§        Operating income rose 12.9% to RMB128,714 million

（2004: RMB113,976 million） 

§        Profit before tax rose 8.1% to RMB55,364 million

     （2004: RMB51,199 million）

§        Net profit attributable to shareholders decreased 4% to RMB47,103 million

     （2004: RMB49,042 million）

§        Return on average assets of 1.11% (1)

     （2004: 1.31%） 

§        Return on average equity of 21.59% (2)

     （2004: 25.86%） 

§        Total assets increased by 17.3% to RMB4,585,742 million

     （RMB3,909,920 million as at 31 December 2004）

§        Basic and diluted earnings per share dropped by 7.7% to RMB0.24

     （2004: RMB0.26）

§        Proposed final dividend per share in 2005 is RMB0.015

§        Capital adequacy ratio of 13.57%  

     （11.29% as at 31 December 2004）

§        Core capital adequacy ratio of 11.08%

     （2004: 8.57%）

§        Cost-to-income ratio of 45.13%

     （2004: 46.87%）

§        Non-performing loan ratio of 3.84% (3)

(2004: 3.92%)

Note:  (1) Return on average assets is calculated by dividing net profit by the average of total assets as of the beginning and end of the year. (2) Return on average equity is calculated by dividing net profit attributable to shareholders by the weighted average of shareholder’s equity of the year. (3) Non-performing loan ratio is calculated by dividing non-performing loans and advances to customers by total loans and advances to customers.

Hong Kong, 6 April 2006 –China Construction Bank Corporation (“CCB” or the “Bank”) (Stock Code: 0939) today announced its first annual results report after its listing in Hong Kong.

In 2005, CCB reported operating income of RMB128,714 million, representing a 12.9% increase compared to RMB113,976 million in 2004. Profit before tax surged by 8.1% from RMB51,199 million in 2004 to RMB55,364 million in 2005. Net profit decreased by 4.0% to RMB47,096 million (2004: RMB49,040 million), which resulted from an increase in the income tax following the expiry on 30 June 2005 of the Bank’s tax exempt status granted as part of its restructuring. Excluding the tax effect, net profit for 2005 actually increased by RMB5,681 million, or 16.9% compared to that of 2004 on the same basis. Earnings per share were RMB0.24 (2004: RMB0.26). The Board of Directors recommends the payment of a final dividend of RMB0.015 per share.

“2005 was a significant year for the Bank. Our successful listing on the Stock Exchange of Hong Kong on 27 October 2005 marked another milestone in our transformation into a world-class commercial bank, following our restructuring in 2003, the establishment of the joint-stock bank in 2004 and the introduction of international strategic investors in 2005,” said Mr. Guo Shuqing, Chairman of China Construction Bank Corporation. CCB is the first among the big four state-owned commercial banks of China that has completed a public listing. The listing of CCB is the largest IPO ever for a bank, and the largest IPO worldwide in the past five years.

In 2005, CCB not only successfully introduced strategic investors and got listed in Hong Kong, but also made great progress in optimising its corporate governance structure, enhancing its risk management, internal control and management systems, improving service quality and exploiting new markets.

The business segment of loans and advances of CCB recorded solid growth in 2005, with the loans balance increasing by 10.4% to RMB2,458,400million, of which the residential mortgage loans balance increased by 12.5%, resulting in a 14.8% increase in net interest income to RMB116,551 million. CCB is also committed to diversifying its fee and commission based services and has expanded the range of services over the past year. Thus, the net fee and commission income increased by 30.7% to RMB8,455 million and now accounts for 6.6% of the total operating income, as compared to 5.7% in 2004. In addition, CCB strengthened company-wide cost controls and the cost-to-income ratio was driven down further from 46.87% in 2004 to 45.13%. In 2005, the return on average assets and return on average equity of CCB reached 1.11% and 21.59% respectively.

As at 31 December 2005, the Bank’s total assets amounted to RMB4,585,742 million, an increase of 17.3% compared with 2004. The surge was mainly attributable to the growth of loans and advances, as well as investments, the two largest classes of assets in the Bank’s portfolio. In addition, CCB further enhanced its asset quality and improved the capital adequacy ratio in 2005. As the Bank further strengthened its credit risk management function and loan business practices, the overall loan quality was improved, reflecting in the decrease of both the non-performing loan ratio from 3.92% at the end of 2004 to 3.84% at the end of 2005, and the ratio of special mention loans to total loans from 16.7% in 2004 to 11.8% in 2005. The Bank’s capital adequacy ratio as at 31 December 2005 was 13.57%, an increase of 2.28 percentage points compared with 11.29% a year earlier, largely due to net proceeds of RMB72.6 billion from the IPO and the enhanced profitability and ability of asset management. The core capital adequacy ratio was 11.08% (2004: 8.57%).

“Committed to the customer-centric philosophy, we optimized our operating processes, enhanced our service quality and increased our investment in technology development in 2005,” continued Mr. Guo. “While maintaining advantages in our traditional business, we actively expanded our personal financial services, small-and-medium-sized enterprises financial services and fee and commission based services, and we would continue to innovate our financial products and services.” 

In 2005, CCB further optimized its loan portfolio. As of 31 December 2005, the Bank’s balances of corporate loans amounted to RMB1,775,791 million, representing 72.2% of the total loan portfolio. While maintaining its advantages in the traditional arenas of medium- to long-term loans, CCB also recorded rapid growth in fixed asset loans, which amounted to RMB842,415 million, representing 47.4% of the total corporate loan portfolio. The growth of infrastructure and real estate development loans was particularly remarkable. As of the end of 2005, the infrastructure loans of CCB reached a 28.1% market share in China. Furthermore, the total amount of personal loans reached RMB453,889 million, or 18.5% of the total loan portfolio, of which 76.7% were contributed by home mortgage loans, making it the largest personal credit product of CCB. Targeting the small and medium-sized enterprises, CCB also introduced a series of new credit products in 2005.

During the year, CCB became the second largest bank card issuer with a market share of 18.1%. As of 31 December 2005, the bank issued 3.12 million credit cards, representing an increase of 1.47 million over the previous year. Consumption transaction volume through the credit cards in 2005 reached RMB18,754 million, an increase of 184% over 2004.

The debit card business also experienced rapid growth, with the number of cards in circulation increasing by 11% to 166 million. Both the spending amounts and fee and commission income from debit cards reached a record high in 2005. The total spending reached RMB125,563 million, an increase of 58.5% compared to 2004, and the fee and commission income was RMB2,450 million, an increase of 27.7% compared to 2004.

On the expansion of fee and commission based services, the Bank established the CCB Principal Asset Management Co., Ltd. with joint venture partners including Principal Financial Group Inc of the United States, to provide fund management services to investors, and obtained regulatory approval to extend its custodian services to corporate pension funds and insurance companies’ shares. Three new QFII clients have chosen the Bank to act as their custodian. CCB was also the first among the commercial banks in China that issued residential mortgage-backed securities.

In 2005, CCB successfully introduced Bank of America Corporation (BOA) and Asia Financial Holdings (Pte) Ltd as strategic investors and developed partnership in various core areas.  Recently, CCB and BOA has jointly launched ATM cash withdrawal services for their high net worth customers since April 1st, 2006. Cardholders of CCB’s “Happy Investor” Card can withdraw cash form BOA ATMS free-of-charge.

Looking forward, CCB will remain committed to enhancing product quality and making product innovation in 2006, with an aim to increase brand awareness and market share by providing better service and tailor-made products. The Bank will also focus its marketing efforts on targeting quality customers and developing businesses in more developed regions and key industries, so as to develop its core lending business. In addition, lending to infrastructure projects and small to medium-sized enterprises remain key growth areas, and the Bank will continue to build on the progress it has made in growing its personal lending business and fee and commission based services. CCB will strengthen its asset and liability management and treasury operations. The Bank also has plans to reform its human resources, performance and remuneration policies by improving resource allocation and actively exploring ways to increase incentives for staff.

“Continuing economic development of China in the coming year will create potential and opportunity for further growth in the banking industry. Being a public corporation with worldwide investors, we will take on more mission and responsibility and push forward our various tasks by sticking to higher standards. We believe, with our solid business strategies, strong asset quality, broad customer base, improving management capabilities and close partnership with strategic investors, the Bank is well placed to take advantages of the opportunities ahead to provide the highest quality services for our customers, maximize values for our shareholders and provide the best career development opportunities for our employees,” concluded Mr. Guo.