On June 13, 2006, The Banker released the list of Top 100 Chinese Banks in Beijing and CCB topped the list.

As a financial magazine with global influence and affiliated to the British Financial Times Group, The Banker has long been independently assessing and analyzing the competitiveness of global banks. Its list of Top 1000 World Banks is seen as the measurement of the strength of world banks and mirrors the power of 1000 global banks. Different from the Top 1000 World Banks list, Top 100 Chinese Banks is a list especially for the Chinese financial industry.

The list is made according to the tier 1 capital of 100 Chinese banks at the end of 2005 and the top 4 banks on the list are China Construction Bank, Bank of China, the Industrial and Commercial Bank of China and the Agricultural Bank of China. The total tier 1 capital of the 4 banks made up 73.2% of the total tier 1 capital of the 100 banks.

The fact that CCB ranks No.1 in the list shows the big increase of its capital strength since IPO and its leadership among Chinese banks. According to the 2005 business performance statistics released by CCB, by the end of 2005 its tire 1 capital has reached RMB287.677 billion, up 47.1% over 2004 and capital adequacy ratio 13.57%, up 2.28 percentage points over 2004. Such numbers are among the highest even in the global emerging markets, which is attributed to the RMB72.6 billion raised after IPO and the improvement of the bank’s profitability and risk asset control capacity.

The latest list also includes such indexes of the 100 Chinese banks as assets, pre-tax profit, average capital profit ratio, return on assets, cost/income ratio, capital adequacy ratio and NPL ratio. In addition to tier 1 capital, the pre-tax profit, average capital profit ratio, return on assets, capital adequacy ratio and assets quality index (lowest NPL ratio) of CCB all rank No.1 among the four major state-owned commercial banks. CCB’s pre-tax profit reached RMB55.364 billion and tops the list. The indexes show that among Chinese banks CCB has the strongest competitiveness, marketing and risk control capacity and profitability.

Since implementing the shareholding reform and launching IPO, CCB’s governance structure has been improved, the rights and responsibilities of its shareholders’ meeting, Board of Directors, Board of Supervisors and senior management clearly defined and the sophisticated decision-making, execution and supervision mechanism established. Check of balance is well realized within the bank.

The establishment and improvement of corporate governance structure ensure the stable implementation of CCB’s business strategies. Following the “customer-centric and market-oriented “philosophy CCB has been improving its products, business process and management system and raising services. It has become one of the Chinese commercial banks with the best service capacity. In 2005, the services of CCB Shanghai, Shandong, Qingdao, Hunan, Xiamen and Xinjiang branches were well recognized by customers and local peers. Its Dalian branch received the Award of the Most Efficient and Reliable Wealth Management Institution with the Strongest Sense of Service in the selection of The Best Wealth Management Institutions for Dalian Citizens; Guangdong Zhaoqing branch received the No Error Award for two consecutive years from the Gangzhou Bank Electronic Settlement Center. CCB also steps up business restructuring and develops the financial products and services especially for small and medium-sized enterprises such as the “Growth Road” and “Swift Loan”.

The rise of service capacity makes CCB the Chinese commercial bank with the strongest market competitiveness. At the end of 2005, the credit balance of CCB ranked the first among the four major state-owned commercial banks and reached RMB2458.398 billion, rising by 10.4% over 2004 and holding a market share of 11.9%. While maintaining its traditional business advantage, CCB develops the new growth point of personal business. By the end of 2005, CCB has issued 3.12 million pieces of credit card, up 89.1% and issued the second largest number of bank cards in China with a market share of 18.1%. In the environment of national macro control, its individual credit still enjoys a sound growth momentum. By the end of 2005, its individual loan balance has increased by 12.5% to 348.219 billion, which is among the best among Chinese banks.

After the IPO, CCB’s profitability has been rising steadily. According to the business performance statistics released by CCB, by the end of 2005 its sales revenue has reached RMB128.714 billion, up 12.9%; pre-tax profit increased by 8.1% to RMB55.364 billion; net commission income rose by 30.7% to RMB8.455 billion. Its operational indexes continue to be improved, with the average return on assets numbering 1.11%, average return on owner’s equity 21.59% and cost/income ratio 45.13%, which is fully recognized by international investors.

CCB’s risk management capacity also grows stably and ranks the best among Chinese banks. It restrains capital expansion through economic capital budget and economic added value evaluation mechanism, strengthens risk management and internal control and coordinates risks and profit. By the end of 2005, the overall asset quality of CCB has continued rising and NPL ratio dropped to 3.84% which is the lowest among the four major state-owned commercial banks.

CCB also explores the reform of risk management system aggressively. In 2005, CCB adopted the vertical management in its internal audit department and the chief auditor reports directly to the Board of Directors, president and Board of Supervisors. It also launched the pilot project of vertical risk management system reform in four branches, under which the risk managers and customer managers manage risks in parallel and the risk directors directly report to the headquarters. This year the reform has been implemented throughout the bank. Recently CCB appointed the first Chief Risk Officer (CRO) in its history. Currently the bank is consolidating resources to build the centralized and vertical risk management system covering all the risks so as to ensure the effective operation of its modern corporate governance structure and improvement of core competitiveness.

CCB has received full support from the capital market after its IPO and enjoys a stable share price. According to Hong Kong Exchanges and Clearing Limited (HKEx), CCB’s market value reaches HK$752.7 billion calculated at the closing price on June 1, 2006, ranking the third among the listed companies of HKEx. The market support indicates that investors are confident of the future development and profitability of CCB.

The sound performance of CCB after its IPO is also recognized by investors and the public. In 2005, CCB was credited as the Best Chinese Bank of the Year by The Banker, the Best Chinese Bank by The Asset and the Best Financial Risk Management Award in China by The Asia Risk.

During the Technology Awards 2006 contest held by The Banker, CCB won the Retail Banking Payment Innovation Award and the Retail Banking Cross-channel Experience and Product Award, showing that its innovative financial products and services in major business areas are well accepted by the customers as well as experts.