The largest city firm in Henan province. Central Plains Bank, founded on December 23, 2014, is the only provincial city firm in Henan Province, which is formed by the integration of 13 inner city firms in Henan Province. Thanks to a number of national economic policies and the support of the local government, the Central Plains Bank has maintained a momentum of rapid development since its inception. In 2016, the bank's total assets, total deposits, total loans and operating income ranked first in the province.
The establishment of science and technology. The Central Plains Bank has established the development strategy of "Science and Technology Bank" since its inception. In order to better meet the needs of retail customers and give full play to the bank's advantages in the application of advanced financial technology, Central Plains Bank has launched a series of retail loan products, including "second loan" and "perpetual loan". The whole process of "second loan" can be realized online, while "perpetual loan" allows customers to complete the relevant steps of loan application online and withdraw the loan by installments at any time after approval. As a result, "everlasting loan" won the "2016 Outstanding contribution Award for Product Innovation in the Financial Industry" issued by Financial Electronic. We believe that the launch and continuous optimization of financial technology products will help to promote the growth of the bank's personal loans and at the same time improve its operational efficiency.
County financial business has high growth potential. The huge population of Henan Province provides great potential for the development of its financial industry. In order to better reach the counties and reduce related expenses, by the end of 2016, the Central Plains Bank had set up 806 agricultural service points in relevant counties and cities. We believe that due to the high savings rate in the county area, the development of county financial business will provide a broader source of capital for the Central Plains Bank, at the same time, in the case of tight market liquidity, the broad source of capital will help to reduce its capital cost.
The non-performing loan ratio has improved. By the end of 2014 to the end of 2016, the non-performing loan ratio of Central Plains Bank was 1.92%, 1.95% and 1.86%, respectively. The improvement in the non-performing loan ratio is mainly due to the decline in the bad rate of corporate loans from 2.63% in 2014 to 1.78% in 2016, which is also the result of comprehensive control by the bank. We expect that from 2017 to 2019, the non-performing loan ratio of Central Plains Bank will be 1.81%, 1.81% and 1.78% respectively, mainly due to the bank's vigorous disposal of non-performing assets and the gradual stabilization of the overall asset quality.
Maintain a high dividend payout ratio in the next three years. We forecast that the bank's net profit from 2017 to 2019 will reach 3.76 billion yuan, 4.37 billion yuan and 5 billion yuan respectively. The bank's board of directors recommended that the dividend ratio for these three years be set at no less than 65%. In 2016, the average dividend payout ratio of Hong Kong-listed Bajiacheng firms was only 20.6%. We believe that a stable dividend payout ratio and continued growth in net profit will provide good support for investors' potential returns.
For the first time, the coverage gives the holding rating. Based on our forecast that Zhongyuan Bank will maintain a dividend ratio of 65% from 2017 to 2019, we believe that DDM is the most appropriate valuation method. According to our forecast of distributable profits of RMB 4.37 billion in 2018 and a dividend ratio of 65 per cent, the bank's fair value is Rmb2.19 per share. At an exchange rate of HK $1 = RMB0.85, we give the Central Plains Bank a target price of HK $2.58, equivalent to 0.91 times the forecast price-to-book ratio for 2018. For the first time, the coverage gives the holding rating.