Rating Remark Trend Remark Continued watch for macro and impact to portfolio. Currently, no noticeable issues. Portfolio remains in satisfactory Portfolio risk is condition. Some longer cycles of satisfactory. Only Company fundraising as one loan entrepreneurs and investors adjust substantially at risk Credit Risk Medium Stable to slowing or reduced valuation for loss growth. Fundraising environment approximating RMB is still satisfactory and 1.1MM. Portfolio is opportunities are plentiful, but concentrated in investors are still selective. software, which includes digital content, and advertising. Loan growth and deposit campaign Remains within the tolerance lower the net Market aligned with our business strategy. Medium interest income Stable Risk However, more volatility in the sensitivity. market is expected in the future. Continued RMB depreciation. Liquidity overall is good due to capital base, however RMB Loan to Deposit Expect continued pressure on ratio continues to RMB Loan to Deposit have volatility due Healthy pipeline of loan to competitive opportunities will necessitate nature for deposits. continued deposit focus. Other Liquidity The deposit Medium Increasing opportunities to seek deposits are Risk campaign has being explored, but will require helped to lower the some infrastructure development. concentration in the Plan to convert portion of USD deposit base to the capital to RMB to provide historically lowest cushion. level. The growth in loans has kept pressure on the liquidity. Operational was Constant evaluation of systems Operational Medium stable during the Increasing and operational processes will be Risk year with no focused for future business
Rating Remark Trend Remark Credit Risk Medium Continued watch for macro and impact to portfolio. Currently, no noticeable issues. Portfolio risk is satisfactory. Only one loan substantially at risk for loss approximating RMB 1.1MM. Portfolio is concentrated in software, which includes digital content, and advertising. Stable Portfolio remains in satisfactory condition. Some longer cycles of Company fundraising as entrepreneurs and investors adjust to slowing or reduced valuation growth. Fundraising environment is still satisfactory and opportunities are plentiful, but investors are still selective. Market Risk Medium Loan growth and deposit campaign lower the net interest income sensitivity. Continued RMB depreciation. Stable Remains within the tolerance aligned with our business strategy. However, more volatility in the market is expected in the future. Liquidity Risk Medium Liquidity overall is good due to capital base, however RMB Loan to Deposit ratio continues to have volatility due to competitive nature for deposits. The deposit campaign has helped to lower the concentration in the deposit base to the historically lowest level. The growth in loans has kept pressure on the liquidity. Increasing Expect continued pressure on RMB Loan to Deposit Healthy pipeline of loan opportunities will necessitate continued deposit focus. Other opportunities to seek deposits are being explored, but will require some infrastructure development. Plan to convert portion of USD capital to RMB to provide cushion. Operational Risk Medium Operational was stable during the year with no Increasing Constant evaluation of systems and operational processes will be focused for future business
SPD%20SVBank%202016%20Annual%20Report.docx