[R]12:00PM New York-The fourth largest listed bank in the world Bank of China reported net interest income in the year ended December 31 increased 25.8% to Rmb152.7 billion in 2007 from Rmb121.3 billion a year ago[/R]

Annual Earnings Review

Bank of China reported that annual net interest income in the year ended December 31st rose 25.8% from Rmb121.3 billion a year ago to Rmb152.7 billion as net fee and commission income advanced 91.9% on the year to Rmb 27.4 billion.

For the year, net profit attributable to shareholders also increased 31.3% to Rmb56.2 billion from Rmb42.8 billion a year ago. Earnings per share advanced 22.2% to Rmb0.22 per share from 0.18 per share a year earlier.

BOC also proposed the payment of a dividend of Rmb0.10 per share for the year, 25% increase from a year ago. Return on equity in 2007 was 17.4% and return on assets in the year 1.53%. Dividend payout ratio was 62.6% after the bank increased the dividend by 7.9%.

Total asset at the bank increased 14.9% to HK$1.07 trillion and total deposits from customers increased 14.2% to HK$793 billion. The bank reported capital adequacy ratio of 13.08% and liquidity ratio of 50.9%.

Business Review

During 2007, the Bank focused on the development of quality credit business and at the end of 2007 total customer loans grew by 17.2% to Rmb 2,850.561 billion, while and corporate and personal lending grew by 14.53% and 25.71% correspondingly.

Also, the average yield of customer loans grew year-on-year by 46 basis points to 5.94% and the average yield of domestic Rmb loans also advanced by 63 basis points to 6.06%.

Customer deposits saw annual growth of 7.55% and Rmb deposits of financial institutions increased by 88.23%, increasing market share by 2.66%.

As the People’s Bank of China raised the benchmark rates of Rmb-denominated loans and deposits six times, BOC achieved a net interest income increase of 25.85% year-on-year of Rmb 152.745 billion.

In 2007, the Bank operated a total of 366 standardized wealth management centres and more than 1,000 wealth management outlets. Also the number of wealth management customers rose by 18.12%.

The agency business also posted significant gains as the number of funds distributed and total sales volume rose 130% and 322% respectively year-on-year. The net value of assets under custody also advanced by 150% compared to 2006.

During the year, BOC issued 2.34 million new credit cards which brought the total number of credit cards and quasi-credit cards to over 11 million. In addition, the international settlement volume exceeded US$1 trillion for the first time.

IPO financing business rose 162% to HK$528 billion to help 48 newly listed companies.

Total advances to customers at mainland 15 branches increased 60% to HK$30 billion and operating profit before impairment allowances increased 53% or HK$200 million. Customers deposits increased 48.4% to HK$5.8 billion.

Foreign exchange business

Strong growth in foreign exchange trading business generated spread income of Rmb7.647 billion for domestic operation of the Bank in 2007, a rise of 28.78% from a year ago.

However net foreign exchange position declined to US$4.1 billion at the end of the year. Investors have been concerned with the bank’s exposure to foreign loans and worried that losses may be higher than predicted.

BOC’s profit from life insurance business in Hong Kong reached a new record while domestic general insurance income increased by 313%. BOC Aviation reported a year-on-year growth of 67% in profit after tax.