[Sponsored Article] Over the past year, global economy slowed down and monetary policies became expansionary. Looking forward to 2020, as China’s economy is shifting from rapid growth to high-quality development, the banking industry in China will continue to deepen the supply-side structural reform to better serve the real economy. Postal Savings Bank of China Co., Ltd. (the “Bank” or “PSBC”, stock codes: 601658.SH, 1658.HK), which attained the goal of being listed in both the A-share and H-share markets at the end of last year, recently announced the results for 2019. During the reporting period, PSBC had been continuously improving business performance, with net profit grew by a double-digit rate. Against the backdrop of downward pressure faced by the industry, the Bank had made notable progress and lent a splash of color to the global banking industry with fast development of Fintech and deepened transformation towards the “New Retail”. Profitability steadily improved, and asset quality remained superior During the reporting period, profitability and performance of the Bank steadily improved. In 2019, the operating income and net profit of the Bank stood at RMB277,116 million and RMB61,036 million, indicating a year-on-year increase of 6.08% and 16.52% respectively; net interest spread (NIS) and net interest margin (NIM) were 2.45% and 2.50% respectively, maintaining an industry-leading level; return on average equity (ROE) and return on average assets (ROA) further improved to reach 13.10% and 0.62%, up by 79 and 5 basis points respectively. Along with the steady improvement in profitability, PSBC managed to achieve superior asset quality. As of the end of 2019, the Bank’s NPL ratio was only 0.86%, less than half of the industry average, the ratio of NPLs to loans overdue for more than 90 days was 147.55%, and the allowance to NPLs ratio was 389.45%. Advantages were further consolidated via the deeply-penetrating network, and marked achievements were made in transformation towards the “New Retail” Retail banking has become a significant driver of banks’ income growth. PSBC was born with retail genes and endowed with retail advantages. It possesses a deeply-penetrating distribution network with wide coverage and balanced layout, covering 99% of county areas in China. The extensive network, together with a huge clientele, has provided the Bank with strong momentum for developing retail business. Benefiting from the “New Retail” transformation, the Bank has been continuously consolidating core advantages on deposits and optimizing deposit structure. As of the end of 2019, the Bank’s deposits totaled RMB9.31 trillion, of which RMB8.18 trillion were personal deposits, a 9.58% increase from the end of the previous year. Deposits accounted for 96% of total liabilities and personal deposits accounted for 88% of total deposits. Under the retail strategy, the Bank’s capability, quality and efficiency in serving the real economy have further improved. As of the end of 2019, the Bank’s balance of agriculture-related loans reached RMB1.26 trillion, making diligent contribution to the rural revitalization strategy; the balance of inclusive loans to small and micro enterprises was RMB653,185 million, where the number of accounts with outstanding loans hit 1,516,000; consumer credit business developed steadily, with a consumer loan balance of RMB2.02 trillion, growing by RMB323,957 million or 19.13% from the end of 2018. 3% of annual operating income was invested in information technology to empower digital transformation In 2019, the Bank’s investment in information technology totaled RMB8,180 million, accounting for nearly 3% of total operating income. The investment in information technology mainly focused on enhancing capabilities on inhouse R&D and system operation, strengthening data governance and application of big data, and accelerating financial technology innovations, in order to offer strong support for digitalized transformation and high-quality development. To deliver better services, the Bank closely integrated business development with cutting-edge technologies such as cloud computing, artificial intelligence, blockchain and the Internet of Things, and continuously explored and implemented applicable scenarios. In terms of cloud computing, the Bank built a cloud service architecture comprising of “three centers located in two cities”, based on the open cloud platform of OpenStack. In 2019, the Bank’s cloud platform of the processing system effectively supported 60 systems, including mobile banking, online banking, channel management platforms and third-party payment, with an average daily transaction volume of 378 million, accounting for over 80% of the Bank’s total transactions. In terms of artificial intelligence, the Bank actively promoted the application of artificial intelligence in various scenarios, such as smart banking, intelligent operations, intelligent risk management and intelligent marketing, and successfully launched new products such as intelligent customer service, “Face Scan Payment”, and intelligent bill identification. In terms of blockchain, the U-chain forfaiting business system went live and completed the first cross-blockchain transaction. In terms of the Internet of Things, the Bank promoted the application of RFID technology to achieve intelligent management and control of cash and physical objects, reduce operational risks and improve operational efficiency. Actively seizing development opportunities of the digital era and aiming for improvement of customer experiences, the Bank sped up the iteration and innovation of products, and tried to forge an online access that is intelligent, scenario-based and open. In an epoch of continually popularized digitization of banking services, the Bank is poised to unleash greater growth potential.