Chairman’s Statement

    In 2007, amid the new macroeconomic control environment and the changing financial market, and based on prudent judgment of the situation, our Bank made timely adjustment of our strategies and direction, strengthened marketing efforts and innovated characteristic businesses, which enabled us to achieve sound and rapid growth of various businesses. At the same time, our profitability has gained

continuous  improvement, and our asset quality is kept at an excellent level. By the end of 2007, the customer deposit and loans outstanding grew by 27.55% and 70.07% respectively compared with the end of the previous year, the total assets rose by 39.96%, and the after-tax profit increased by 30.04% against the previous year. The after-tax ROE and ROA reached 18.58% and 1.02% respectively, while the non-performing loan ratio and non-performing asset ratio further dropped to 0.75% and 0.43% respectively.

     In the past year, our bank has propelled various key tasks and achieved favorable progress. Breakthroughs were witnessed in branch building, highlighted by the grand opening ceremony of our Beijing Branch held in the Great Hall of the People, which is a landmark in the construction of a nationwide business network. In addition, various key tasks have been put into full swing, such as information system building, joint-stock restructuring, organizational and workflow reengineering, and comprehensive risk management, etc. All these are of strategic significance to the realization of the medium and long-term development of our bank.

    The achievement of such outstanding performance owes not only to the arduous endeavors and selfless devotion by the management and the entire staff, but also to the care and support by the regulatory authorities, government bodies, our customers and the public. On behalf of the Board of Directors, I would like to take this opportunity to extend our heartfelt appreciations to them.

    In 2008, China’s economy is expected to maintain a relatively fast momentum of growth. Nevertheless, there are increasing uncertainties in the economies home and abroad. As an ancient Chinese poem goes, “gold comes from thousands of times of digging and screening, and the hard work will not be paid back until the nugget emerges”. Our bank will embrace the opportunities and challenges with full confidence, make persistent efforts to live up to the expectations of the regulatory authorities, our shareholders, the customers and the employees, and to achieve new splendors!

Chen Gui Zong

Chairman

27 March 2008