——Fruitful Structural Adjustment, Remarkable Business Innovation

    On February 9, 2007, China Everbright Bank announced at the 2007 Work Meeting held in Shanghai that, it has realized steady development of business and successfully completed the operating targets of 2006 by faithfully implementing the strategic plan according to the scientific approach to development and earnestly promoting reform, innovation, organizational restructuring, risk management, profitability enhancement, corporate culture construction and brand building under the precondition of capital restriction.

    As of the end of 2006, China Everbirght Bank posted total assets of RMB595.1 billion, an increase of 16.4% from last year. The outstanding loans and deposits were RMB352.4 billion and RMB519.8 billion, an increase of 16.0% and 14.7% from last year respectively. The deposits from personal customers were RMB101.9 billion, an increase of 26.9% and accounting for 19.6% of the general deposits. The net profits increased by 21.6% from last year.

    Business innovation is a most eye-catching highlight during the operation of China Everbright Bank in 2006. The corporate business line launched a series of new products including Bank-Customs Express, Bank-Tax Express, Bank-Finance Express, cash management, bills and asset management; and initiated chained financing service such as “Whole-Process Express”, “Golden Chain”, “Bill Package” and “Warehouse Receipt Pledge”, accordingly the financing balance surpassed RMB13 billion at the end of the year. Online banking business saw rapid development: the amount settled via corporate online banking system amounted to RMB1.51 trillion, an increase of 382% from the corresponding period last year, and a lot of deposits were generated from settlement. Financial agency business demonstrates a remarkable edge: the Bank collected RMB15,318 million of non-tax financial income on behalf of the central government and disbursed direct payment of RMB94.6 billion, both ranking the top among other banks.

    The innovation and development of personal banking business were also fruitful. The Bank reported continual fast development in the Sunshine Wealth Management and launched a series of new products to meet the market’s demand, including Sunshine Wealth Management Plan T, Package Plan, Win-Win Plan, Co-Rise Plan and etc.; the accumulated sales volume of wealth management products was RMB54.9 billion in the year, an increase of 112% from last year. From the introduction of Plan A in 2004 till now, the Sunshine Wealth Management products led the market with a sales volume of more than RMB100 billion. “Sunshine Wealth Management” was elected the “Most Recognized Wealth Management Brand” by sina.com and sohu.com; its RMB and foreign currency wealth management products were placed the top on the list of “Most Favored RMB Wealth Management Product” and “Most Favored Foreign Currency Wealth Management Product” respectively. China Everbright Bank also took the initiative in launching fixed interest rate housing loans and was the first bank realizing the transition between fixed and floating interest rate; the balance of fixed interest rate housing loans topped RMB1 billion at the year end, indicating a remarkable business advantage. The Bank achieved remarkable accomplishments in the area of credit card in 2006, and with a scale of more than 757,400 newly-issued credit cards, the Bank was awarded “Best Customer Experience”, “Most Customized Credit Card” and “Top 10 Credit Card Brand of Customer Satisfaction”.

    Besides, China Everbright Bank maintained a leading advantage in emerging business such as investment banking, enterprise annuities and etc. The Bank underwrote 43 issues of short-term financing bonds for 31 companies in the year, and occupied the largest number of customers; the number of enterprise annuity customers exceeded 120 at the end of the year, the assets under custody exceeded RMB2 billion with more than 200,000 personal accounts, representing a leading position on the market.

    The business innovations and remarkable data not only contributed to the growth of China Everbright Bank but also earned high affirmation from the society and customers. The Bank was awarded the prize of “Best Innovative Bank” in the 2006 Bank Campaign organized by sina.com and sohu.com.

    While promoting business innovation, China Everbright Bank made active efforts to adjust and optimize the business structure, and achieved remarkable results. First, the proportion of low-cost personal deposits increased and the liability structure was improved. The outstanding personal deposits of the Bank stood at RMB101.9 billion, an increase of 26.9% from last year and 19.6% of the total deposits. Second, it redoubled the efforts of credit restructuring, exited 651 high-risk and low-return corporate customers, and reduced the exposure of risk credit by nearly RMB20 billion. Third, it focused on the low-asset-occupation and high-return trade finance business, and handled trade finance of more than RMB37.3 billion accumulatively, an increase of 41% from last year. Fourth, it enhanced the cooperation with China Development Bank, and granted RMB51.6 billion loans under the framework of cooperation, becoming the largest commercial bank partner of China Development Bank in term of cooperative credit business. Fifth, the product and customer structure and the risk distribution of credit business was improved: the quality credits to AAA customers increased by 10% from the year beginning and the outstanding personal loans stood at RMB45.3 billion, an increase of 37.2%.

    In 2006, China Everbright Bank launched a series of reform measures in the aspect of risk management: Chief Risk Officer was appointed in branches; Corporate Banking Risk Manager was engaged to conduct loan examination beforehand and management afterwards; retail credit management centers was set up to conduct loan examination beforehand and management afterwards; it reinforced the inspection and monitoring of key areas, industries, products and businesses, divided the risk category from 5 levels to 12 levels and practiced provision budget management and provision assessment; it increased the vertical management over risk management departments of branches and improved the Bank’s overall risk controllability; it promoted the application of counter manager system and effectively prevented the operational risks of counter businesses; it strengthened intensive operation and centralized management and successively carried out centralized stamp management, centralized review and disbursement of credit, centralized margin monitoring, centralized management and issuance of bank acceptance bills, centralized processing of bill discount, centralized management of corporate banking collaterals, centralized management of files, and centralized report of expenses.

    The meeting determined the major tasks of China Everbright Bank in this year: 1. to adjust the business structure and realize fast and steady development; 2. to strengthen business innovation, optimize the business procedures, improve customer service and increase operating efficiency and effects; 3. to carry out bank reforms and construct the modern commercial banking business mode; 4. to further improve comprehensive risk management and sharpen the capability of comprehensive risk prevention and management; and 5. to strengthen corporate culture nourishment and boost long-term harmonious development of the Bank.