Handelsbanken Shanghai

www.handelsbanken.com/capitalmarketswww.handelsbanken.com/capitalmarkets

Handelsbanken Shanghai Helping your business succeed in China

19 April 2023

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Long-term commitment- Founded 1871

- Oldest listed company on the Stockholm Stock Exchange

Total assets of SEK 2,154bn (Q4 2010)

Operating profit of SEK 14.8bn (2010)

Loans to the public of SEK 1,482bn (Q4 2010)

Higher profitability than the other major Swedish banks for 38 years running and most cost-effective universal bank in Europe

- Lower loan losses than competitors

More satisfied customers than other major banks*

High rating

10,850 employees

720+ branch offices worldwide- 461 branches in Sweden, 147 in other Nordic countries, 83 in

Great Britain and 32 in the rest of the world

Operating in 22 countries

Handelsbanken Group – a leading Nordic commercial banking group

*Source: Swedish Quality Index 2010

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Banking in 22 countries

Global insight…

In other countries

Greater China - Shanghai, Beijing*, Taipei*, Hong Kong

India – Mumbai*

Singapore - Singapore

USA - New York

Malaysia - Kuala Lumpur*

Branches in our domestic markets

Denmark (53)

Finland (45)

Norway (49)

Sweden (461)

Great Britain (83)

The rest of Europe

Austria - Vienna

Estonia - Tallinn

France - Paris, Nice

Germany – Dusseldorf, Essen, Frankfurt, Hamburg, Mannheim, Munich, Stuttgart

Latvia - Riga

Luxembourg - LuxembourgThe Netherlands – Amsterdam, Het Gooi, Breda, Eindhoven, Rotterdam, Schiphol, Emmen

Poland - Gdansk, Poznan, Warsaw, Wroclaw

Russia - Moscow, St. PetersburgSpain – Marbella*

Switzerland - Zurich *Representative Office

4The history of Handelsbanken

In 1970 Handelsbanken started to focus on profitability rather than volume. The goal: Return on equity must exceed the average for other listed banks

Every year, Handelsbanken has achieved the goal of being more profitable than the average of other listed banks

This goal is to be achieved by the Bank having more satisfied customers and lower costs than its competitors

Stockholms Handelsbank is

founded

Listed on the Stockholm

stock exchange

Becomes Svenska Handels-banken

Purchases Skånska Banken &

Oslo Handelsbank

Purchases Stavanger

Bank in Norway

Purchases RKA which becomes Handels-

banken Liv

Purchases Skopbank in

Finland

Purchases Midtbank in Denmark

Purchases Stadshypotek

Purchases Bergens-banken in Norway

Purchases SPP

Livförsäkrings AB

Sells SPP to Storebrand

AS

Purchases Lokalbanken in Denmark

Handelsbanken’s goal

1871 1873 1919 1990 1991 1992 1995 1997 1999 2001 2002 2007 2008

5External rating Nordic banks

Handelsbanken

DnB Nor Bank

Bank Standard & Poor’s Moody’s FITCH

Long-term Short-term Long-term Short-term Long-term Short-term

AA- F1+

SEB A+ F1

Nordea AA- F1+

Swedbank A F1

Danske Bank A+ F1

Aa2 P-1

A1 P-1

Aa2 P-1

A2 P-1

A1 P-1

Aa3 P-1

AA- A-1+

A A-1

AA- A-1+

A A-1

A A-1

A+ A-1

6External rating European banksLogo Bank

Moody’s ratings for listed European banks

Long-term Financial strength

Credit Suisse

Handelsbanken

BNP Paribas

Banco Santander

HSBC Bank Plc.

Nordea Bank

Société Générale

Deutsche Bank

Barclays Bank Plc.

Danske Bank

DnB Nor Bank

SEB

Swedbank

Royal Bank of Scotland

Note: As of February 2011

KBC Bank

C+ Aa2

B- Aa2

B- Aa2

C+ Aa2C+ Aa2

C+ Aa2

Standard Chartered Bank B- A1

C+ Aa3

C+ Aa3

C A1

C Aa3

C- A1

C- Aa3

C Aa3

D+ A2

B Aa1

Credit Agricole

Banco Bilbao Vizcaya Argentina

Intesa SanPaolo

UBS

Commerzbank

Erste Group Bank AG

Lloyds Bank

UniCredit Bank AG

Bank of Ireland

Allied Irish Banks

C+ Aa1

B- Aa2

B- Aa2

C Aa3

C- Aa3

C- Aa3

C- Aa3

C- A1

D Baa2

D Baa3

7Customer satisfactionCustomer satisfaction in Sweden (2005-2010)

50%

55%

60%

65%

70%

75%

2005 2006 2007 2008 2009 2010

Handelsbanken Sector average

Sweden– Corporate market – best among the four big banks

– Private market – best among the four big banks

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A strongly decentralized organization – the branch is the Bank

Based on the customer’s requirements – not individual products

Profitability always has higher priority than volumes

A long-term approach

We have branches where our customers live and are active

Local branches have overall business responsibility for their customers

No budgets

No bonuses for executive and senior management

Handelsbanken’s corporate philosophy Our way

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President Hu Jintao shaking hand with Mr. Pär Boman, President and Group Chief Executive of Svenska Handelsbanken, in June 2007 at Handelsbanken’s office in Stockholm

Svenska Handelsbanken opened a representative office in Beijing in 1982 and became the first Swedish and Nordic bank with an office in China

Branch office in Hong Kong opened in 1988, today the only Nordic bank with a branch office in Hong Kong

Representative office opened in Taipei in 1990, until today the only Nordic bank with an office in Taipei

Branch office in Shanghai opened in 2005, once again the first Nordic bank with a branch office in China

In February 2009 Svenska Handelsbanken Shanghai branch became the first Nordic bank to be granted a RMB business licence

Svenska Handelsbanken is also the only Nordic bank with a leasing company in China

Svenska Handelsbanken is also the first Nordic bank to issue an off-shore RMB bond

Your local banking partner in Greater China

1030 years experience of banking in Greater ChinaHandelsbanken’s history in China

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Handelsbanken’s presence in Great China Comments

Local presence

Handelsbanken currently has two branches and two representative offices in the Greater China region– The branches are located in Shanghai and Hong Kong

– The representative offices are located in Beijing and Taipei

In total Handelsbanken employs roughly 50 people throughout the whole Greater China region, with a mix of local and Nordic staff

Handelsbanken is full service bank and is one of only two Nordic banks that can lend in local currency and is the only Nordic bank that can offer leasing products

Beijing

• Representative office

• Employees: 3

Hong Kong

• Branch

• Employees: 26

Shanghai

• Branch

• Employees: 23

Taipei

• Representative office

• Employees: 1Branches

Representative offices

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Payments

Domestic payments

Cross-border payments

Entrustment loans

3

Accounts

Local currency accounts

Foreign currency accounts

1

Internet banking

Global Online

2

Trade finance

L/C Guarantees Discounting of Bills & BAD

5

Treasury

FX spot FX forwards Deposits

6

Handelsbanken Shanghai services overview

Shanghai

Financing

Working capital loans

Fixed-asset loans

4

Leasing

Finance Lease

Operating Lease

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13Accounts and internet banking

Foreign currency accounts

Current account (used for daily transactions)

Pledge deposit (cash collateral as security for guarantees, L/C etc.)

Capital account (used for registered capital injection)

Temporary capital account (pre-operating expenses – can be converted into capital account)

Representative office account

Offshore account (for offshore company’s settlement with China)

Escrow account

Local currency accounts

Ordinary account (for daily transactions, loans, call deposit and etc.)

Temporary account (handling of temporary operations)

Special account (used for special business related to governmental projects)

Term deposit account (term deposit of minimum CNY 1m as regulated for individual account)

Accounts

Note: 1) CNAPS is a local currency settlement system in China

1 Internet banking

Global online

Communication methods– Account information (balance/transaction enquires)

– Cross-border payments

– Domestic payments

Information in real-time for Handelsbanken accounts with internet available at any place in the world

2

14Payments/cash management and financing

Foreign currency payments

Incoming payments (e-port card needed for customs clearing for trade)

Outgoing payments

Domestic payments (only when payer and payee are the same company)

Payments are subject to documentation requirements according to Chinese foreign exchange regulations

Local currency payments

Credit vouchers

Cheques

T/T through CNAPS1

Entrustment loans

Only possible between sister companies

Payments and cash management

Note: 1) CNAPS is a local currency settlement system in China

3 Financing

Working capital loans

Short-term loans– Foreign and local currency

Long-term loans– Foreign currency

Fixed-asset loans

Short-term loans– Foreign and local currency

Long-term loans– Foreign currency

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Treasury

Trade finance and treasury

FX Spot

Local currency vs. foreign currencies (i.e. SEK, EUR, USD, etc.)

Foreign currencies vs. foreign currencies

FX Forwards

Always local currency vs. foreign currencies (i.e. SEK, EUR, USD, etc.)

Deposits

Deposit rates fixed by Peoples Bank of China

Trade finance

Letter of Credit (“L/C”)

Export business– L/C advising, L/C confirmation, L/C discounting

– Bill discount (Bill includes shipping documents, packing list and etc.)

Import business– L/C issuing

– Bill discount

Documentary collection

Guarantee issuance (foreign and local currency) Bid bond guarantee

Advanced guarantee

Payment guarantee

Performance guarantee

Warranty/court/customs guarantee

Advanced payment guarantee

Rental guarantee

Shipping guarantee

Discounting of Banker Acceptance Draft “BAD”

Discounting of Receivables

5 6

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Leasing

Leasing

Finance lease and operating lease

For new fixed assets investment – Cars, production equipment and machine etc.

For acquiring working capital based on the assets on your book through Sale & Lease Back structure

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Process overview Comments

Entrustment loans

In China corporations can distribute and transfer funds within the group by means of entrustment loans

For RMB transfers there is no need to have locally incorporated holding companies

The transaction is based on a three-party lending agreement between the two sister companies and the Agent Bank

How it works

Cash rich Company A provide funds of RMB 5m to sister Company B through the Agent Bank

The Agent Bank collects interest of [x]% p.a. from sister Company B and transfer it back to Company A

– The interest rate should be based on the arm’s length principle

If the loan is still needed at the time of repayment a new agreement will be established between the two parties

Company A pays a commission fee to the Agent bank

Agent Bank

Company BCompany A

Loan agreement: RMB 5mTenor: 6 months

Fixed interest rate: [x]% p.a.

RM

B 5

m RM

B 5m

Ret

urn

Inte

rest

Collects Interest

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Process flow overview

Discounting of receivables without recourse

A three party Frame Agreement is established between the Seller, Buyer and Handelsbanken

Buyer receive invoice or commercial draft from Seller

Delivery of goods takes place

Buyer sends an approved invoice or commercial draft, delivery confirmation letter and invoice confirmation letter to Handelsbanken Shanghai

Seller transfers the right of collection of the invoice or commercial draft to Handelsbanken Shanghai

Handelsbanken Shanghai pays seller the discounted purchase price for all approved invoices or commercial drafts

Buyer pays invoice to Handelsbanken Shanghai on the maturity date of the invoice or commercial draft

Buyer Seller

Handelsbanken Shanghai

1

3

2

4

5

6

3 6

4

5

2

1

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Discounting of Banker Acceptance Draft

Buyer and Seller establish a bilateral agreement (stipulating invoice tenor, price etc.)

Buyer uses its local bank to issue a Bankers Acceptance Draft “BAD” based on the two parties bilateral agreement. The BAD tenor cannot exceed 6 months according to PBOC regulation

The Buyer forwards the BAD to the Seller

Delivery of goods takes place

Seller transfer the BAD to Handelsbanken Shanghai

Handelsbanken Shanghai pays Seller discounted purchase price of the BAD

The Local Bank pays invoice to Handelsbanken Shanghai on the maturity date of the BAD

Buyer Seller

Local Bank

1

4

2

5

6

7

2

1

Handelsbanken Shanghai

5 6

7

3

4

3

20Forward exchange contract

A forward exchange contract or a “FX forward” is a binding contract to buy or sell a certain amount of foreign currency at a pre-agreed rate and on a certain future date

A forward contract is the easiest way of covering exchange risk because it locks in the exchange rate. This strategy mitigates one of the problems that customer experience when importing or exporting in foreign currency

In order to carry out a FX forward the customer need to advise the agent bank the amount, the currencies, the expiry date and whether customer would like to buy or sell the currency

Our minimum transaction amount is USD 10,000


01Jan

Fixing price for buying USD and selling local currency

FX forward01 Apr

Buying USD

A company know that they will pay-out a dividend to its parent company in USD three months from now

By using a forward contract the company can lock in the CNY/USD exchange rate today

3 months

21Global On-line – the link to your international banking transactions

Direct online access to summarized account information for international accounts, both with Handelsbanken and with other banks

Intra-group transfers Make transfers between Handelsbanken

accounts and accounts with other banks

Make same-day transfers between Handelsbanken accounts in different countries with no loss of interest days

Payment orders in other countries Execute local payments and cross-border

payments from accounts in other countries

Payments can be made both from a local account with Handelsbanken or from an account with another bank in the country where you wish to execute the payment

Collaboration with international banks One point of contact for all your international

bank transactions

Graphic overview

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Language

Contact details

Team member

Catherine GaoDeputy Branch

Manager

SpeaksMandarinEnglish

Contact details

Telephone:+86 21 6329 8877

e-mail: [email protected]

Johan AndrénGeneral Manager

SpeaksSwedishEnglishMandarin

Contact details

Telephone:+86 21 6329 8877


Contact us – Handelsbanken Shanghai branchIrene Wu

Head of Financial Institutions


Contact details

Telephone:+86 21 6329 8877


Liisa VeijalainenSenior Account

Manager

SpeaksFinnishSwedishEnglish Mandarin

Contact details

Telephone:+86 21 6329 8877


Camilla SjöbergAccount Manager

SpeaksSwedishEnglish

Contact details

Telephone:+86 21 6329 8877


Joakim HedhillAccount Manager

SpeaksSwedishEnglishMandarin

Contact details

Telephone:+86 21 6329 8877


Jessica LiaoAssistant


Contact details

Telephone:+86 21 6329 8877


Tina JinAssistant


Contact details

Telephone:+86 21 6329 8877


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Total investment and shareholder equity for WOFE in China

24Total investment and shareholder capital

Registered capitalOff-shore

debt

The registered capital is a function of the WOFE’s total investment size (see table above)

The remainder between the total investment and the shareholder capital is the company’s Foreign Debt Quota “FDQ”. This quota defines the maximum amount of off-shore debt a company can borrow

A company’s FDQ can be used for short-term and long-term loans

Note that usage of long-term loans will “eat up” the FDQ for good

On-shore debt

Graphic overview

Total investment

Registered capital, %

Minimum RegisteredCapital

USD 3mor less

70% N.A.

USD 3–10m 50% USD 2.1m

USD 10–30m 40% USD 5m

USD 30mor more

30% USD 12mShareholder’s equity at inception

Company Foreign Debt Quota

Additional on-shore external financing from banks in China

Total investment

On-shore debt unlimited

Documents

Handelsbanken Shanghai