On November 16, 2007, 2007 (The First) Financial Innovation Product Forum of China Everbright Bank (“the Bank” or “CEB”) was solemnly held in Beijing. Mr. Li Fu’an, Director of Department of Supervisory Cooperation for Business Innovation under the China Banking Regulatory Commission (“CBRC”), and Mr. Shi Wenchao, Secretary-General of the National Association of Financial Market Institutional Investors, attended and delivered speeches at the forum, and Mr. Guo You, President of CEB, made a keynote speech. Also present at the forum included the core team of business innovation of CEB and more than 230 financial managers and treasury transaction managers of city commercial banks and rural credit cooperatives, who shared the Bank’s innovation experience in terms of wealth management, maintenance of value of corporate bonds, RMB interest derivative products, short-term corporate financing notes, and supply chain financing. The Bank also invited China Everbright Securities and Credit Suisse (Hong Kong) to attend the forum to share their experience in strategic investment and corporate debt risk management.

　　China’s financial industry is in an important period of transition and development. The reform of financial system has gradually shifted from promotion of market infrastructure construction and improvement of governance structure of financial institutions to the full construction of sub-markets and social financing. Chinese banks should break through in their transition, dynamically cultivate their innovative capability, and balance the relation between innovation and development. The Guideline for Financial Innovation of Commercial Banks promulgated by CBRC in December 2006 represents the concern and guidance of regulatory authority regarding financial innovation. The establishment of the National Association of Financial Market Institutional Investors on September 3, 2007 also indicates that China’s innovative bodies have been further market-oriented and self-disciplined. The country’s financial industry has run onto the fast lane of innovation.

　　Under the new financial environment, CEB seized the opportunity to promote business innovation by product innovation, promote environmental development by mechanism innovation and promote brand building by mode innovation. It has initially achieved function-based services, product-based functions, mode-based products and brand-based modes, and often takes the preemptive opportunity in the field of innovative business. Following the “Sunshine Wealth Management” product launched in 2004, the Bank has successively developed sunshine wealth management series programs, taken the lead in innovation of many products, and won the awards “Most Popular Wealth Management Product” and “Wealth Management Brand Most Recognized by the Public” from related media for several consecutive years. As for the innovation of corporate banking, CEB held the lead in the fast-developing emerging services, such as short-term financing note, domestic factoring and enterprise annuity. CEB introduced foreign experts of financial derivatives, and took the lead in launching the RMB interest swap and fixed-rate housing loan business in China. Its ability in setting and negotiating prices for domestic and foreign-currency derivative products kept ahead in domestic financial industry. The Bank also took the lead in achieving the intensive operation and management of settlement business (including letter of credit, letter of guarantee and remittance) and financing business (including collection and presentation of documents, packing loan, forfeiting, and pledge of commodity ownership). The omni-directional innovative development has pushed CEB to continuously shift from a single credit product to the financing product mix and integrated services. Now the Bank has initially shaped a strategic development pattern that aims to focus on wealth management business and build up brand, switch from a single product innovation to continuous innovation of series products, actively penetrate into direct financing market, and upgrade its business to overall asset management business.

　　In 2006, CEB won two awards from SINA Internet Grand Ceremony and SOHU respectively, i.e. “Annual Most Innovative Bank” and “Most Innovative Bank”, suggesting that the Bank’s business innovation has been fully recognized by the general public. In the “2007 Value Rating of Financial Brands” selected among China’s financial industry on November 2, 2007, CEB became one of the “10 Best Chinese Banks”. In the future, CEB will continue to consolidate its leading position in the market, boost technical reform, and pay regard to talent introduction. It will strengthen risk management and brand contribution, build up an outstanding financial team, achieve all-around innovation in product, service, management, technology, organization, system, concept and culture, and develop CEB from a medium-size commercial bank into a new-type bank with certain features.