[Sponsored Article] On October 29th, Postal Savings Bank of China Co., Ltd. (hereinafter referred to as “PSBC”, Stock Code: 601658.SH, 1658.HK) released the Third Quarterly Report of 2020. As the COVID-19 pandemic was under better control and the economy was steadily recovering, PSBC continued to advance transformation and development and enhance the quality and efficiency of serving the real economy in the third quarter. Its business performance rebounded remarkably, with the asset quality remaining superior and the business development showing a good momentum of steady growth. Seizing opportunities of economic recovery and realizing a year-on-year growth rate of 13.59% in net profit for the third quarter Since the COVID-19 outbreak, PSBC has adjusted its business structure, controlled costs and increased fee and commission income, while actively advancing the construction of financial ecological scenarios and firmly advancing transformation and development. PSBC continued to optimize the business structure and improve the development quality. On the asset side, PSBC optimized the asset structure and increased credit supply. Its loan-to-deposit ratio rose 3.08 percentage points to 56.49% from the prior year-end. On the liability side, PSBC continued to promote high-quality development of deposits, and the proportion of deposits to total liabilities reached 95.52%. Notable results have been achieved for the control of long-term deposits with high cost. Meanwhile, in the third quarter, by intensifying efforts in product research, development and innovation as well as carrying out special activities, etc., PSBC achieved rapid recovery in fee and commission income, which grew by 27.14% year on year. Benefiting from the domestic economic recovery and a series of forceful measures, PSBC’s business performance rebounded remarkably. According to its third quarterly report, as at the end of September, PSBC’s total assets exceeded RMB11 trillion for the first time, reaching RMB11.13 trillion, representing an increase of 8.98% from the prior year-end. Total liabilities registered RMB10.48 trillion, representing an increase of 8.31% from the prior year-end. The operating income was RMB216.527 billion (under the International Financial Reporting Standards), up by 2.83% year on year. The net profit registered RMB52.895 billion, and the net profit for the third quarter was up by 13.59% year on year. The net interest margin and net interest spread were 2.40% and 2.35% respectively, maintaining a leading position in the industry. Strengthening asset quality control with an NPL ratio of only 0.88% During the pandemic, the risk control and asset quality of the banking industry have become focuses of attention. In the third quarter, on one hand, PSBC continued to strengthen asset quality control, sped up the construction of an intelligent risk control system, and enhanced management quality and efficiency; on the other hand, it accelerated risk mitigation and intensified the disposal of NPLs. As a result, its asset quality maintained superior with stronger risk resistance capability. At the end of September, PSBC’s NPL ratio stood at only 0.88%, down by 0.01 percentage point from the end of June. The allowance to NPLs ratio was 403.21%, up by 13.76 percentage points from the prior year-end and 3.09 percentage points from the end of June. The proportion of special-mention loans and the ratio of overdue loans were 0.52% and 0.84%, down by 0.14 percentage point and 0.19 percentage point respectively from the prior year-end. Next, PSBC will continue to uphold a prudent risk appetite, improve the comprehensive risk management system, and promote refined risk management to consolidate the foundation for risk control. Enhancing fintech empowerment and further tapping the potential of retail business with improved efficiency At present, the steady domestic economic recovery has brought new development opportunities to the transformation and development for commercial banks. Facing the new situation, PSBC will continue to make good use of its endowments as “a large retail bank with a unique balance sheet and superior asset quality”, advance transformation and upgrading, and further exploit its potential and improve efficiency. In adhering to the retail banking strategy, PSBC will highlight key tasks, develop superior products and core platforms, strengthen forward-looking judgment of the market environments, customer demand and key fields, continue to enhance market competitiveness in key areas such as small and micro businesses, Sannong and consumer loans, etc., and improve the quality and efficiency in serving the real economy. In enhancing technological empowerment, PSBC will fully head into the homestretch to achieving tasks set out in the “13th Five-Year” plan on IT construction and promote the construction of the new-generation core system for personal business. It will focus on the construction of such projects as credit business platforms and the “PSBC Life” App, and enhance the Bank’s technological support capability. In optimizing the asset-liability structure, PSBC will consolidate its strength in core liabilities, continuously uphold deposits as the cornerstone of the bank and strike a balance between volume and price. It will optimize the asset structure and improve the operation efficiency of assets. It will continuously follow changes in policies and market environments, actively adjust and optimize the structures on the asset side and the liability side and maintain its competitive edge in interest margin.