corner Echavez Street, Cebu City
Tel. Nos.: (032) 231-4304
231-4736; 884-7600
loc. 4346
 Directories 225

BUSINESS OFFICES LA UNION BUSINESS CENTER APD SALARY LOAN CENTERS REGION 7 CEBU BUSINESS CENTER
A.G Zambrano Building Ground Floor Skyrise IT Building
BAGUIO SALES OFFICE Quezon Avenue NATIONAL CAPITAL REGION Brgy. Apas, Lahug, Cebu City
B108 Lopez Building, 2nd Floor San Fernando City, La Union BUSINESS CENTER Tel. No.: (032) 238-7820
Session Road corner Assumption Road Tel. Nos.: (072) 888-7477 2nd Floor, G.J. Building Mobile No.: 0917 303-3932
Baguio City (02) 884-7600 local 4227 385 Quezon Avenue, Quezon City
Tel No.: (02) 884-7600 local 4232 Tel. Nos.: (02) 372-7926; 978-7754 REGION 10 CAGAYAN DE ORO
LIPA BUSINESS CENTER Mobile No.: 0905 558 -2542 BUSINESS CENTER
BALIUAG SALES OFFICE China Bank Savings Building, Sergio Osmeña Street
Mariano Ponce Building, 2nd Floor 2nd Floor, C.M Recto Avenue CORDILLERA AUTONOMOUS Cogon District, Cagayan De Oro City
Plaza Naning, Poblacion, Lipa City REGION BUSINESS CENTER Mobile No.: 0935 565-2010
Baliuag, Bulacan Tel. Nos.: (043) 756-5003 8990 B 108 Lopez Building
Tel. Nos.: (02) 884-7600 (02) 884-7600 local 4253 Session Road corner Assumption Road REGION 11 DAVAO BUSINESS
locals 4202; 4261 Baguio City CENTER
MARIKINA SALES OFFICE Tel. No.: (074) 619-2097 3/F 8990 Corporate Center
BALAGTAS SALES OFFICE CTP Building, 3rd Floor Mobile No.: 0927 345-8502 Quirino Avenue, Davao City
China Bank Savings Building, Gil Fernando Avenue, Marikina City Tel. No.: (082) 287-6824
Borol 1st, McArthur Highway Tel. Nos.: (02) 645-9819 REGION 1 LA UNION BUSINESS Mobile No.: 0977 463-4707
Balagtas, Bulacan (02) 884-7600 local 4238 CENTER
Tel Nos.: (044) 693-1849 A.G Zambrano Building REGION 12 GENERAL SANTOS
(02) 884-7600 local 4316 NAGA SALES OFFICE Quezon Avenue, San Fernando City, BUSINESS CENTER
RL Building, 3rd Floor La Union Go Chay Ching Building
CABANATUAN SALES OFFICE Panganiban Street, Lerma, Naga City Tel. No.: (072) 687-2218 I. Santiago Boulevard,
Duran Building Tel. Nos.: (054) 472-1947 Mobile No.: 0905 465-6289 General Santos City
Burgos Avenue, Cabanatuan City (02) 884-7600 local 4273 0927 345-8502 Tel. No.: (083) 554-0211
Tel. No.: (02) 884-7600 local 4254 Mobile No.: 0907 881-5270
SAN FERNANDO PAMPANGA REGION 2 TUGUEGARAO BUSINESS
CAGAYAN DE ORO SALES OFFICE BUSINESS CENTER CENTER REGION 18 BACOLOD BUSINESS
Sergio Osmeña Street JSL Building, 3rd Floor Ground Floor, Metropolitan Cathedral CENTER
Cogon District, Cagayan De Oro City Consunji Street, City of San Fernando, Parish Rectory Complex, Rizal Street, SKT Saturn Building
Tel. No.: (02) 884-7600 local 4234 Pampanga Tuguegarao City Lacson corner Rizal Street, Bacolod City
Tel. Nos.: (045) 961-0005; 961-0008 Tel. No.: (078) 375-4471 Tel. No.: (034) 474-2262
CEBU BUSINESS CENTER (02) 884-7600 locals 4221 Mobile No.: 0917 353-6503 Mobile No.: 0922 811-2680
JSP Plaza Building, 2nd Floor 4236; 4237
General Maxilom corner Echaves Street REGION 3 SAN FERNANDO NAGA BUSINESS CENTER
Cebu City SAN PABLO SALES OFFICE BUSINESS CENTER 2nd Floor RL Building
Tel. Nos.: (032) 232-5061; 232-6263 China Bank Savings Building, 2nd Floor JSL Building, Consunji Street, Panganiban Drive
(02) 884-7600 locals 4207 Rizal Avenue corner A. Fule Street San Fernando City, Pampanga Naga City, Camarines Sur
4209; 4205; 4206 San Pablo City Tel. No.: (045) 280-8215 Tel. No.: (054) 881-2557
Tel. Nos.: (049) 800-3917
DAVAO BUSINESS CENTER REGION 4-A TAYTAY BUSINESS LUCENA BUSINESS CENTER
8990 Corporate Center, 3rd Floor SANTIAGO SALES OFFICE CENTER Merchan corner Evangelista Street
Quirino Avenue, Davao City Jeco Building 2nd Floor, C Gonzaga Building 2 Lucena City
Tel. Nos.: (082) 298-4569 Maharlika Highway Manila East Road, Taytay, Rizal Tel. No.: (042) 717-9387
(02) 884-7600 local 4218 Victory Norte, Santiago City Tel. No.: (02) 633-3988
Tel. No.: (02) 884-7600 local 4374 Mobile No.: 0919 754-1907 SAN PABLO BUSINESS CENTER
GENERAL SANTOS SALES OFFICE Rizal Avenue corner A. Fule Street
Go Chay Ching Building URDANETA SALES OFFICE REGION 5 DARAGA BUSINESS (former Lopez Jaena)
I. Santiago Boulevard China Bank Savings, Nancayan CENTER San Pablo City, Laguna
General Santos City Urdaneta City, Pangasinan N & H Building Tel. No.: (049) 521-3991
Tel. Nos.: (083) 301-5042 Tel. Nos.: (075) 522-0498 Rizal Street, Brgy. San Roque Mobile No.: 0939 109-6360
(02) 884-7600 local 4271 (075) 656- 2331 Daraga, Albay
(02) 884-7600 loc. 4372 Tel. No.: (052) 483-7783 TAGUM BUSINESS CENTER
ILOILO SALES OFFICE City Mall Maharlika Highway
MSL Building VIGAN SALES OFFICE REGION 6 ILOILO BUSINESS CENTER corner Lapu-Lapu Extension
Quezon Street, Iloilo City Agdamag Building, 2nd Floor Ground Floor, Golden Finance Building Brgy. Magupo, Tagum City
Tel. Nos.: (033) 337-6421; 508-3628 Quezon Avenue corner Calle Mabini Iznart Street, Iloilo City Tel No.: 0925 542-1223
(02) 884-7600 Vigan City, Ilocos Sur Tel. No.: 0927 567-7973
local 4219; 4225 Tel. No.: (02) 884-7600 loc. 4233 VIGAN BUSINESS CENTER
Ground Floor Plaza Maestro
IMUS SALES OFFICE Convention Center
OLMA Building Florentino Street, Brgy. I, Vigan City,
Aguinaldo Highway Ilocos Sur
Tanzang Luma, Imus City, Cavite Mobile No.: 0917 836-4204
Tel. Nos.: (046) 416-4992
(02) 884-7600 local 4268
226 China Bank Annual Financial and Sustainability Report 2017

CHINA BANK OFF-BRANCH ATMs

METRO MANILA Dasmariñas Village Association Landmark-Makati One E-Com Center
Office G/F The Landmark Bldg., G/F One E-Com Center,
168 Mall 1417 Campanilla St., Makati Ave., Ayala Center, Makati City Palm Coast Ave., SM MOA Complex,
3F Food Court, 168 Mall, Dasmariñas Village, Makati City Pasay City
Sta. Elena St., Binondo, Manila Landmark-Trinoma
Eastwood City Walk 2 ATM Slot 4, 2F Landmark Trinoma, Puregold-Blumentritt
999 Shopping Mall G/F ATM 1 Eastwood City Walk North Ave. cor. EDSA, Quezon City 286 Blumentritt St., Sta. Cruz, Manila
Basement Lobby, 999 Shopping Mall, Ph. 2, Eastwood City Cyberpark,
1002-1062 Soler St., Brgy. 293, 188 E. Rodriguez Jr. Ave., Liana’s-Sampaloc Puregold-E. Rodriguez
Zone 28, District 3, Binondo, Manila Bagumbayan, Quezon City 537 Earnshaw St., Sampaloc, Manila ATM # 1 Puregold E. Rodriguez,
Cosco Bldg., Rodriguez Ave.
999 Shopping Mall 2 Eastwood CyberMall Malabon Citisquare cor. G. Araneta Ave., Quezon City
Basement, 999 Shopping Mall Bldg. 2, 2F Eastwood Cybermall, G/F Malabon Citisquare,
Recto-Soler Sts., Binondo, Manila Eastwood Ave., Eastwood City C-4 Road cor. Dagat-dagatan Ave., Puregold-Lakefront
Cyberpark, Bagumbayan, Quezon City Malabon City Puregold Lakefront, Presidio
Alabang Mall Subdivision, Lakefront,
Alabang Town Center, Alabang- Eastwood Mall Market! Market! 1 Muntinlupa City
Zapote Road cor. Madrigal Ave., Level 1 ATM 2 Ph. 2, Eastwood Mall, Market! Market!, Fort Bonifacio
Muntinlupa City E. Rodriguez Jr. Ave., Bagumbayan, Global City, Taguig City Puregold-Paso de Blas
Quezon City LGF Puregold Paso de Blas,
Alfamart MAAX Market! Market! 2 Paso de Blas cor. Gen. Luis St.,
Unit 111 Mall of Asia Annex Bldg. Gateway Mall 2F Market! Market!, Fort Bonifacio Malinta Exit, Valenzuela City
(MAAX), Seaside Blvd., San Rafael, Booth 4 Level 2 Gateway Mall, Global City, Taguig City
Pasay City Cubao, Quezon City Puregold Jr.-Pandacan
Market! Market! 3 Puregold Jr. Pandacan,
Alfamart Naga Road Las Piñas Glorietta 4 G/F ATM Center in Fiesta Market, West J. Zamora St., Pandacan, Manila
Alfamart, Naga Road, Pulang Lupa 2, Glorietta 4, Ayala Center, Makati City Market! Market!, Fort Bonifacio
Las Piñas City Global City, Taguig City Quicklean Maybunga
Glorietta 5 369 Dr. Sixto Antonio Ave.,
Ali Mall G/F Glorietta 5, Medical City Maybunga, Pasig City
ATM Booth #1 UGF Ali Mall, Ayala Center, Makati City Medical City, Ortigas Ave., Pasig City
P. Tuazon Blvd., Araneta Center, Resorts World Gaming Area
Quezon City Greenbelt 3 Metro Point Mall G/F Casino Gaming Area,
Greenbelt 3 Drop-off Area, 3F Metro Point Mall, Resorts World, Pasay City
Ali Mall 2 Makati Ave., Makati City EDSA cor. Taft Ave., Pasay City
LGF Times Square Entrance, Ali Mall, Robinsons Forum Pioneer
P. Tuazon Blvd., Araneta Center, Greenhills Theater Mall Metrowalk ATM Center Pioneer Side,
Quezon City Main Entrance Greenhills Theater Mall, ATM 1 Bldg. C, G/F Metrowalk Forum Robinsons, Pioneer St.
San Juan City Commercial Complex, Meralco Ave., cor. EDSA, Mandaluyong City
Ateneo De Manila University Pasig City
G/F Kostka Hall, Ateneo De Manila Greenmeadows Clubhouse Robinsons Galleria
University, Katipunan Ave., Lovebird St., Green Meadows Midas Hotel Robinsons Galleria, EDSA
Loyola Heights, Quezon City Subdivision, Brgy. Ugong Norte, Midas Hotel, 2702 Roxas Blvd., cor. Ortigas Ave., Pasig City
Quezon City Pasay City
Cash & Carry Robinsons Galleria 2
2/F Cash & Carry Mall, iAcademy Buendia MRT-Boni Station Robinsons Galleria,
between South Super Highway & G/F iAcademy Plaza, MRT-Boni Station, EDSA cor. Ortigas Ave., Pasig City
Filmore St., Brgy. Palanan, Makati City H.V. Dela Costa St., Makati City EDSA, Mandaluyong
Robinsons Galleria 3
CBS Head Office Lobby Jackman Emporium MRT-Cubao Station West Wing, Robinsons Galleria,
CBS Lobby, 314 Sen. Gil J. Puyat Ave., Jackman Emporium Department Store MRT-Cubao Station, EDSA cor. Ortigas Ave., Pasig City
Makati City Bldg., Grace Park, Kalookan City EDSA, Quezon City
Robinsons Place-Manila
Chiang-Kai-Shek Jackman Plaza-Muñoz MRT-North Ave. G/F Padre Faura Entrance,
Chiang Kai Shek College, Jackman Plaza Muñoz, MRT-North Avenue Station, Robinsons Place Manila, Pedro Gil
1274 P. Algue St., Tondo, Manila EDSA, Muñoz, Quezon City EDSA, Quezon City cor. Adriatico St., Ermita, Manila

China Bank Online Center JGC Alabang MRT-Shaw Rockwell Business Center
Starbucks, CBC Building, JGC PHILS. Bldg., 2109 Prime St., MRT-Shaw Station, Rockwell Business Center,
8745 Paseo De Roxas cor. Villar St., Madrigal Business Park Ph III, EDSA, Mandaluyong City Ortigas Ave., Pasig City
Makati City Ayala Alabang, Muntinlupa City
Multinational Clubhouse Rockwell Power Plant
Comembo Commercial Complex Katarungan Village Clubhouse, Nazareth cor. Judea St., Stall No. 060 Ground Level,
Comembo Commercial Complex, Katarungan Village Admin Office, Multinational Village, Parañaque City Power Plant Mall, Makati City
J.P. Rizal Ext. cor. Sampaguita St., F. Reria cor. University Road,
Comembo, Makati City Muntinlupa City Newport Mall 4F Savers Center
4F Newport Mall, Resorts World, G/F Savers Center (right side of Main
Commerce Center Kimston Plaza Newport City, Pasay City Entrance), along EDSA cor. Taft Ave.,
Commerce Ave. cor. Filinvest Ave., Kimston Plaza, P. Victor St. Pasay City
Alabang, Muntinlupa City cor. P. Burgos St., Guadalupe Nuevo, Nova Square
Makati City G/F Nova Square, Quirino Highway, Shop and Ride
Conrad S Maison Mall Brgy. San Bartolome, Novaliches, 248 Gen. Luis St., Brgy. Nova Proper,
2F Conrad Hotel, Coral Ave., Quezon City Novaliches, Quezon City
SM MOA Complex, Pasay City
 Directories 227

Shop and Ride 2 St. Jude College UST Hospital PROVINCIAL

ATM 2, 248 Gen. Luis St., Brgy. Nova Dimasalang St. cor. Don Quijote St., University of Sto. Tomas Hospital,
Proper, Novaliches, Quezon City Sampaloc, Manila A.H. Lacson Ave., Sampaloc, Manila 2 Mango Avenue
2 Mango Ave.-Solara Bldg.,
Shopwise-Antipolo St. Luke’s-Quezon City UST Hospital 3 General Maxilom Ave., Cebu City
Shopwise Bldg., M.L. Quezon St. St. Luke’s Medical Center, G/F Clinic Division, University of
cor. Circumferential Road, San Roque, Med. Arts Bldg., E. Rodriguez Sr. Blvd., Sto. Tomas Hospital, A.H. Lacson Ave., A. Bonifacio-McDonald’s Baguio
Antipolo City Quezon City Sampaloc, Manila Villanueva Bldg., Lower Bonifacio St.,
Baguio City, Benguet
Shopwise-Commonwealth St. Luke’s-The Fort Victory Central Mall
Shopwise, Blk 17, Basement, St. Luke’s Medical Center, ATM 2 G/F Victory Central Mall, Abreeza Mall
Commonwealth Ave., Quezon City 5th Ave., Fort Bonifacio Global City, #717 Old Victory Compound, Abreeza Mall, J.P. Laurel Ave.,
Taguig City Rizal Ave., Monumento, Caloocan City Bajada, Davao City, Davao del Sur
SM Center Las Piñas
G/F SM Center Las Piñas, St. Luke’s-The Fort 2 Victory Food Market Baclaran Adventist University of the
Alabang-Zapote Road, Las Piñas City Basement, St. Luke’s Medical Center, Victory Food Market, Redemptorist Philippines
5th Ave., Fort Bonifacio Global City, Road, Baclaran, Parañaque City
Adventist University of the Philippines,
SM Center Angono Taguig City
Sta. Rosa-Tagaytay Road,
SM Center Angono, Quezon Ave., Victory Pasay Mall
Puting Kahoy, Silang, Cavite
Angono, Rizal STI-Delos Santos Medical Center Victory Pasay Mall,
201 E. Rodriguez Sr. Blvd., Antonio S. Arnaiz Ave.,
AG&P
SM Hypermarket-Mandaluyong Quezon City Pasay, Metro Manila
Atlantic Gulf & Pacific Company of
SM Hypermarket Mandaluyong,
Manila Inc., Brgy. San Roque,
121 Shaw Blvd. cor. E. Magalona St., Taft-U.N. Wack Wack Golf and Country Club
Bauan, Batangas
Brgy. Bagong Silang, G/F Times Plaza, T.M Kalaw Main Lobby Clubhouse, Wack Wack
Mandaluyong City cor. Gen. Luna St., Ermita, Manila Golf and Country Club, Shaw Blvd.,
Alfamart Filinvest Tanza
Mandaluyong City
Alfamart Filinvest Tanza, Filinvest Ave.,
SM Manila The A Venue
Westwood Place Subd. Ph.2,
UGF SM Manila Main Entrance, G/F Valdez Site, The A Venue, Walter Mart-Makati
Brgy. Paradahan, Tanza, Cavite
Natividad A. Lopez cor. Antonio 7829 Makati Ave., Makati City G/F Walter Mart Makati,
Villegas St., Ermita, Manila 790 Chino Roces cor. Antonio Arnaiz,
Tiendesitas Makati City Alfamart Golden City
SM Megamall Bldg. B Tiendesitas, Ortigas Ave. Molino-Paliparan Road, Salawag,
Level 2 Bldg. B, SM Megamall, EDSA cor. E. Rodriguez Ave., Pasig City Walter Mart-North EDSA Dasmariñas City, Cavite
cor. Julia Vargas St., Mandaluyong City Walter Mart Bldg.,
Trinoma 1 EDSA, Quezon City Alfamart Ilang-Ilang Tanza
SM MOA Hypermarket Level 1 Trinoma, North Ave. Alfamart Ilang-Ilang Tanza,
G/F SM Hypermarket, cor. EDSA, Quezon City Walter Mart-Sucat Ilang-Ilang St., De Roman Subd.,
SM Mall of Asia, Pasay City Walter Mart Sucat, Dr. A. Santos Ave., Daang Amaya 1, Tanza, Cavite
Trinoma 2 Brgy. San Isidro, Sucat, Parañaque
SM MOA Seaside Ferry Terminal Level 1 Trinoma, North Ave. Alfamart Lancaster
SM MOA Seaside Blvd. cor. EDSA, Quezon City Zabarte Town Center Alfamart Lancaster, MCS Bldg.,
near Esplanade, Pasay City Basement Zabarte Town Center, Advincula Ave., Alapan II-A,
Two Shopping Center 588 Camarin Road Imus, Cavite
SM Muntinlupa Two Shopping Center, Taft Ave. Ext., corner Zabarte Road, Kalookan City
ATM 2 G/F (beside Rear Entrance) 026 Zone 10, Pasay City Alfamart L’Paseo Arcade Indang
SM Muntinlupa, National Road, LGF L’Paseo Building, Indang-
Brgy. Tunasan, Muntinlupa City Unimart Greenhills Trece Martires Road, Indang, Cavite
B1 Unimart Greenhills Shopping
SM Taytay Center, Ortigas Ave., San Juan Alfamart Lumina
2F Bldg. A, SM Taytay, Manila East Alfamart Lumina, Aguinaldo Highway
Road, Brgy. Dolores, Taytay, Rizal UP Town Center cor. Nueno Ave., Imus, Cavite
2F UP Town Center, Katipunan Ave.,
Solaire Manila 2 Brgy. UP Campus Diliman, Alfamart Pacita Complex
Entertainment City, Aseana Ave., Quezon City Alfamart, Block 3 Phase 3A,
Tambo, Parañaque City Pacita Complex, San Pedro, Laguna
UPM-PGH
Solaire Resort & Casino Faculty Medical Arts Bldg., Alfamart Poblacion Rosario
Entertainment City, Aseana Ave., PGH Compound, Taft Ave., Alfamart Poblacion Rosario,
Tambo, Parañaque City Ermita, Manila 153 Gen. Trias Drive, Brgy. Poblacion,
Rosario, Cavite
Southgate Mall UST-Doctor’s Clinic
Alphaland Southgate Mall, University of Sto. Tomas Hospital, Alfamart Trece Martires
EDSA cor. Chino Roces Ave., Vestibule and New Doctor’s Clinic, CPC Bldg., Governor’s Drive
Makati City A.H. Lacson Ave., Sampaloc, Manila cor. Hugo Perez, Trece Martires, Cavite

St. Francis Square Alfamart Villa Catalina Dasmariñas

Basement 1, St. Francis Square, Lot 6123 Don Placido Campos
Doña Julia Vargas Ave. cor. Bank Drive, Avenue, San Agustin, Dasmariñas City,
Ortigas Center, Mandaluyong City Cavite

Alfamart Yakal Silang Cavite

G/F Alfamart Yakal Silang Cavite,
137 Pedro Montoya St. cor. Yakal,
Silang, Cavite
 228 China Bank Annual Financial and Sustainability Report 2017

CHINA BANK OFF-BRANCH ATMs

Allen Avenue Catbalogan Celebes Coconut Butuan Gaisano-Cagayan de Oro La Nueva Supermart
Centro Mall, Allen Ave., Brgy. 04, Km 9, Brgy. Taguibo, Butuan City, Unit #3 Level 2 Atrium Gaisano Mall, La Nueva Supermart Inc., G.Y. Dela
Catbalogan City, Samar Agusan Del Norte Corrales Extension cor. CM Recto Ave., Serna St., Lapu-Lapu, Cebu City, Cebu
Cagayan de Oro City, Misamis Oriental
Alwana Centrio Mall LB Supermarket - Zamboanga
National Highway, Brgy. Cugman, G/F Centrio Mall, CM Recto Gaisano-Iligan LB Realty Complex,
Cagayan de Oro City, Misamis Oriental cor. Corrales St., Cagayan de Oro, G/F Gaisano Citi Super Mall, Veteran’s Ave. Extension,
Misamis Oriental Iligan City, Lanao Del Norte Zamboanga City, Zamboanga Del Sur
Angel Supermarket
Luna St. cor. Burgos St., Brgy. Quirino, Clark Gateway Gaisano-Lapu-Lapu City LCC Peñaranda
Solano, Nueva Vizcaya Clark Gateway Commercial Complex, Gaisano Mactan Island Mall, LCC Supermarket, Peñaranda
Gil Puyat Ave., Brgy. San Francisco, Pusok, Lapu-Lapu City, Cebu cor. Rizal St., Legazpi City, Albay
Angeles University Foundation Mabalacat, Pampanga
Medical Center Gaisano-Masbate Lee Hypermarket
Basement, Angeles University Corpus Christi Gaisano Capital Masbate, Quezon St., G/F Lee Plaza Hypermart,
Foundation Medical Center, Corpus Christi School, Tomas Saco St., Crossing, Masbate City, Masbate Jose E. Romero Sr. Ave., Bagacay,
McArthur Highway cor. Diego Macasandig, Cagayan de Oro City, Dumaguete City, Negros Oriental
Silang St., Angeles City, Pampanga Misamis Oriental Gaisano-Puerto
Unit #1 ATM - 2nd Level Gaisano Lee Super Plaza
Araullo University Davao Adventist Hospital Puerto, Sayre Highway, Puerto, G/F Lee Super Plaza, M. Perdices
Araullo University, Maharlika Highway, Davao Adventist Hospital, Km. 7 Cagayan de Oro City, Misamis Oriental cor. San Jose St., Dumaguete City,
Brgy. Bitas, Cabanatuan City, McArthur Highway, Bangkal, Negros Oriental
Nueva Ecija Davao City, Davao del Sur Galeria Victoria
Galeria Victoria Mall, J. P. Rizal St., LimKetKai Mall
Ateneo de Davao University Davao Metro Shuttle Poblacion, City of Balanga, Bataan M4-193B Limketkai Mall,
Ateneo de Davao University, Pereyras Terminal 1, Magugpo West, Limketkai Drive, Cagayan de Oro City,
Roxas Ave., Poblacion District, Tagum City, Davao Del Norte Golden Prince Hotel Misamis Oriental
Davao City, Davao del Sur Golden Prince Hotel & Suites,
Dipolog Center Mall Acacia St. cor. Archbishop Reyes Ave., Lopue’s East Center
Avenue Hotel Bacolod Dipolog Center Mall, 138 Rizal Ave., Cebu City, Cebu Lopue’s East Centre, Burgos St.
Avenue Suites Hotel and Spa, Dipolog City, Zamboanga del Norte cor. Carlos Hilado National Highway,
12th St. cor. Lacson St., Bacolod City, Good Samaritan Hospital Bacolod City, Negros Occidental
Negros Occidental DIPSSCOR Good Samaritan Compound,
Davao Integrated Port and Stevedoring Burgos Ave., Cabanatuan City, Lorma Hospital
Ayala Center Cebu Services Corporation Bldg., Nueva Ecija Lorma Medical Center,
Level 3 ATM 1 Ayala Center Cebu, International Port of Davao, San Fernando, La Union
Cebu Business Park, Cebu City Sasa Wharf, Davao City, Davao del Sur Grosvenor Square
Grosvenor Square, Josefa St., Lotus Central Mall
Budget Wise Supermarket DLSU-Dasmariñas Angeles City, Pampanga G/F Lotus Central Mall,
Budget Wise Supermarket, College of Engineering, DLSU Nueno Ave., Imus, Cavite
Veterans Ave., Zamboanga City, Dasmariñas, Dasmariñas City, Cavite Holy Angel University 2
Zamboanga del Sur G/F Holy Angel University Student’s MAAP
DLSU-Health Science Campus Center, Sto. Rosario St., Angeles City, Maritime Academy of Asia and the
Caltex-SLEX 1 De La Salle University Health Science Pampanga Pacific, Kamaya Point Road,
South Luzon Expressway-Northbound, Campus Inc., Congressional Road, Mariveles, Bataan
Brgy. San Antonio, San Pedro, Laguna Dasmariñas City, Cavite Jenra Mall
Jenra Grand Mall, Sto. Rosario St., Mactan Isla Resort
Camayan Beach Resort & Hotel DLSU MAC Angeles City, Pampanga Agus Road, Ibabao, Marigondon,
Camayan Wharf, West Ilanin Forest G/F Medical Arts Centre Bldg., Lapu-Lapu City, Cebu
Area, Subic Bay Freeport Zone, DLSU Medical Center Compound, Jollibee-Mabalacat
Olongapo City, Zambales Congressional Road, ATM 2 ATM Center, Mactan Marina Mall
Dasmariñas City, Cavite McArthur Highway, G/F Mactan Marina Mall,
CB Mall Urdaneta Brgy. San Francisco, Mabalacat City, MEPZ 1, Lapu-Lapu City, Cebu
CB Mall, McArthur Highway, Eagle Ridge Country Club Pampanga
Nancayasan, Urdaneta City, Clubhouse, Eagle Ridge and Country Magic Mall
Pangasinan Club, Brgy. Javalera, Gen. Trias, Cavite KCC Mall-GenSan G/F Magic Mall, Alexander St.,
G/F KCC Mall GenSan, Poblacion, Urdaneta City, Pangasinan
CDO Medical Center ECCO Building J. Catolico Sr. Ave., Gen. Santos City,
CDO Medical Center Bldg. 2, G/F ECCO Bldg. (beside unit A) Fil-Am South Cotabato Magic Starmall
Tiano Brothers cor. Nacalaban St., Friendship Highway, Brgy. Anunas, UGF Magic Star Mall,
Cagayan de Oro City, Angeles City, Pampanga KCC Mall de Zamboanga Romulo Boulevard, Brgy. Cut-Cut 1,
Misamis Oriental KCC Mall de Zamboanga, Tarlac City, Tarlac
Friendship Supermarket Muñoz NE Gov. Camins Rd., Camino Nuevo,
Cebu Doctors’ Hospital D. Delos Santos St., Science City of Zamboanga City, Zamboanga del Sur Malolos
Cebu Doctors’ University Hospital, Muñoz, Nueva Ecija G/F Graceland Mall, Bulacan State
Osmeña Blvd., Cebu City, Cebu KMSCI University Grounds, McArthur
Gaisano-Bajada Davao Kidapawan Medical Specialist Highway, Guinhawa, Malolos City,
Cebu Doctors’ University Gaisano Mall of Davao, Center Inc., Sudapin, Kidapawan City, Bulacan
Cebu Doctors’ University Hospital, J.P. Laurel Ave., Bajada, North Cotabato
#1 Potenciano Larrazabal Ave., Davao City, Davao del Sur Malta Hospital Toril
North Reclamation Area, La Nueva Minglanilla Malta Hospital Toril,
Mandaue City, Cebu Gaisano-Bulua La Nueva Supermart Inc., McArthur Highway, Toril,
Gaisano Bulua Mall, Bulua St., Poblacion, Minglanilla, Cebu Davao City, Davao del Sur
Cagayan de Oro City, Misamis Oriental
 Directories 229

Maria Reyna Hospital Northside Doctors Hospital PPL McDonald’s Ormoc Savewise-Pozorrubio
Beside Hospital Entrance/Exit, Northside Doctors Hospital, G/F IAL Building, Burgos St. Savewise Bldg., Caballero St.,
Maria Reyna Hospital, T.J. Hayes St., Guimod, Bantay, Vigan City, Ilocos Sur cor. Rizal St., Ormoc City, Leyte Brgy. Cablong, Pozzorubio,
Cagayan de Oro City, Misamis Oriental Pangasinan
Notre Dame De Chartres Hospital Prince Hypermart Daanbantayan
Mariton Grocery Don Domingo Notre Dame De Chartres Hospital, Prince Hypermart, Poblacion, Shopwise-Cebu
Mariton Grocery, Don Domingo, #25 Gen. Luna Road, Baguio City, Daanbantayan, Cebu Shopwise Bldg., N. Bacalso Ave.,
Tuguegarao City, Cagayan Benguet Basak, San Nicolas, Cebu City, Cebu
Prince Mall of Baybay
Market City Nueva Ecija Doctors Hospital Prince Town Baybay, Andres Bonifacio Shopwise-San Pedro
Market City Bldg., Bus Terminal, Nueva Ecija Doctors Hospital, cor. Manuel L. Quezon St., Shopwise, National Highway,
Agora, Cagayan de Oro, Maharlika Highway, Cabanatuan City, Baybay, Leyte Brgy. Landayan, San Pedro, Laguna
Misamis Oriental Nueva Ecija
Puregold-Dau Sibalom Municipal Antique
Marquee Mall 1 Nuvali Solenad 2 Lot 9 Blk 19 Cosco Building, McArthur G/F Sibalom Municipal Hall,
G/F Activity Center, Marquee Mall, G/F Solenad 2 Nuvali, Highway, Dau, Mabalacat, Pampanga Sibalom, Antique
Aniceto Gueco St., Angeles City, Sta. Rosa-Tagaytay Road, Don Jose,
Pampanga Sta. Rosa, Laguna Puregold-Obando Skyrise Realty
Puregold Obando, P. Sevilla St., G/F Skyrise IT Bldg., Gorordo Ave.
Matina Town Square Nuvali Solenad 3 Bldg. B Brgy. Catanghalan, Obando, Bulacan cor. N. Escario St., Cebu City, Cebu
G/F Strip Bldg., Matina Town Center, G/F Bldg. B Solenad 3 Nuvali,
along McArthur Highway, Matina, Sta. Rosa-Tagaytay Road, Don Jose, Quickmart Daraga SM Baguio
Davao City, Davao del Sur Sta. Rosa, Laguna Quickmart Bldg., Rizal St., SM Baguio, Luneta Hill,
Daraga, Albay Upper Session Road, Baguio City,
MCIA-Departure Check-in Nuvali Solenad Hawkers Market Benguet
Southwing Hawkers Market, Solenad 3 Nuvali, Rivera Hospital Panabo
Mactan Cebu International Airport, Sta. Rosa-Tagaytay Road, Don Jose, Rivera Medical Center, National SM Center Tuguegarao
Lapu-Lapu Airport Road, Sta. Rosa, Laguna Highway, 7302 Brgy. San Francisco, 2F SM Center Tuguegarao Downtown,
Lapu-Lapu City, Cebu Panabo City, Davao del Norte Luna St. cor. Mabini St.,
Ocean Adventure Tuguegarao City
MCIA-Domestic Check-in Area Ocean Adventure, Camayan Wharf, Robinsons Calasiao
Mactan Cebu International Airport, West Ilanin Forest Area, Subic Bay Robinsons Place Pangasinan, SM City Bacolod
Lapu Lapu Airport Road, Freeport Zone, Zambales Brgy. San Miguel, Calasiao, G/F Bldg. A, ATM #3 SM City Bacolod,
Lapu-Lapu City, Cebu Pangasinan Reclamation Area, Bacolod City,
Orchard Golf and Country Club Negros Occidental
MCIA-Domestic Departure Hall Gate 2, The Orchard Golf and Robinsons Gensan
Mactan Cebu International Airport, Country Club Inc., Jose Abad Santos, G/F Robinsons Gensan, SM City Baliwag
Lapu-Lapu Airport Road, Dasmariñas City, Cavite Jose Catolico Sr. Ave., Brgy. Lagao, G/F SM City Baliwag, Doña Remedios
Lapu-Lapu City, Cebu General Santos City, South Cotabato Trinidad Highway, Brgy. Pagala,
OSPA-Farmers’ Medical Center Baliwag, Bulacan
MCIA Domestic Arrival Ormoc Sugarcane Planters Association Robinsons Tagum
Mactan Cebu International Airport, - Farmers Medical Center, Carlota Hills, National Highway,Tagum, SM City Batangas
Lapu-Lapu Airport Road, Brgy. Can-Adieng, Ormoc City, Leyte Davao del Norte SM City Batangas, M. Pastor Ave.,
Lapu-Lapu City, Cebu Pastor Village, Brgy. Pallocan Kanluran,
Our Lady of the Pillar Royce Hotel Batangas City, Batangas
Mindanao Sanitarium and Hospital G/F Our Lady of the Pillar Medical Royce Hotel, Manuel A. Roxas
Mindanao Sanitarium and Hospital, Center (near Emergency Room), Highway cor. Ninoy Aquino Avenue, SM City Batangas 2
Tibanga Highway, Iligan City, Tamsui Ave., Bayan Luma II, Clark Freeport Zone, Mabalacat, SM City Batangas, M. Pastor Ave.,
Lanao del Norte Imus, Cavite Pampanga Pastor Village, Brgy. Pallocan Kanluran,
Batangas City, Batangas
MJS Hospital Pacific Mall 2 Royce Hotel 2
Manuel J. Santos Hospital, Pacific Mall Bldg., Landco Business Royce Hotel, Manuel A. Roxas SM City Cabanatuan
554 Montilla Blvd., Butuan City, Park, F. Imperial St., Legazpi Port Highway cor. Ninoy Aquino Avenue, ATM Center, SM City Cabanatuan,
Agusan del Norte District, Legazpi City Clark Freeport Zone, Mabalacat, Maharlika Highway, Brgy. H.
Pampanga Concepcion, Cabanatuan City,
Muzon Uptown Pangasinan Medical Center Nueva Ecija
G/F Muzon Uptown, Brgy. Muzon, Pangasinan Medical Center, Nable St., RPGMC Tuguegarao
San Jose Del Monte, Bulacan Dagupan City, Pangasinan Ronald P. Guzman Medical Center, SM City Cagayan De Oro
Enrile Blvd., Carig, Tuguegarao City, ATM Center 2, Main Entrance,
Nagaland E-Mall Pavilion Mall Cagayan SM City Cagayan de Oro,
P. Diaz cor. Elias Angeles St., G/F Bldg. A, Pavilion Mall, Km. 35 Masterson Ave., Cagayan de Oro,
San Francisco, Naga City, Cebu Brgy. San Antonio, Biñan, Laguna SAMULCO Misamis Oriental
Sta. Ana Multi-Purpose Cooperative,
Nepo Mall-Angeles Plaza Fina Magalang Bldg. 1, Monteverde St., Davao City, SM City Calamba
Nepo Mall Angeles, Doña Teresa Plaza Fina, Don Andres Luciano St., Davao Del Sur G/F SM City Calamba, National Road,
Ave. cor. St. Joseph St., Nepo Mart Magalang, Pampanga Brgy. Real, Calamba City, Laguna
Complex, Angeles, Pampanga San Fernandino Hospital
Porta Vaga Mall San Fernandino Hospital, SM City Calamba 2
Nepo Mall-Dagupan Porta Vaga Mall, Along Session Road, McArthur Highway, Bo. Dolores, 2F SM City Calamba, National Road,
G/F Nepo Mall Dagupan, Arellano St., Baguio City, Benguet San Fernando, Pampanga Brgy. Real, Calamba City, Laguna
Dagupan City, Pangasinan
 230 China Bank Annual Financial and Sustainability Report 2017

CHINA BANK OFF-BRANCH ATMs

SM City Calamba 3 Southway Mall USJR Basak Cebu Xavier University
SM City Calamba, National Road, The Southway Square Mall, University of San Jose Recoletos Basak, G/F Library Annex, Xavier University,
Brgy. Real, Calamba City, Laguna Gov. Lim Ave. cor. La Purisima St., N. Bacalso Ave., Basak Pardo, Corrales Ave., Cagayan De Oro City,
Zamboanga City, Zamboanga del Sur Cebu City, Cebu Misamis Oriental
SM City Cauayan
Maharlika Highway, Brgy. District II, Sta. Rosa Hospital Walter Mart-Cabanatuan Yashano Mall Legazpi
Cauayan City, Isabela Sta. Rosa Hospital and Medical Center, Maharlika Highway, Brgy. Dicarma, Yashano Mall, F. Imperial St.
San Lorenzo Road, Brgy. Balibago, Cabanatuan City, Nueva Ecija cor. Terminal Rd. 1, Legazpi Port
SM City Clark Sta. Rosa, Laguna District, Legazpi City, Albay
ATM #1 SM City Clark (in-front Walter Mart-Calamba
of Transport Terminal), M. Roxas Super Metro Carcar G/F Walter Mart Calamba, Real St., Yubenco Starmall
Highway, CSEZ, Angeles City, Natalio B. Bacalso, National Highway, Brgy. Real, Calamba City, Laguna Yubenco Starmall, Maria Clara Lorenzo
Pampanga Carcar City, Cebu Lobregat Highway, Putik,
Walter Mart-Carmona Zamboanga City, Zamboanga Del Sur
SM City Dasmariñas 2 SuperL Phils Bacolor G/F Walter Mart Carmona, Macaria
G/F SM City Dasmariñas, Governor’s Angeles Industrial Park, PEZA, Business Center, Governor’s Drive, Yu-Yu Café & Dessert Shoppe
Drive cor. Aguinaldo Highway, Brgy. Brgy. Calibutbut, Bacolor, Pampanga Carmona, Cavite Tagum
Sampaloc 1, Dasmariñas, Cavite National Highway cor. Quirante II St.,
Target Mall 1 Walter Mart-Dasmariñas Magugpo Poblacion, Tagum City,
SM City General Santos G/F Target Mall, Sta. Rosa Commercial G/F Walter Mart Dasmariñas, Davao del Norte
SM City General Santos, Santiago Complex, Brgy. Balibago, Sta. Rosa, Barrio Burol, Aguinaldo Highway,
Blvd. cor. San Miguel St., Brgy. Lagao, Laguna Dasmariñas City, Cavite Zamboanga Peninsula Medical
Gen. Santos City, South Cotabato Center
Target Mall 2 Walter Mart-Gen. Trias Zamboanga Peninsula Medical
SM City Lipa ATM 4 Canopy Area, Target Mall, G/F Walter Mart General Trias, Center, Maria Clara Lorenzo Lobregat
ATM 2, SM City Lipa, Ayala Highway, Sta. Rosa Commercial Complex, Governor’s Drive, Barrio Manggahan, Highway, Putik, Zamboanga City,
Brgy. Maraouy, Lipa City, Batangas Brgy. Balibago, Sta. Rosa, Laguna Gen. Trias, Cavite Zamboanga del Sur

SM City Tarlac The District-Dasmariñas Walter Mart-San Fernando

G/F SM City Tarlac, McArthur Highway, G/F The District-Dasmariñas, Walter Mart San Fernando,
Brgy. San Roque, Tarlac City, Tarlac Molino - Paliparan Road, McArthur Highway, Brgy. San Agustin,
Dasmariñas City, Cavite San Fernando, Pampanga
SM City Davao
ATM Center 1, SM City Davao, The District-Imus Walter Mart-Sta. Rosa 1
Quimpo Blvd. cor. Tulip Drive, The District Imus, Aguinaldo Highway LGF Walter Mart Sta. Rosa,
Barangay Matina, Davao City, cor. Daang Hari Road, Balibago Road, Brgy. Balibago,
Davao del Sur Brgy. Anabu II-D, Imus, Cavite Sta. Rosa, Laguna

SM Lanang Premier Toyota San Nicolas Walter Mart-Sta. Rosa 2

UGF SM Lanang Premier, Brgy. 16 San Marcos, San Nicolas, UGF Walter Mart Sta. Rosa,
J.P. Laurel Ave., Brgy. San Antonio, Ilocos Norte Balibago Road, Brgy. Balibago,
Davao City, Davao del Sur Sta. Rosa, Laguna
Union Christian College
SM Lemery Union Christian College, Widdoes St., Walter Mart-Sta. Rosa Bel-Air
SM Center Lemery, Ilustre Avenue, Brgy. II, San Fernando City, La Union Walter Mart Bel-Air,
Lemery, Batangas Sta. Rosa-Tagaytay Road,
University of Perpetual Help-Biñan Pulong Sta. Cruz, Sta. Rosa, Laguna
SM Marilao Dr. Jose Tamayo Medical Bldg.,
G/F SM City Marilao, University of Perpetual Help System Walter Mart-Tagaytay
MacArthur Highway, Marilao, Bulacan Laguna, Brgy. Sto. Niño, Biñan, Laguna G/F Ayala Mall Serin, Tagaytay-
Nasugbu Road, Silang Junction South,
SM Market Mall University of Baguio Tagaytay City, Cavite
ATM 3 SM Market Mall Dasmariñas, University of Baguio,
Congressional Ave., Dasmariñas Assumption Road, Baguio City, Walter Mart-Tanauan
Bagong Bayan, Dasmariñas City, Benguet Walter Mart Tanauan, J.P. Laurel
Cavite National Highway, Brgy. Darasa,
University of Bohol Tanauan, Batangas
SM Supercenter Molino University of Bohol, Ma. Clara St.,
G/F SM Supercenter Molino, Tagbilaran City, Bohol Wesleyan University
Molino Road, Brgy. Molino 4, Wesleyan University of the Philippines,
Bacoor, Cavite University of San Carlos Mabini St. Extension,
University of San Carlos Main Cabanatuan City, Nueva Ecija
SOCSARGEN County Hospital University Bldg., Pantaleon del
Socsargen County Hospital, Rosario St., Cebu City, Cebu WNU STI University
Arradaza St., General Santos City, STI West Negros University,
South Cotabato USC-Talamban Burgos cor. Hilado St., Bacolod City,
USC Talamban Campus, Negros Occidental
South Town Centre Talisay Gov. M. Cuenco Ave., Brgy. Nasipit,
South Gate Mall, Tabunok, Talamban, Cebu City, Cebu
Talisay, Cebu
 Directories 231

BUSINESS OFFICES
CONSUMER BANKING CENTERS CBG CAGAYAN DE ORO CENTER CBG DAVAO CENTER
China Bank Cagayan de Oro Divisoria Branch China Bank - Davao-Recto Branch
CBG BACOLOD CENTER 2/F CBC Bldg. R.N. Abejuela St.,Divisoria, Cagayan 2/F CBC Bldg., C.M. Recto
China Bank - Bacolod Araneta de Oro City cor. J. Rizal Sts., Davao City
2/F CBC Bldg., Araneta St. Tel. Nos.: (088) 859-1232 Tel. Nos.: (082) 226-2103 / (082) 221-4163
Bacolod City Fax Nos.: (088) 856-2409 (082) 222-5761
Tel. Nos.: (034) 435-0250 / 435-0647 Email: [email protected] Fax No.: (082) 222-5021
Fax No.: (034) 435-0647 Center Head: Joanna Marie G. Garcia (OIC) Email: [email protected]
Email: [email protected] Center Head: Renato C. Sanchez II
Center Head: Jasmin Mae E. De Las Alas CBG CEBU CENTER
China Bank - Cebu Business Park CBG ILOILO CENTER
CBG BATANGAS CENTER 2/F CBC Corporate Center, Samar Loop China Bank - Iloilo-Rizal Branch
China Bank - Batangas City Branch cor. Panay Road, Cebu Business Park, Cebu City 2/F CBC Bldg., Rizal cor. Gomez Sts.
3/F CBC Bldg., P. Burgos St. Tel. Nos.: (032) 416-1606; (032) 346-4448 Brgy. Ortiz, Iloilo City
Batangas City (032) 416-1915; (032) 239-3733 Tel. Nos.: (033) 336-7918; (033) 503-2845
Tel. Nos.: (043) 723-7127 / 723-4294 Fax No.: (032) 346-4450 Fax No.: (033) 336-7909
Fax No.: (02) 520-6161 Email: [email protected] Email: [email protected]
Email: [email protected] Center Head: Kinard Hutchinson L. Tan Center Head: Marvin D. Celajes
Center Head: Evelyn G. Ricardo
CBG DAGUPAN CENTER CBG PAMPANGA CENTER
CBG CABANATUAN CENTER China Bank - Dagupan-Perez Branch China Bank - San Fernando Branch
China Bank – Cabanatuan, Maharlika Branch Siapno Bldg., Perez Boulevard 2/F CBC Bldg., V. Tiomico St.
2/F CBC Bldg., Brgy. Dicarma, Maharlika Highway Dagupan City Sto. Rosario Poblacion, City of San Fernando
Cabanatuan City, Nueva Ecija Tel. No.: (075) 522-8471 Pampanga
Tel. Nos.: (044) 600-1575/ 4631063 Fax No.: (075) 522-8472 Tel. Nos.: (045) 961-5344; (045) 961-0467
Fax No.: (044) 464-0099 Email: [email protected] Fax No.: (045) 961-8351
Email: [email protected] Center Head: Maricris P. Macaranas (OIC) Email: [email protected]
Contact Person: Emilie R. Gatdula Center Head: Anthony Ariel C. Vilar (OIC)

WEALTH MANAGEMENT GROUP

MAKATI HEAD OFFICE Therese G. Escolin Karen W. Tua
15/F China Bank Building, 8745 Paseo de Roxas Tel. No.: (02) 885-5693 Tel. No.: (02) 885-5643
cor. Villar Sts., Makati City, Philippines Email: [email protected] Email: [email protected]

Angela D. Cruz Grace C. Santos Yvette O. Chua

Tel. No.: (02) 885-5641 Tel. No.: (02) 885-5697 Tel. No.: (02) 885-5691
Email: [email protected] Email: [email protected] Email: [email protected]

Cesaré Edwin M. Garcia Eric Von D. Baviera Josefa S. Fernandez

Tel. No.: (02) 812-5320 Tel. No.: (02) 885-5688 Tel. No.: (02) 230-6985
Email: [email protected] Email: [email protected] Email: [email protected]

WEALTH MANAGEMENT OFFICES

GREENHILLS OFFICE QUEZON CITY OFFICE BACOLOD OFFICE

14 Ortigas Ave., Greenhills 82 West Ave., Quezon City 2/F CBC Bldg., Bacolod Araneta Branch
San Juan, Metro Manila Lacson cor. San Sebastian Sts.
Jaydee Cheng-Tan Bacolod City
Ma. Victoria G. Pantaleon (02) 426-6980 / [email protected]
(02) 727-7884 / [email protected] (034) 431-5549 / [email protected]
Ma. Luisa B. Tan
Desiree Jade T. Go (02) 4414685/ [email protected] CEBU OFFICE
(02) 727-7645 /[email protected] CBC Bldg., Samar Loop cor. Panay Road
ALABANG OFFICE Cebu Business Park, Cebu City
BINONDO OFFICE 2/F Unit D CBC Bldg., Acacia Ave.
6/F China Bank Bldg., Dasmariñas Madrigal Business Park, Ayala Alabang Eleanor D. Rosales
cor. Juan Luna, Binondo, Manila Muntinlupa City (032) 415-5881; (032) 239-3740 up to 44
[email protected]
Irene C. Tanlimco Sheila V. Sarmenta-Dayao
(02) 241-1452 / [email protected] (02) 659-2463 / [email protected] Geraldine U. Go
(032) 239-3741/[email protected]
Genelin U. Yu Claire L. Ramirez
(02) 247-8341/ [email protected] (02) 659-2464 / [email protected] DAVAO OFFICE
Km. 4 McArthur Highway, Matina, Davao City
KALOOKAN OFFICE Marvin Frederick M. Joel
167 Rizal Ave. Extension, Kalookan City (02) 552-1682/ [email protected] Mc Queen Benigno-Jamora
(082) 297-6268 / [email protected]
Jennifer Y. Macariola SAN FERNANDO OFFICE (082) 297-2335
(02) 366-8669 / [email protected] 2/F V. Tiomico St., San Fernando City, Pampanga

Sheryl Ann C. Hokia Ma. Cristina D. Puno

(02) 352-3789 / [email protected] (045) 961-0486 / [email protected]

Mary Grace C. Tan

(02) 352-3789/ [email protected]
232 China Bank Annual Financial and Sustainability Report 2017

SUBSIDIARIES AND AFFILIATE

CBS Building, 314 Sen. Gil Puyat Ave., Makati City

Tel. No.: (632) 988-9555
www.cbs.com.ph

1
China Bank Savings, Inc. (CBS) began operations on
September 8, 2008, following the acquisition of Manila Bank 6
by China Bank in 2007. Subsequent mergers with Unity
Bank and Planters Development Bank have bolstered CBS 8
2
as a leading thrift bank in the industry. With 160 branches
nationwide and a strong platform for retail banking, auto, 4
housing, teachers, and enterprise finance, CBS is dedicated
to servicing the needs of entry-level customers, the broad 7
consumer market, and the strategic Small and Medium
9
Enterprise (SME) sector. CBS is committed to promoting 3
financial inclusiveness and uplifting the quality of life of 5
consumers and entrepreneurs, in line with its Easy Banking
1 Alberto Emilio V. Ramos 2 Jose F. Acetre 3 Agerico G. Agustin
for You brand of service. 4 Maria Teresita R. Dean 5 James Christian T. Dee 6 Niel C. Jumawan
7 Jan Nikolai M. Lim 8 Sonia B. Ostrea 9 Luis Bernardo A. Puhawan

BOARD OF DIRECTORS MANAGEMENT COMMITTEE SENIOR OFFICERS

Chairman President First Vice Presidents With Interlocking position in

Ricardo R. Chua Alberto Emilio V. Ramos Atty. Odel C. Janda China Bank
Adonis C. Yap Atty. Aileen Paulette S. De Jesus
Vice Chair
Senior Vice Presidents Chief Compliance Officer
Nancy D. Yang
Jose F. Acetre Vice Presidents
President Assets Recovery Group Head Christian Hermes M. Bite Marilyn G. Yuchenkang
Alberto Emilio V. Ramos Kristine Michele M. Chavez Chief Audit Executive
Directors Agerico G. Agustin Marjorie T. Esplana
Patrick D. Cheng Branch Banking Group Head Emmanuel Antonio R. Gomez Editha N. Young
Alexander C. Escucha Angel Maria P. Ingalla Chief Technology Officer
Rosemarie C. Gan Maria Teresita R. Dean Virgilio I. Libunao, Jr.
Jose L. Osmeña, Jr. SME Lending Group Head Alfredo C. Mojica, Jr. Hanz Irvin S. Yoro
William C. Whang Rosalinda T. Munsayac Information Security Head
First Vice Presidents Ma. Lilibeth C. Paradero
Independent Directors Jan Nikolai M. Lim Matilde M. Ramoso
Roberto F. Kuan Consumer Lending Group Head Joseph Nestor T. Reyes
Margarita L. San Juan Maria Consuelo S. Ruffy
Alberto S. Yao Luis Bernardo A. Puhawan Edmundo D. Sinag
Acting Corporate Secretary Controller and Controllership Group Pablito C. Veloria
Atty. Odel C. Janda Head Anna Maria P. Ylagan

Vice Presidents Senior Assistant Vice

James Christian T. Dee Presidents
Treasurer and Treasury Head Raymond C. Apo
Emmanuelito M. Gomez
Sonia B. Ostrea Mary Grace F. Guzman
Centralized Operations Group Head Charmaine S. Hao
Rudcen Mark M. Iglesia
Senior Assistant Vice Myrna G. Mendoza
President Cymbeline Margaret T. Miranda
Niel C. Jumawan Julius Joseph L. Romabiles
Automatic Payroll Deduction (APD) Raymond Martin C. Rosas
Lending Group Head Brenda Santiago
Jay Araceli L. Suria
 Directories 233

28F BDO Equitable Tower 28F BDO Equitable Tower

8751 Paseo de Roxas, Makati City 8751 Paseo de Roxas, Makati City
Tel. No.: (632) 885 5798 • Fax No.: (632) 804 1740 Tel. No.: (632) 230-6980

China Bank Capital Corporation is China Bank‘s investment China Bank Securities Corporation is the stock
house subsidiary. China Bank Capital provides a wide range brokerage arm of China Bank Capital. China Bank Securities
of services that include debt and equity capital raising, complements China Bank Capital’s equity underwriting
corporate finance, financial advisory, and securitization to activities covering initial and secondary public offerrings in
public and private companies. China Bank Capital has acted terms of distribution and marketing to retail and institutional
as issue manager, arranger, and underwriter in various clients. China Bank Group’s clients likewise benefit with
landmark deals. access to stock brokerage services for stock trading
transactions at the Philippine Stock Exchange as well as
a suite of research reports on listed companies, industry
BOARD OF DIRECTORS
sectors and markets, in general.

Chairman Independent Directors

Ricardo R. Chua Roberto F. Kuan BOARD OF DIRECTORS
Vice Chairman Alberto S. Yao
Romeo D. Uyan, Jr. Margarita L. San Juan Chairman Directors
Corporate Secretary and William C. Whang Marisol M. Teodoro
Directors
Compliance Officer Vice Chairman Ryan Martin L. Tapia
Ryan Martin L. Tapia
Divine Grace F. Dagoy Romeo D. Uyan, Jr. Lilian Yu
William C. Whang
Alberto Emilio V. Ramos Independent Directors
Lilian Yu Roberto F. Kuan
Alberto S. Yao

MANAGEMENT TEAM MANAGEMENT TEAM

President President and Chief Executive

Ryan Martin L. Tapia Officer
Marisol M. Teodoro
Managing Director, Treasurer,
Coverage and Origination Head 1 5 Research Director
Virgilio O. Chua Garie G. Ouano

Directors 3 Treasurer, Corporate Secretary

Maria Angelica C. Balangue and Business Operations
Michael L. Chong Director
Grace T. Chua Mary Antonette E. Quiring
Juan Paolo E. Colet 2 6
Divine Grace F. Dagoy Sales and Trading Director
Charles A. Gamo Julius M. German
4

1 Ryan Martin L. Tapia 2 Virgilio O. Chua

3 Maria Angelica C. Balangue 4 Michael L. Chong
5 Charles A. Gamo 6 Marisol M. Teodoro
234 China Bank Annual Financial and Sustainability Report 2017

SUBSIDIARIES AND AFFILIATE

4/F & 15/F China Bank Building 8/F VGP Center, 6772 Ayala Ave.
8745 Paseo de Roxas cor. Villar St., Makati City Makati City 1226, Philippines
Tel. Nos.: (632) 885-5555; 885-5053 Tel. No.: (632) 885-5555
885-5060; 885-5051; 885-5052 VGP Center: (632) 751-6000
Fax No.: (632) 885-5047; 885-9458

CBC Properties and Computer Center, Inc. (PCCI ) was Chinabank Insurance Brokers, Inc. (CIBI) is a wholly-
created on April 14,1982 to provide computer-related owned subsidiary of the Bank established on November 3,
services solely to the China Bank Group. It manages the 1998 as a full service insurance brokerage. It provides direct
Bank’s electronic banking and e-commerce requirements, insurance broking for retail and corporate customers, with a
including sourcing, developing and maintaining software wide and comprehensive range of plans for life and non-life
and hardware, financial systems, access devices, and insurance. The life insurance retail products include Whole
networks to foster the safety and soundness of China Bank’s Life, Endowment, Investment-Linked, Education, Term, and
technology infrastructure and keep its processing capabilities Life Protection with Hospitalization and Critical Illness Cover.
in top shape. Under the Non-Life insurance category, programs for
residential, personal, corporate, and industrial clients are
General Manager Chief Technology Officer available, with insurance coverages such as Property, Motor,
Phillip M. Tan Editha N. Young Marine, Accident, and Liability.

Vice President President

Augusto P. Samonte Julieta P. Guanlao

Senior Assistant Vice Presidents

Joseph Jeffrey B. Javier
Benjamin S. Señires
Joseph T. Yu

Assistant Vice Presidents 24/F LKG Tower, 6801 Ayala Ave., Makati City
Restituto B. Bayudan Tel. No.: (632) 884-5433 • Fax No.: (632) 845-0980
Georgia Lourdes F. Maog Customer Care Line: (632) 884-7000
Belinda D. Mendoza E-mail : [email protected]
Ariel A. Soner www.manulife-chinabank.com.ph

Manulife China Bank Life Assurance Corporation (MCBL)

is a strategic alliance between Manulife Philippines and
China Bank, providing a wide range of innovative insurance
products and services to China Bank and China Bank Savings
customers. MCBL aims to ensure that every client receives
the best possible solution to meet his or her individual
1 2 3 financial and insurance needs. In 2014, China Bank raised its
equity stake to 40% in MCBL.

President and Chief Executive Officer

Robert D. Wyld*

4 5
Vice President for Bancassurance
1 Phillip M. Tan 2 Editha N. Young 3 Augusto P. Samonte Regina Karla F. Libatique
4 Julieta P. Guanlao 5 Regina Karla F. Libatique

*until April 30, 2018

 Directories 235

PRODUCTS AND SERVICES

102-7
DEPOSITS & RELATED SERVICES TRUST SERVICES • Bonds
Peso Deposits Unit Investment Trust Funds o Surety Bonds
Checking • China Bank Money Market Fund § Bidders Bond
• ChinaCheck Plus • China Bank Institutional Money Market Fund § Surety / Downpayment Bond
Savings • China Bank Short-Term Fund § Performance Bond
• Passbook Savings • China Bank Intermediate Fixed Income Fund § Warranty Bond
• ATM Savings • China Bank Fixed Income Fund § Heirs Bond
• MoneyPlus Savings • China Bank Balanced Fund o Fidelity Bonds
• SSS Pensioner’s Account • China Bank Equity Fund • Employee Benefit
Time • China Bank High Dividend Equity Fund o Group Personal Accident Insurance
• Regular Time Deposit • China Bank Dollar Fund o Group Life Insurance
• Diamond Savings Wealth Management o HMO
Foreign Currency Deposits (USD, Euro, and Yuan) • Investment Management Arrangement o Travel Insurance
• Savings • Personal Management Trust
• Time Corporate Trust Services PAYMENT & SETTLEMENT SERVICES
Cash Card • Escrow Services Electronic Banking Channels
Manager’s/Gift Check/Demand Draft • Employee Benefit Plan • China Bank Automated Teller Machine (ATM)
Safety Deposit Box • Collecting and Paying Agency • China Bank TellerPhone
Night Depository Services • Facility Agency, Security Trusteeship and • China Bank Online
Cash Delivery and Deposit Pick-up Services Paying Agency • Cash Accept Machine
Out-of-town Checks • Point-Of-Sale (POS)
TREASURY SERVICES
LOANS & CREDIT FACILITIES Peso-Denominated Government and Corporate CASH MANAGEMENT SOLUTIONS
Corporate Notes and Loans Bond Issues and Perpetual Notes Account Management via China Bank Online Corporate
Commercial Loans Dollar-Denominated Government and Corporate • Account Portfolio
Loan Syndications Bond Issues and Perpetual Notes • Transaction History
Project Finance Facilities LTNCD • Checkbook Reorder
Structured Financing Promissory Notes • Bank Certification Request
Working Capital and Revolving Credit Facilities Foreign Exchange • Stop Payment Order
Receivables Factoring • Spot, Forward, and Swaps • Buy Foreign Currency
Consumer Loans Derivatives • Sell Foreign Currency
• HomePlus Real Estate Loans • Interest Rate and Cross Currency Swaps • Fund Transfer Own
• Contract to Sell Financing • Fund Transfer Third Party
• AutoPlus Vehicle Loans INSURANCE PRODUCTS • Outward Remittance
• Credit Cards Bancassurance • Value Added Services:
• Protection o Host-to-Host
INTERNATIONAL BANKING o MCBL Legacy Protect 100
PRODUCTS & SERVICES o Base Protect / Base Protect Plus Liquidity Management
Letters of Credit • Education • Multi-Bank SOA Concentration (via China Bank Online
Standby Letters of Credit o MCBL Invest Corporate)
Shipping Guarantee • Health • Account Sweeping (via China Bank Online Corporate)
Documents Against Payment o MCBL Health Choice • Reverse Account Sweeping (via China Bank Online
Documents Against Acceptance • Wealth Corporate)
Open Account o Platinum Invest Elite • SCCP Broker’s Solution
Negotiation of Export Letter of Credit o MCBL Enrich Max • e – SOA in SWIFT MT940 Format
Import / Export Finance o MCBL Affluence Income
Customs and Duties Tax Payments o Affluence Max Elite Receivables Management
Advising of Letters of Credit and Standby Letters • Retirement • Automatic Debit Arrangement (ADA)
of Credit o MCBL Enrich • Check Depot
Telegraphic Transfer (Domestic and International) o MCBL Invest • Bills Pay Plus
Foreign Currency Accounts (Time Deposit and • Group Life Insurance • Collection Arrangement Report (via China Bank Online
Savings) Non-Life Insurance Corporate)
Foreign Currency Loans • Fire Insurance
Foreign Currency Bank Drafts o Residential Payables Management
Purchase and Sale of Foreign Exchange o Commercial • Check Write Plus Outsourced (Manager’s Check or
Inward and Outward Remittance Service-Domestic § Industrial All-Risk Insurance Corporate Check)
and International § Commercial All-Risk Insurance • Check Write Plus Software
§ Condominium Insurance • Corporate Inter-Bank Fund Transfer
INVESTMENT BANKING SERVICES o Trust Receipts • Outward Remittance (via China Bank Online Corporate)
Debt Financing • Motor Car Insurance • Automatic Credit Arrangement (ACA)
• Bonds o Individual • Payroll Crediting
• Syndicated Loan o Fleet Program • China Pay (Payroll Software)
• Corporate Notes • Marine Insurance • Payroll Processing
• Structured Loan o Hull Insurance
• Project Finance o Cargo Insurance POS Solutions
• LTNCD • Engineering Insurance • China Debit POS
• Short Dated Notes / QB Notes o Contractors All-Risk Insurance • POS Cash Out
Equity Financing o Electronic Equipment Insurance
• Initial Public Offering (Common Shares) o Erectors All-Risk Insurance Government Payments and Collections
• Follow On Offering (Common Shares) o Machinery Breakdown Insurance • BIR eTax Payment
• Preferred Shares o Equipment Floater • eGov Payment
• Convertible/Exchangeable Shares • Liability Insurance o Social Security System (SSS)
Mergers & Acquisition / Financial Advisory / o Comprehensive General Liability Insurance o Philippine Health Insurance Corporation (PhilHealth)
Corporate Restructuring/ Valuation/ o Product Liability Insurance o Pag-IBIG
Securitization o Professional Indemnity Insurance • SSS Sickness Maternity and Employee Compensation
o Directors and Officers Liability Insurance (SSS SMEC)
OVERSEAS KABABAYAN SERVICES • Crime Insurance
China Bank Remittance o Money, Security & Payroll Insurance CHINA BANK SECURITIES
Overseas Kababayan Savings (OKS) Account o Fidelity Insurance Stock Brokerage
China Bank Money Transfer o Cyber Crime Insurance Securities and Investment Research
o Kidnap and Ransom Insurance
236 China Bank Annual Financial and Sustainability Report 2017

INVESTOR INFORMATION
ANNUAL STOCKHOLDERS’ MEETING INVESTOR INQUIRIES

May 3, 2018, Thursday, 4:00 p.m. We welcome inquiries from investors, analysts, and the financial
Penthouse, China Bank Building community. For information about the developments
8745 Paseo de Roxas cor. Villar St. at China Bank, please contact:
Makati City 1226, Philippines
Alexander C. Escucha
Senior Vice President and Head
SHAREHOLDER SERVICES Investor & Corporate Relations Group
China Banking Corporation
For inquiries or concerns regarding dividend payments, account 28/F BDO Equitable Tower
status, change of address or lost or damaged stock certificates, 8751 Paseo de Roxas
please get in touch with: Makati City 1226, Philippines
Tel. No.: (+632) 885-5609
Stocks and External Relations Email: [email protected]
Office of the Corporate Secretary Website: www.chinabank.ph
China Banking Corporation
11/F China Bank Building
8745 Paseo de Roxas cor. Villar St. CUSTOMER INFORMATION
Makati City 1226, Philippines
We welcome inquiries from customers and other stakeholders.
Contact persons: Please contact:
Atty. Angeli Anne L. Gumpal / Jaime G. Dela Cruz
Customer Contact Center
Tel. No.: (+632) 885-5132; 230-6987 Customer Experience Management Division
Fax No.: (+632) 885-5135 China Bank Tellerphone (Available 24/7)
Email: [email protected] Hotline # (632) 88-55-888
[email protected] Domestic Toll-Free #s:
1-800-1888-5888 (PLDT)
Stock Transfer Service, Inc. 1-800-3888-5888 (Digitel)
Unit 34-D Rufino Pacific Tower
6784 Ayala Ave. Fax No: (632) 519-0143
Makati City 1226, Philippines Email: [email protected]
Facebook Page:
Contact persons: www.facebook.com/chinabank.ph
Antonio M. Laviña Twitter Page:
Ricardo D. Regala, Jr. www.twitter.com/chinabankph

Tel. Nos.: (+632) 403-2410; 403-2412; 403-9853 China Bank Building

Fax No.: (+632) 403-2414 8745 Paseo de Roxas cor. Villar St.
Makati City 1226, Philippines
We welcome letters or all such communications on matters
pertaining to the management of the Bank, stockholders’ rights,
or any other bank-related issues of importance. Stockholders who
wish to communicate with any or all of the members of the
China Bank Board of Directors may send letters to:

Atty. Corazon I. Morando

Vice President and Corporate Secretary
China Banking Corporation
11/F China Bank Building
8745 Paseo de Roxas cor. Villar St.
Makati City 1226, Philippines
Email: [email protected]
[email protected]
[email protected]
 GRI Index 237

GRI CONTENT INDEX

GRI Standard Disclosure Page Number Omission

GRI 101: Foundation 2016
General Disclosures
GRI 102: Organizational Profile
General
Disclosures 2016
102-1 Name of the organization 1
102-2 Activities, brands, products, and services 1, 17, 235
102-3 Location of headquarters 1, 236
102-4 Location of operations 1, 212-231
102-5 Ownership and legal form 79-80, 118
102-6 Markets served 1, 212
102-7 Scale of the organization 4-9, 52, 235
102-8 Information on employees and other 52-56
workers
102-9 Supply chain 16
102-10 Significant changes to the organization There are no significant changes in the
and its supply chain organization and supply chain.
102-11 Precautionary principle or approach 50, 71-78
102-12 External initiatives 62
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
Managers 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 the Philippines;
Philippine 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
238 China Bank Annual Financial and Sustainability Report 2017

GRI Standard Disclosure Page Number Omission

Strategy
102-14 Statement from senior decision-maker 10
102-15 Key impacts, risks, and opportunities 10
Ethics and Integrity
102-16 Values, principles, standards, and norms 1, 62-78
of behavior
102-17 Mechanisms for advice and concerns 62, 74, 76, 77
about ethics
Governance
102-18 Governance structure 69
102-19 Delegating authority 65
102-23 Chair of the highest governance body 63
102-24 Nominating and selecting the highest 64
governance body
102-28 Evaluating the highest governance body’s 68
performance
Stakeholder engagement
102-40 List of stakeholder groups 48
102-41 Collective bargaining agreements 53
102-42 Identifying and selecting stakeholders 46
102-43 Approach to stakeholder engagement 48, 57
102-44 Key topics and concerns raised 48, 57
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 46
boundaries
102-47 List of material topics 46, 47
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 i
102-51 Date of most recent report i
102-52 Reporting cycle i
102-53 Contact point for questions regarding the 81, 113, 236
report
102-54 Claims of reporting in accordance with i
the GRI standards
102-55 GRI content index i, 237-240
102-56 External assurance This report is not externally assured.
 GRI Index 239

MATERIAL TOPICS

GRI Standard Disclosure Page Number Omission

GRI 200 Economic Standard Series
Economic Performance
GRI 103: 103-1 Explanation of the material topic and its boundary 47, 49
Management 103-2 The management approach and its components 49
Approach 2016 103-3 Evaluation of the management approach 49
GRI 201: 201-1 Direct economic value generated and distributed 49
Economic
Performance 2016
Indirect Economic Impacts
GRI 103: 103-1 Explanation of the material topic and its boundary 20, 22, 24, 40, 47
Management
Approach 2016 103-2 The management approach and its components 20-25, 40-42
GRI 203: 203-2 Significant indirect economic impacts 20-25, 40-42
Indirect Economic
Impacts 2016
Anti-corruption
GRI 103: 103-1 Explanation of the material topic and its boundary 47, 76
Management 103-2 The management approach and its components 76
Approach 2016 103-3 Evaluation of the management approach 76
GRI 205: 205-2 Communication and training about anti-corruption 76
Anti-corruption policies and procedures
2016 205-3 Confirmed incidents of corruption and actions There are no confirmed
taken incidents of corruption.
GRI 300 Environmental Standard Series
Energy
GRI 103: 103-1 Explanation of the material topic and its boundary 47, 50
Management 103-2 The management approach and its components 50
Approach 2016 103-3 Evaluation of the management approach 51
GRI 302: 302-1 Energy consumption within the organization 51
Energy 2016 302-2 Energy consumption outside of the organization 51
Water
GRI 103: 103-1 Explanation of the material topic and its boundary 47, 50
Management 103-2 The management approach and its components We continue to enhance
Approach 2016 our process and the
components.
103-3 Evaluation of the management approach We continue to review
our measurements for the
succeeding years.
GRI 303: 303-1 Water withdrawal by source 50
Water 2016
Emissions
GRI 103: 103-1 Explanation of the material topic and its boundary 47, 50
Management 103-2 The management approach and its components 50
Approach 2016 103-3 Evaluation of the management approach 51
305-1 Direct (scope 1) GHG emissions No available data yet, but
systems are being put in
place for data gathering for
the next reporting cycle.
305-2 Energy indirect (scope 2) GHG emissions 51
305-3 Other indirect (scope 3) GHG emissions 51
240 China Bank Annual Financial and Sustainability Report 2017 GRI Index

GRI Standard Disclosure Page Number Omission

GRI 400 Social Standard Series
Employment
GRI 103: 103-1 Explanation of the material topic and its boundary 47, 52, 53, 55
Management 103-2 The management approach and its components 52, 53, 55
Approach 2016 103-3 Evaluation of the management approach 52, 55
GRI 401: 401-1 New employee hires and employee turnover 52, 55
Employment 2016 401-2 Benefits provided to full-time employees that are 53
not provided to temporary or part-time employees
Occupational Health and Safety
GRI 103: 103-1 Explanation of the material topic and its boundary 47, 54
Management 103-2 The management approach and its components 54
Approach 2016 103-3 Evaluation of the management approach The policies are in place
and we continue to review
our evaluation of our
programs for a healthy
workplace, and to enhance
its measurements.
GRI 403: 403-2 Types of injury and rates of injury, occupational We are enhancing our
Occupational diseases, lost days, absenteeism, and number of tracking system.
Health and Safety work-related fatalities
2016
Training and Education
GRI 103: 103-1 Explanation of the material topic and its boundary 47, 53, 54
Management 103-2 The management approach and its components 53, 54
Approach 2016 103-3 Evaluation of the management approach 53, 54
GRI 404: 404-1 Average hours of training per year per employee 53
Training and 404-2 Programs for upgrading employee skills and 54
Education 2016 transition assistance programs
Diversity and Equal Opportunity
GRI 103: 103-1 Explanation of the material topic and its boundary 47, 52
Management 103-2 The management approach and its components 52
Approach 2016 103-3 Evaluation of the management approach 52
GRI 405: 405-1 Diversity in governance bodies and employees 52
Diversity
and Equal
Opportunity 2016
Local Communities
GRI 103: 103-1 Explanation of the material topic and its boundary 60
Management 103-2 The management approach and its components 60
Approach 2016 103-3 Evaluation of the management approach 60
GRI 413: 413-1 Operations with local community engagement, 60
Local impact assessments, and development programs
Communities
2016
Customer Privacy
GRI 103: 103-1 47
Explanation of the material topic and its boundary
Management 103-2 The management approach and its components 57
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: 418-1 Substantiated complaints concerning breaches of There were no
Customer Privacy customer privacy and losses of customer data substantiated complaints
2016 on customer privacy
breach.
 CHINA BANKING CORPORATION
China Bank Building
8745 Paseo de Roxas corner Villar Street
Makati City 1226, Philippines

www.chinabank.ph

POST-CONSUMER RECOVERED FIBER

The cover of this China Bank Annual Report is printed on Radiance New Evolution White 280gsm. Radiance is an uncoated
felt-marked paper that captures the exrtraordinary printing definition and effects of a coated paper, certified by the Forest
Stewardship Council (FSC) which promotes environmentally appropriate, socially beneficial, and economically viable
management of the world’s forest.

The main report is printed on Limited Edition Fine Smooth 90gsm, 30% Recycled waste and FSC certified fibres. Made
carbon neutral, Limited Edition Fine Smooth is produced with the use of 100% wind-generated electricity. All pulps are
made elemental chlorine free helping to reduce harmful by-products.

The Financial Statement of this report is printed on FSC certified 9 Lives Recycled Offset 100% Recycled 80gsm that is
made from 100% post consumer fiber.